Enquiry before Assessment - Notice under section 142(1) - Income Tax - Ready Reckoner - Income Tax

Enquiry before Assessment - Notice under section 142(1) Section 142(1)(i) For the purpose of making an assessment the Assessing Officer may issue a notice requiring the person to furnish the return of income within the time specified in the notice, if the person has not filed a return of income within the time allowed u/s 139(1) or before the end of the relevant AY. Section 142(1)(ii) For the purpose of making an assessment, AO can issue notice- To produce Books of A/c s documents (Max 3 years prior to relevant PY) To furnish information including details of asset liabilities (prior approval of JC required if information demanded is related to Assets Liabilities not included in Books of A/c s) Note: (1) The Assessing Officer shall obtain the previous approval of the Joint Commissioner before requiring the assessee to furnish a statement of assets and liabilities not included in the accounts. (2) Notice under section 142(1)(ii) can be issued whether the assessee has filed return of income or not but it can be served only after the time allowed u/s 139(1) has expired. (3) If the return is not furnished by the assessee, then it is not mandatory for the AO to serve notice u/s 142((1)(i) for filing the return of income in case he wishes to make best judgement assessment u/s 144 . (4) Where the notice u/s 142(1) was served to the assessee, calling for certain information, and the AO also intimated to the assessee that his claim for residential status as not ordinarily resident was rejected and he was treated as ordinary resident, it was held that the determination of residential status after hearing the evidence was part of assessment u/s 143(3) and the could not have been determined in notice u/s 142(1) while calling the information. [ Vijay Mallya v ACIT Others 2003 (7) TMI 33 - Cal. HC ] (5) Prescribed income- tax authority under second proviso to section 142(1)(i) - The prescribed income-tax authority under second proviso to section 142(1)(i) shall be an income-tax authority not below the rank of Income-tax Officer who has been authorised by the Central Board of Direct Taxes to act as such authority for the purposes of that clause. [ Rule 12F of Income Tax Rule 1962 ] (6) Time Limit for completion of assessment notice issued u/s 142(1) - The time limit provided u/s 153(1) for completion of assessment is 21 month/ 18 month/ 9 month as the case may be, from the end of the assessment year in which the income was first assessable . therefore, since assessment has to be completed within the said period, it appears that notice u/s 142(1) should also be issued within that period. [ For more detail refer this chapter ]