CA. PRAMOD JAINFCA, FCS, FCMA, LL.B, MIMA, DISA
CA. PRAMOD JAINFCA, FCS, FCMA, LL.B, MIMA, DISA
LUNAWAT & CO.Chartered Accountants
LUNAWAT & CO.Chartered Accountants
17th February 201517th February 2015
THE FIRST THINGLunawat & Co.
Lunawat & Co.
Assessment Regular
[143(3)]
Best Judgment [144]
Reopening [147]
Block [158BC]
PROCEDURE AFTER FILING OF RETURN
Lunawat & Co.
Selection of Case
•CASS
•AIR
•CIB
•26AS
• Investigation
•Manual -Compulsory
•CASS
•AIR
•CIB
•26AS
• Investigation
•Manual -Compulsory
Issue & Service of Notice
• Post
• Hand
• Electronic Mode
• Affixture
• Post
• Hand
• Electronic Mode
• Affixture
Assessment Procedure
•TPO
•DVO
•Special Audit
•133(6)
•131
•TPO
•DVO
•Special Audit
•133(6)
•131
Issue of Order
• 143(3)
• 144
• 147
• 158BC
• 143(3)
• 144
• 147
• 158BC
JURISDICTION
�Jurisdictions - 120/124, transfer of
jurisdiction -127, effect on issue of notice or
completion of assessment by wrong
jurisdiction
� Proceeding is nullity where AO has no
jurisdiction ab initio to take the proceedings –
Sant Baba Mohan Singh v. CIT (1973) ITR 197
(All)
� Where there is no inherent lack of jurisdiction
but such jurisdiction is improperly exercised, the
concerned proceedings may be regularised by
Superior Authorities – Mahalliram Ramniranjan
Das v. CIT (1985) 156 ITR 885 (Pat)
Lunawat & Co.
CITIZEN’S CHARTERLunawat & Co.
� Issued in November 2014
�To deliver quality services
�Provides service delivery standards
�Refunds of electronic filed returns u/s
143(1) – 6 months, other - 9 months
�Rectification - 2 months
�Registration of charitable Trusts – 4
months
�Giving appeal effect - 1 month
�Responsibility??? Use???
PROCESSING OF RETURN
�Processing u/s 143(1)
�S. 143 (ID) - where a notice has been
issued to a taxpayer u/s 143(2), it
shall not be necessary to process the
return in such a case. - Instruction
No. 001/2015 dt 13.1.15
�Citizen Charter???
�Rectification after selection of
scrutiny??
Lunawat & Co.
AO’S RIGHTS & DUTIES
�To hear evidences
�To ask sufficient reasons for adjournment
�Pass an Order
�Compute income / loss / tax / refund
�Call information, records and documents u/s
142 (1) / 133
�Call books of accounts, hold the books of
account,
�Call information or confirmation from
supplier, parties, lender , shareholders etc
Lunawat & Co.
AO’S RIGHTS & DUTIES� Issue summons and call personnel presence of
supplier, parties, lender, shareholders etc. u/s 131
� Reference for Special audit by department – 142(2A)
� Reference to TPO – 92CA with previous approval of
Commissioner
� Reference to DVO
� S. 55A – Capital gains only if variation more than
15% or 25k (R. 111AA)
� S.142A
�S. 69 -unexplained investments
�S. 69A -Unexplained money
�S. 69B -investments not fully disclosed in books
�S. 56 (2) - Gifts
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DUTIES OF AO� Tax authorities would not be acting properly and
judiciously if they exercise their power in the
manner most beneficial to revenue and
consequently most adverse to assessee – CIT v.
Simon Carves 105 ITR 212, 218 (SC)
� To draw attention of the assessee to the deductions,
reliefs and refunds to which he seems to be entitled
on the facts of the case, which the assessee omitted
to claim – Circular dated 11.04.1955
� To look into objections raised by the assessee to his
proposed assessment and give reasons for rejecting
the same – K Mustafa v. State of Kerala 256 ITR 538
Lunawat & Co.
POA� Power of Attorney Act 1882
� Not court fee stamp, but must be on a stamp paper
� It is a Special POA. It should be strictly construed
� Shall be attested by two witnesses and Notarised
� Must not exceed authority given in POA.
� May do all those acts which are authorised, but only
by a particular method, if the POA so indicates.
� If there is a breach of any condition then he shall be
liable except in a case where acted reasonably.
� Must act with utmost good faith & tell donor nature
& extent of any intt. which may conflict with duty.
� May pass on his powers & duties to another person
but only if authorised to do so by the POA
� If case of POA at Foreign Place, local stamp duty also
Lunawat & Co.
SERVICE OF NOTICE (282)� Either by post; or
� Registered post; or Approved Courier (Speed Post)
� In the manner summons may be issued under CPC
� May be served personally upon the individual or upon his agent
duly authorised in terms of r. 6 of O. 3 of CPC
� If person is not available then on any male member of the
family of the individual named in the notice
� Substituted service in terms of r. 20 of O. 5 of CPC (Affixture)
� Electronic mode
� Service on Employees?
