Summary Assessment and Regular Assessment under Income Tax

Summary Assessment under section 143(1)

When a return of income has been filed by the assessee under section 139(1) or in response to a notice issued under section 142(1), the return shall be processed in the following manner-

a. The total income or loss shall be computed after making the following adjustments-

• Any arithmetical error in the return filed by the assessee
• Any claim which is incorrect as apparent from the information provided in the return filed
• Disallowance of loss claimed if the return of income for which the set-off of loss is claimed was filed after the due date of filing of return under section 139(1)
• Disallowance of expenditure or increase in income indicated in the audit report but not taken into account while computing the total income in the return
• Disallowance of deductions claimed under section 10AA or under any of the provisions of Chapter VI-A which is allowable in respect of certain incomes, if the return of income is furnished after the due date of filing of return under section 139(1)
• Addition of income appearing in Form 26AS or Form 16A or in Form 16 which has not been included in the total income in the return

First Proviso to section 143(1) also states that the above adjustments will only be made after giving an intimation to the assessee about such adjustments either in writing or in electronic mode. Further, the response received from the assessee within the specified time limit of 30 days on issuing of such intimation shall also be considered before making such adjustments.

b. The tax, interest and fee, if any payable, shall be computed on the income as computed in the manner specified above.

c. The tax, interest and fee payable or the refund due, shall be determined after adjustment of TDS, TCS, advance tax paid, relief under section 89, relief allowable under section 90or 90A or 91, any rebate allowable under Part A of Chapter VIII, any self assessment tax paid or any amount paid otherwise by way of tax.

d. An intimation shall be prepared and sent to the assessee specifying the tax payable along with interest and fee or refund due to the assessee.

Second proviso to Section 143(1) states that an intimation shall also be sent to the assessee under section 143(1) even if there is no tax payable or refund is due to the assessee. Further, it also states that such intimation shall be sent within a period of one year from the end of the financial year in which the return is made.

Regular Assessment under section 143(3)

Where the assessee has filed the return of income under section 139 or in response to a notice issued under section 142(1), the assessing officer or Income Tax Authority not below the rank of income tax officer, shall issue notice under section 143(2) requiring him either-

• to attend the office of the Assessing Officer or
• to produce or cause to be produced before assessing officer any evidence supporting the return filed.

On the date specified therein.

The notice is issued for the following purpose-

• To ensure that the assessee has not understated the income or has computed excessive loss.
• To ensure that the assessee has not underpaid the tax.

Time limit for issue of notice is six months from the end of the financial year in which the return is furnished by the assessee.

As per section 143(3), on the day specified in the notice issue under section 143(2) or as soon afterwards as may be, the assessing officer, after hearing the evidence produced by the assessee and such other evidence as the assessing officer may require on the specified points and after taking into account all the relevant material gathered, shall by an order in writing, make an assessment of the total income or loss of the assessee and determine the tax payable or refund of any amount due to him on the basis of such assessment.

Further, as per section 143(4), where a regular assessment under sub-section (3) of this section or section 144 is made -

• any tax or interest paid by the assessee under section 143(1) shall be deemed to have been paid towards such regular assessment ;
• if no refund is due on regular assessment or the amount refunded under section 143(1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.