Assessment Procedure, Faceless Assessment, Reassessment & Search Block Assessment

Statutory Cross-Reference Mapping: 2025 Act vs 1961 Act

A quick comparative reference table illustrating the corresponding sections between the two enactments:

1. Mandatory Application for Allotment of PAN [Section 262(1)]

The following persons are statutorily obligated to apply for allotment of a Permanent Account Number within the prescribed time limits:

2. Prescribed Transactions for Mandatory Quoting of PAN [Rule 159]

Under Section 262(1)(f) read with Rule 159 (corresponding to Old Rule 114B), every person must quote their PAN in documents pertaining to the following high-value financial transactions:

3. Aadhaar Linking & Penalties for Non-Compliance

1. Who is Statutorily Required to File a Return of Income? [Section 263(1)]

Under Section 263(1), the following entities and persons must furnish a return of income on or before the due date:

2. Seventh Proviso High-Value Expenditure & Transaction Triggers

Under the Seventh Proviso to Section 263(1) read with Rule 160 (Old 7th Proviso to Section 139(1) read with Rule 12AB), any person who is not otherwise required to file a return must mandatorily furnish a return of income if during the previous year he satisfies any of the following high-value financial criteria:

3. Statutory Deadlines for Filing Return of Income [Explanation 2 to Section 263(1)]

The "due date" for filing the return of income under Section 263(1) depends on the legal status and audit obligations of the assessee:

1. Belated Return of Income [Section 263(4) / Old 139(4)]

If an assessee fails to furnish the return of income within the statutory due date prescribed under Section 263(1), he may furnish a belated return at any time:

Severe Consequences of Filing a Belated Return:

2. Revised Return of Income [Section 263(5) / Old 139(5)]

If any person, having furnished a return under Section 263(1) or Section 263(4), discovers any omission or wrong statement therein, he may furnish a revised return:

3. Defective Return of Income [Section 263(7) / Old 139(9)]

Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within 15 days from the date of such intimation (or such extended period as granted upon application).

4. Modified Return on Business Reorganisation [Section 314 / Old 170A]

Section 314 provides an enabling mechanism for successor entities involved in business reorganisations (amalgamation, demerger, merger) sanctioned by the National Company Law Tribunal (NCLT) or High Court:

1. Concept, Eligibility & Time Limits for Updated Return [Section 263(6)]

Section 263(6) introduces a vital taxpayer-friendly compliance window allowing any person to furnish an Updated Return (ITR-U) of his income, whether or not he has already furnished a return under Section 263(1) (regular), Section 263(4) (belated), or Section 263(5) (revised) for that tax year.

Non-Eligibility & Statutory Bars on Filing Updated Return:

An updated return CANNOT be furnished if any of the following negative conditions apply:

2. Computation of Tax & Additional Tax Payable [Section 267]

Under Section 267, no updated return shall be valid unless it is accompanied by proof of payment of self-assessment tax, interest, late fees, and the prescribed additional income-tax.

1. Tax Return Preparers (TRP) Scheme [Section 264 / Old 139B]

Section 264 empowers the CBDT to frame a scheme enabling specified classes of persons to prepare and furnish their returns of income through authorized Tax Return Preparers (TRPs).

2. Persons Authorized to Verify & Sign the Return [Section 265 / Old 140]

A return of income must be authenticated and verified by the authorized signatory prescribed under Section 265. A return signed by an unauthorized person is invalid and void ab initio:

3. Self-Assessment Tax Payment & Shortfall [Section 266 / Old 140A]

Before furnishing any return of income under Section 263 or Section 267, the assessee must determine and pay the Self-Assessment Tax together with interest and fee payable for any delay.

1. Inquiries Before Assessment & Notice to Produce Accounts [Section 268(1)]

Under Section 268(1), for the purpose of making an assessment under the Act, the Assessing Officer may serve a notice on any person who has furnished a return or to whom the time allowed for furnishing return has expired:

2. Direction for Special Audit by Chartered Accountant [Section 268(5) / Old 142(2A)]

If at any stage of the proceedings, having regard to the prescribed statutory criteria, the Assessing Officer is of the opinion that it is necessary, he may direct the assessee to get his accounts audited by an accountant nominated by the Principal Chief Commissioner / Chief Commissioner / Principal Commissioner / Commissioner:

3. Estimation of Value of Capital Assets by Valuation Officer [Section 269 / Old 142A]

For the purpose of assessment or reassessment, the Assessing Officer may refer to the Valuation Officer to make an estimate of the value of any asset, property, or investment, including the fair market value of any asset.