� Service on Agents?
� Service in case of death of the assessee?
� Service on Legal Representatives?
� Irregularity waived if assessee proceeds without objecting
Lunawat & Co.
SPECIAL ATTENTION
�S. 14A, 2(22)(e)
�Cash credit
� Investment in immovable property
�Gifts
� Importance of Affidavit and its use and
effect
�Stock filed with bank and stock as per
audited accounts
�26AS Reconciliation
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ASSESSMENT
� New claim of deduction, allow ability of expenses,
exemption etc during the assessment proceedings –
Which was not claimed or wrongly miss out in
return of income
� Use of Order / judgments of apex court, high court
and ITAT.
� The use and important of notifications, circular
and administrative instructions issued by the CBDT
� Role or limitation of higher authority i.e Additional
commissioner of income tax and or Commissioner /
chief commissioner in assessment proceeding , How
the assessee can use these rights in assessment
Lunawat & Co.
ASSESSES’ RIGHTS & DUTIES
�Cross Examination
�Rebut the evidence
�Examine record and obtain copy
�Ask AO to issue notice u/s 131 / 133 to
creditors etc.
�To appoint attorney through POA
�To produce documents required by
AO
Lunawat & Co.
CERTAIN CASE LAWS
� Principles of natural justice are applicable - Elementary
principle of natural justice is that the assessee should
have knowledge of the material which is going to be used
against him so that he may be able to meet it - Gargi Din
Jwala Prasad v. CIT [1974] 96 ITR 97 (All.)
� ITO can collect material by private enquiry - But if he
desires to use the material so collected, the assessee must
be informed of the material and must be given an
adequate opportunity of explaining it - C. Vasantlal & Co.
v. CIT [1962] 45 ITR 206 (SC)
� Affidavits cannot be rejected straightaway - Rejection of an
affidavit filed by assessee is not justified unless assessee
has either been cross-examined or called upon to produce
documentary evidence in support of affidavit sworn by him
- L. Sohan Lal Gupta v. CIT [1958] 33 ITR 786 (All.).
Lunawat & Co.
CERTAIN CASE LAWS
� AO is empowered to launch fishing and roving
enquiry with a view to detect tax evasion u/s 133(6) -
Kathiroor Service Cooperative Bank Ltd. vs. CIT
(CIB) & Anrs – [2013-ITRV-SC-144]
� “Issue” of notice is equivalent to its “service” for
purposes of section 143(2) - V.R.A. Cotton Mills (P)
Ltd. vs. Union of India & Others – [2012-ITRVHC-
P&H-040]
� Assessee is entitled to raise claims before appellate
authorities even if claim is not made in return of
income - CIT vs. Pruthvi Brokers & Shareholders
Pvt. Ltd. – [2012-ITRVHC-MUM-144]
Lunawat & Co.
Handling Scrutiny
Art
Ability or Skill
Science
Knowledge about Subject
Lunawat & Co.
Lunawat & Co.
ENTRANCE
A smile confuses an
approaching frown.
Don't tell your friends about
your indigestion. "How are
you" is a greeting, not a
question. Arthur Guiterman
Lunawat & Co.
APPEARANCE
Appearance rules the worldFriedrich Schiller
Clothes and manners do not
make the man; but when he
is made, they greatly
improve his appearanceArthur Ashe
Lunawat & Co.
�Mobile manners
�Be a good listener
�Use of language
Lunawat & Co.
�Keeping of files
�Be effective speaker
�Taking along someone
Lunawat & Co.
POLITENESS"To be humble
to superiors is duty, to equals courtesy,
to inferiors nobleness." Benjamin Franklin
"Be calm in arguing; for fierceness makes error a fault,
and truth discourtesy." George Herbert
Lunawat & Co.
CONFIDENCE
"You have to expect things of yourself before you can do
them.“Michael Jordan
Lunawat & Co.
Lunawat & Co.
TECHNICALITIES
�Knowledge of Subject
�Knowledge of Procedure
�Knowledge of Terminologies
�Teaching the Authority
�Telling mistake of other assesses
�Don’t miss the dates
Lunawat & Co.
MASTER THE FACTS
“Always remember that if you master the facts, legal principles can be applied at
any stage of the proceedings.
In other words, mastery of facts is as important or
rather more important than mastery over the law”
Lunawat & Co.
SAY WHAT YOU HAVE
WRITTEN
AND
WRITE WHAT YOU SAY
Lunawat & Co.
WRITTEN REPRESENTATIONS
�Use PAN, subject, year..
�Positive approach
�Negate Specific question
�To address
�Factual position
�Legal position
Lunawat & Co.
IT’S A MIND GAME
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DON’TS
�Forget POA
�Misstate the fact
�Cite wrong or overruled
cases
�Be eager to get the case
done
Lunawat & Co.
CHARACTER“Character is your greatest
asset, from the material as well
as the spiritual point of view.
Character will enable you to
earn your livelihood, in the
right, honest and dignified
manner which will also be
beneficial to society in general”Shri G. V. Mavalankar, First Speaker of Lok Sabha
Lunawat & Co.
