April 2017 CA K Prasanna and ca Abhinaya Ramanujam

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1 Assessment Procedure April 2017 CA K Prasanna and ca Abhinaya Ramanujam

2 Topics Covered Return of Income Self-Assessment (S 140A) Enquiry before Assessment (S 142(1)) Summary Assessment (S 143(1)) Scrutiny Assessment (S 143(2) & (3)) Transfer Pricing Assessment and Dispute Resolution Panel (S 92CA & 144C) e-assessment (S 282) Best Practices

3 Assessment What is Assessment? When does assessment proceedings commence?

4 Types of Return

5 Due dates for Filing Return Any person not required to furnish Accountant s report u/s 92E of the Act Any person whose accounts are required to be audited under the Act Working partner of a Firm whose accounts are required to be audited under the Act Any person required to furnish TP report u/s 92E of the Act Any other person 30th September 30th September 30th November 31st July

6 Verification of Return Individual HUF Firm Himself; or Authorized representative Karta; or Any adult member Managing partner; or Any partner LLP Designated partner Any partner Company (Resident) Managing director; or Any other director Company (Non-resident) Person duly authorized

7 Discussion points Set off and carry forward in case of belated return Special deductions in the case of belated return Can belated return be revised? Under what circumstances can a return be revised? Can a return be revised more than once? Eligibility of loss carry forward in case of revised return

8 Self-Assessment Return under section 139, 142, 148, 153A, 158BC Proof of deposit to be submitted in the ROI Can a return be filed without payment of taxes q q Consequences of short payment Consequences of non-compliance

9 Enquiry before Assessment Two types - Notice to file return or furnish documents Notice issued for ascertaining income/loss of whom? No time limit to issue - Can 142(1) notice be issued after completion of assessment? Eligibility to carry-forward losses for return filed pursuant to 142(1) notice If accounts beyond 3 FYs is sought for? Consequences of non-compliance

10 Special Audit and Valuation Special Audit Ø Ø Ø Ø In what circumstances can special audit be directed? Cost in relation to special audit? Should books of accounts be first rejected? Direction to special audit Appealable? Valuation Officer Ø Ø Ø Ø Which assets can be referred for valuation? Time period for valuation report Is the report binding on the AO Can valuation report form basis for reopening?

11 Summary Assessment Arithmetic error, ineligible claim, etc. Significant Changes in FA 2017 Intimation to be sent within 1 year from end of the FY in which return was filed In case of refund entitled for interest? Can return be revised after summary assessment? Is intimation mandatory? Can intimation under section 143(1) be issued after notice for regular assessment u/s 143(2)? Way forward

12 Scrutiny Assessment - Notice Notice u/s. 143(2) Issuance vs Service Service by Affixture Can 143(2) notice be served if no return is filed? Timeline: 6 months from the end of FY in which return if furnished Notice issued after timeline not curable defect u/s 292BB Assessment without 143(2) notice Consequences of non-compliance

13 Notice under section 142(1) and 143(2) Notice under section 142(1) Notice under section 143(2) Notice for inquiry not assessment No time limit within which notice is to be served Books of accounts can be called for maximum 3 years Notice for assessment Notice is to be served within 6 months from the end of the FY when the ROI was filed No such restrictions. AO can invoke provisions of section 131 and call for earlier records Approval of Joint Commissioner required if statement of assets and liabilities not included in the accounts is required Notice can be issued even if the return of income is not filed No such provisions Notice can be issued only if the return is filed

14 Scrutiny Assessment Limited assessment vs. Complete assessment When a limited scrutiny converted into complete scrutiny? Principles of natural justice? Principle of consistency Res Judicata Evidence Burden of proof Fresh claim during assessment Goetze applicable? Assessment on a non-existent company Contents of Assessment order

15 Best-Judgement Assessment Situations when Best-Judgement assessment can be made Partial compliance? Issue notice to Assessee Record satisfaction Return filed after section 144

16 TP Assessment Reference to TP officer TP Assessment without regular assessment Transactions not referred to by AO Determination of ALP by AO Assessment order pursuant to TP order Penal consequences

17 Application before DRP Introduced in FA 2009 Faster litigation route Eligible Assessee DRP directions binding on AO; need not give opportunity to assessee Can DRP consider issues not covered in draft order? Final order passed by AO pursuant to DRP directions Revision u/s 263 possible? Final order passed by AO pursuant to DRP directions Appealable before? Whether penalty orders, withholding tax orders can be referred to DRP? Directions against the Department remedy? Can DRP set aside or direct further enquiry? Withdrawal of DRP application

18 Rectification Mistake apparent from record can be rectified by: Amending any order passed by such Authority Amending any Intimation u/s 143(1) What is mistake apparent from record? Online Rectification application Rectification of DRP directions? Doctrine of merger

19 e-assessment Section 282 of the Act read with Notification 2/2016 Consent to be obtained Manner in which notice to be served Consequences of non-compliance Practical experience?

20 Snapshot of timelines Particulars AY and before AY AY onwards Time limit for making Assessment order under section 143 or months from the end of relevant year Assessment year. 18 months from the end of relevant year Assessment year. 12 months from the end of relevant year Assessment year. Time limit for making assessment, reassessment or precomputation under section 147 Within 9 months from end of the financial year in which notice under section 148 was served. Within 12 months from end of the financial year in which notice under section 148 was served.

21 Best Practices Upon receiving any notice or order check for jurisdiction, validity and proper service Ensure the original envelope is a part of the file to prove date of receipt. Avoid lengthy submissions Rely on case laws which are of binding in nature Order sheet noting's Maintain details of date-wise information, submissions and representations made before the AO

22 ?

23 Thank you!

Overview of Transfer Pricing

Overview of Transfer Pricing Contents Legislative framework Transfer pricing study Assessment and Litigation Key Recent Developments Page 2 Transfer Pricing in India- Background April 1, 2001 onwards Comprehensive