2. Notice for Scrutiny Assessment [Section 270(8) & 270(9) / Old 143(2)]

Where a return has been furnished under Section 263 or Section 267, if the Assessing Officer or NaFAC considers it necessary to ensure that the assessee has not understated income, declared excessive loss, or underpaid tax, he shall serve a notice requiring the assessee to produce books, evidence, or attend proceedings:

3. Regular Scrutiny Assessment Order [Section 270(12) / Old 143(3)]

After considering the evidence, documents, and hearing the assessee (or through faceless electronic submissions under NaFAC), the Assessing Officer passes a speaking assessment order in writing determining total income or loss and tax payable or refundable.

1. Best Judgment Assessment (Ex-Parte Assessment) [Section 271 / Old 144]

Section 271 casts a mandatory duty on the Assessing Officer to make the assessment of total income or loss to the best of his judgment and determine the tax payable by the assessee upon the occurrence of any of the following four statutory default triggers:

2. Directions of Joint Commissioner in Assessment [Section 272 / Old 144A]

Under Section 272, the Joint Commissioner may call for and examine the record of any pending assessment proceeding and issue directions to the Assessing Officer:

1. Faceless Assessment Scheme & NaFAC Framework [Section 273 / Old 144B]

Section 273 codifies the legal architecture of the Faceless Assessment Scheme, designed to impart greater transparency, accountability, and efficiency by eliminating interface between the taxpayer and the tax department:

2. Dispute Resolution Panel (DRP) [Section 275 / Old 144C]

Section 275 provides an alternative fast-track dispute resolution mechanism for Eligible Assessees to resolve assessment disputes before final assessment orders are passed:

Procedural Roadmap & Statutory Timelines:

1. Scope of Reassessment & Escaped Income [Section 279 / Old 147]

Subject to the provisions of Sections 280 to 284, if any income chargeable to tax has escaped assessment for any assessment year, the Assessing Officer may assess or reassess such income or recompute loss or depreciation allowance.

2. Issue of Reassessment Notice [Section 280 / Old 148]

Before making an assessment, reassessment, or recomputation under Section 279, the Assessing Officer shall serve on the assessee a notice requiring him to furnish a return of income within three months from the end of the month in which such notice is issued, or within such further time as may be allowed.

3. Mandatory Inquiry & Opportunity Before Notice [Section 281 / Old 148A]

Section 281 creates a robust statutory safeguard preventing arbitrary or fishing reassessments by prescribing a mandatory multi-stage preliminary inquiry:

4. Time Limits for Notice for Reassessment [Section 282 / Old 149]

Section 282 prescribes strict limitation boundaries beyond which no reassessment notice under Section 280 can be issued:

5. General Provisions & Tax Rates Applicable to Escaped Income [Section 285]

Section 285 clarifies the applicable statutory tax rates, surcharge, and cess on escaped income assessed under Section 279, ensuring that income is taxed at rates applicable to the relevant assessment year, subject to special anti-evasion rates under Section 115BBE where unexplained credits or assets are uncovered.

6. Time Limits for Completion of Assessments & Reassessments [Section 286 / Old 153]

Section 286 lays down the final statutory outer limits for completing assessment and reassessment orders. Orders passed after these deadlines are time-barred and void ab initio:

1. Rectification of Mistake Apparent from the Record [Section 287 / Old 154]

Under Section 287, with a view to rectifying any mistake apparent from the record, any income-tax authority may amend any order passed by it, or any intimation sent under Section 270(1):

2. Notice of Demand [Section 289 / Old 156]

When any tax, interest, penalty, fine, or any other sum is payable in consequence of any order passed under this Act, the Assessing Officer shall serve upon the assessee a Notice of Demand in the prescribed form specifying the sum so payable.

3. Intimation of Loss [Section 291 / Old 157]

Where in the course of assessment of total income, the Assessing Officer computes that the assessee has sustained a loss, the AO shall notify to the assessee by an order in writing the amount of loss so computed, enabling the assessee to carry forward and set off the loss under Section 121 in subsequent years.