REMEDIES AFTER ASSESSMENT
Lunawat & Co.
Assessee
Rectification u/s 154
Appeal u/s 246A
Revision u/s 264
Department
Rectification u/s 154
Revision u/s 263 / 264
Re-assessment u/s 147/148
STAGES OF APPEAL
CIT (A)
ITAT
High Court
Supreme Court
Lunawat & Co.
Lunawat & Co.
APPEALABLE ORDERS BEFORE CIT(A) – S. 246A
� Intimation u/s 143(1) / 143 (1B) / 200A(1)
�Assessment order u/s 143(3) (except DRP/
order u/s 144BA) or 144
�Assessment /Reassessment / recomputation
u/s 147 (except DRP/ order u/s 144BA) / 150
�Rectification order u/s 154 / 155
�Assessment / reassessment order u/s 153A
(except DRP/ order u/s 144BA)
�Assessment order in respect of fringe
benefits u/s 115WE(3) or 115WF or 115WG
Lunawat & Co.
APPEALABLE ORDERS BEFORE CIT(A) – S. 246A
�Order u/s 201(1) / 201(1A) / 206C(6A) /
237levying interest for delay in remitting
TDS or failure to deduct TDS
�Block assessment order in case of search or
requisition u/s 158BC
�Order imposing penalty u/s 221 or 271 … or
imposing penalty under chapter XXI
�Order u/s 158BFA(2) for concealment in case
of block assessment.
�Order u/s 163 treating assessee as agent of
non-resident
�Order u/s 170(2) / 170(3) / 171
Lunawat & Co.
PREPARATION OF APPEAL
�Appeal to be filed in 2 sets before CIT(A)
of own Range
�Assessed tax must be paid before filing
appeal – stay for contested demand can
be made.
�Grounds of appeal should be precise &
non-agrumentative
�Statement of facts should be concise –
detailed paper book may be filed while
hearing
�Additional grounds can be filed if
omission not willful or unreasonable
Lunawat & Co.
PREPARATION OF APPEAL
�Use of clear & easy language should be
preferred while drafting
�Appeal to be filed within 30 days of
service of order / intimation
�Appeal can be represented by assessee or
his designated attorney
�Must be signed by the authorised
signatory u/s 140
�Fee from Rs. 250-500-1000
Lunawat & Co.
DOCUMENTS TO BE FILED
�Form 35
�Grounds of appeal
�Statement of facts
�Original notice of demand
�Certified true copy of impugned
order
�Letter of authority / POA
�Original counterfoil of appeal filing
fee
Lunawat & Co.
HEARING AND DISPOSAL
� Can have number of hearings before disposal
� Can ask for additional documents, details as
deems fit
� Additional evidence can be placed at the time of
hearing if the assessee did not have opportunity
to present before lower authorities
� CIT(A) has wide & plenary powers, wider than of
Tribunal
� CIT(A) may confirm, reduce, enhance or annul
the A.O’s order
� He has to pass a speaking order
Lunawat & Co.
CAUTION
� CIT(A)’s power to enhance
� No withdrawal
� Alternative remedy
� Revision u/s 264
� Rectification u/s 154
Lunawat & Co.
Lunawat & Co.
PREPARATION OF APPEAL
�Appealable orders:
� Order of CIT(A)
� Order of chief commissioner u/s 272A
� Order u/s 12AA, 80G
� Order of commissioner u/s 263 or 154
amending order u/s 263
� Order under DRP
� Order u/s 115VZC(1)
� Order w.r.t u/s 144BA w.e.f. 2016-17
Lunawat & Co.
PREPARATION OF APPEAL
�Grounds of appeal should be precise & non-
agrumentative
�Statement of facts should be concise
�Additional grounds can be filed if omission
not willful or unreasonable
�Appeal to be filed in 3 sets within 60 days of
service of order
�Appeal can be represented by assessee or
his designated attorney
�Must be signed by the authorised signatory
u/s 140
�Fee from Rs. 500-1500- (1% maximum 10000)
Lunawat & Co.
DOCUMENTS TO BE FILED
�Form 36
�Grounds of appeal
�Certified true copy of impugned
order
�Entire set of appeal filed before
CIT(A)
�Letter of authority / POA
�Original counterfoil of appeal filing
fee, in case of online fee – certified
copy of challan
Lunawat & Co.
COURT ROOM – THE REAL TEST� ITAT – highest fact finding body
�To observe the code of formal dressing &
conduct.
�Paper book may be filed 3 sets at least 15
days in advance
�Application of judicial decisions to your
facts
�Adverse judicial decisions
�Tax department represented by
‘Departmental Representative’ – meet his
arguments
�No informal arguments can be placed
Lunawat & Co.
Get ready to graduate
to next level
Lunawat & Co.
�You know the facts at its best.
�You know the strengths and weakness of the matter.
�You know the law, its just a matter of practice.
WHY YOU CAN DO IT BEST?Lunawat & Co.
