Return of Income and Procedure of Assessment [Section 139 to 154]

Here’s a detailed overview of Return of Income and Procedure of Assessment (Sections 139 to 154) under the Income Tax Act, 1961:

1. Return of Income (Section 139)

Key Provisions:

• Mandatory Filing: Required for individuals, companies, firms, HUFs, etc., if income exceeds the exemption limit.
• Voluntary Returns: Even if income is below the threshold, taxpayers may file returns voluntarily.
• Subsections:
  • Section 139(3): Filing returns for losses (e.g., business/capital losses) to carry forward deductions.
  • Section 139(4): Belated returns filed after the due date (penalty of ₹5,000 applies).
  • Section 139(5): Revised returns to correct errors/omissions in original filings.
  • Section 139(9): Defective returns due to missing documents (15-day window for rectification).

Due Dates:

• July 31: For individuals/firms not requiring audit.
• September 30: For entities requiring audit.

2. Types of Assessments (Sections 140A to 153)

(A)  Summary Assessment (Section 143(1))

• Automated processing of returns by the Centralized Processing Centre (CPC).
• Adjustments for arithmetic errors, incorrect tax credits, or apparent mistakes.

(B)  Scrutiny Assessment (Section 143(3))

• Detailed examination by the Assessing Officer (AO) if discrepancies are detected.
• Requires notice under Section 143(2) and submission of supporting documents.

(C)  Best Judgment Assessment (Section 144)

• Conducted if the taxpayer fails to comply with notices (e.g., non-filing of returns, no response to scrutiny).

(D)  Reassessment (Sections 147–149)

• Initiated if income escapes assessment (e.g., undisclosed income).
• Time limit: Up to 3 years (extendable to 10 years for high-value cases).

3. Rectification of Mistakes (Section 154)

• Applicability: Corrects “apparent mistakes” (e.g., arithmetic errors, clerical oversights) in orders/intimations.
• Process:
  • Filed online via the Income Tax Portal for e-filed returns .
  • Types: Reprocessing returns, tax credit mismatches, or XML/JSON corrections .
• Time Limit: 4 years from the end of the financial year in which the order was passed .

4. Key Differences: Rectification vs. Revision

• All Sections related to Return of Income and Procedure of Assessment [Section 139 to 154] has been explained as below :

• Submission of Return of Income [Section 139(1)]
• Return of Income for Charitable Trusts & Institutions [Section 139(4A)]
• Return of Income for Political Parties [Section 139(4B)]
• Return of Income for Certain Associations & Institutions [Section 139(4C)]
• Mandatory Return Filing for Research Institutions [Section 139(4D)]
• Form and Manner of Furnishing Return of Income [Rule 12 of Income Tax Rules, 1962]
• Return of Loss [Section 139(3) read with Section 80]
• Belated Return [Section 139(4)]: Key Rules, Penalties & Filing Process
• Revised Return [Section 139(5)]: A Complete Guide
• Particulars to be Furnished with the Return of Income [Sections 139(6) & 139(6A)]
• When a Return of Income is Regarded as Defective [Explanation to Section 139]
• [Section 139C]- Power of Board to Dispense with Furnishing Documents with Return
• Filing of Return in Electronic Form [Section 139D]
• [Section 139B]- Submission of Returns through Tax Return Preparers (TRPs)
• Verification of Income Tax Returns [Section 140]
• Self-Assessment Under Section 140A
• Inquiry Before Assessment [Section 142]
• [Section 142A]- Estimates by Valuation Officer in Certain Cases
• Section 142B: Faceless Inquiry, Special Audit, and Valuation
• Processing of Returns under Section 143(1) – Summary Assessment
• Regular / Scrutiny Assessment [Section 143(3)]
• Assessment after Evidence [Section 143(3)]
• Best Judgment Assessment [Section 144]
• Section 144A: Power of Joint Commissioner to Issue Directions in Certain Cases
• Faceless Assessment [Section 144B]
• Income Escaping Assessment [Section 147]
• [Section 151A]- Faceless Assessment of Income Escaping Assessment
• [Section 153]- Time Limit for Completion of All Assessments and Reassessment
• Section 154: Rectification of Mistakes in Income Tax Orders
• Section 156 of the Income Tax Act, 1961: Notice of Demand
• Intimation of Loss [Section 157 of the Income Tax Act, 1961]
• (Section 157A)-Faceless Rectification, Amendments and Issuance of Notice or Intimation