Income Tax Act

Official PDF pages 356–360

SOURCE PDF PAGE 356
( e )   specialised nature of business activity of the assessee,
and interests of the revenue, is of the opinion that it is necessary so to do, he may,
after giving the assessee a reasonable opportunity of being heard, and with the
previous approval of the Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner, direct the assessee to get either or both
of the following:—
( i )   to get the accounts audited by an accountant, and to furnish a report
of such audit in the prescribed form duly signed and verified by such
accountant and setting forth such particulars, as may be prescribed, and
such other particulars as the Assessing Officer may require;
( ii )   to get the inventory valued by a cost accountant, and to furnish a report
of such inventory valuation in the prescribed form as duly signed and
verified by such cost accountant and setting forth such particulars, as
may be prescribed, and such other particulars as the Assessing Officer
may require.
(6) The accountant or the cost accountant as referred to in sub-section (5) shall be
nominated by the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner for the purposes of the said sub-section.
(7) The provisions of sub-section (5) shall have effect irrespective of whether or not
accounts of the assessee have been audited under any other law for the time being
in force or otherwise.
(8) Every report under sub-section (5) shall be furnished by the assessee to the
Assessing Officer within such period as specified by the Assessing Officer.
(9) The Assessing Officer may, on his own motion, or on an application made in
this behalf by the assessee and for any good and sufficient reason, subject to the
provisions of sub-section (10), extend the period referred to in sub-section (8) by
such further period or periods as he thinks fit.
(10) The aggregate of the period originally fixed under sub-section (8) and the period
or periods so extended, as referred to in sub-section (9), shall not, in any case, exceed
six months from the end of the month in which the direction under sub-section (5)
is received by the assessee.
(11) The expenses of any audit or inventory valuation under sub-section (5) (includ -
ing incidental expenses and remuneration of the accountant or the cost accountant)
shall be—
( a )   determined by the Principal Chief Commissioner or Chief Commission -
er or Principal Commissioner or Commissioner as per such guidelines
issued in this behalf; and
( b )   paid by the Central Government.
(12) The assessee shall, except where the assessment is made under section 271,
be given an opportunity of being heard in respect of any material gathered on the
basis of any inquiry under sub-section (4), or any audit or inventory valuation
under sub-section (5) and proposed to be utilised for the purposes of the assess-
ment.

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(13) For the purposes of this section, “cost accountant” means a cost accountant as
defined in section 2(1)( b )of the Cost and Works Accountants Act, 1959 (23 of 1959)
and who holds a valid certificate of practice under section 6(1) of the said Act.
Estimation of value of assets by Valuation Officer.
269 .   (1) The Assessing Officer may, for the purposes of assessment or reassessment,
make a reference to a Valuation Officer to estimate the value, including the
fair market value, of any asset, property or investment and submit a copy of report
to him.
(2) The Assessing Officer may make a reference to the Valuation Officer under
sub-section (1) whether or not he is satisfied about the correctness or completeness
of the accounts of the assessee.
(3) ( a ) For estimating the value, including the fair market value, of the asset, property,
or investment, the Valuation Officer or any engineer, overseer, surveyor, or assessor
authorized by such Valuation Officer, may, subject to any rules made in this regard
and at such reasonable times, as may be prescribed,—
( i )   enter any land within the limits of the area assigned to the Valuation
Officer; or
( ii )   enter any land, building, or other place belonging to or occupied by any
person in connection with whose assessment a reference has been made
to the Valuation Officer; or
( iii )   inspect any asset, property, or investment in respect of which a reference
has been made to the Valuation Officer.
( b ) The Valuation Officer or any engineer, overseer, surveyor, or assessor, may require
any person in charge of, or in occupation or possession of, such land, building, or
other place or such asset, property, or investment to afford the necessary facility to:—
( i )   survey or inspect such land, building, or other place or such asset, prop -
erty, or investment;
( ii )   estimate its value; or
( iii )   inspect any books of account, document, or record relevant for the valu -
ation of such asset, property, or investment and gather other particulars
relating to it.
( c ) The Valuation Officer, engineer, overseer, surveyor, or assessor shall enter any
land, building or place referred to in clause ( a )( ii ), or inspect any asset, property,
or investment referred to in clause ( a )( iii ), with the consent of the person in charge
of, or in occupation or possession of, such land, building, place, or asset, property,
or investment, after providing such person at least two days’ notice in writing of
his intention to do so.
( d ) If a person who, under this sub-section, is required to afford any facility to the
Valuation Officer or the engineer, overseer, surveyor, or assessor, either refuses or
evades to afford such facility, the Valuation Officer shall have all the powers as are

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vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying
a suit in respect of the following matters,—
( i )   discovery and inspection;
( ii )   enforcing the attendance of any person, including any officer of a banking
company, and examining him on oath;
( iii )   compelling the production of books of account and other documents;
and
( iv )   issuing commissions.
(4) The Valuation Officer shall, estimate the value of the asset, property or investment
after taking into account such evidence as the assessee may produce and any other
evidence in his possession gathered, after giving an opportunity of being heard to
the assessee.
(5) The Valuation Officer may estimate the value of the asset, property or investment
to the best of his judgment, if the assessee does not co-operate or comply with his
directions.
(6) The Valuation Officer shall send the report of the estimate made under sub-sec -
tion (4) or (5), to the Assessing Officer and the assessee.
(7) With a view to rectifying any mistake apparent from the record, the Valuation
Officer may amend any report made by him, as per section 287.
(8) The Assessing Officer may, on receipt of the report from the Valuation Officer,
and after giving the assessee an opportunity of being heard, take into account such
report in making the assessment or reassessment.
(9) The Valuation Officer shall send the report referred to in sub-section (6) with -
in six months from the end of the month in which the reference is made under
sub-section (1).
(10) For the purposes of this Act,—
( a )   the Central Government may appoint as many Valuation Officers, as
necessary; and
( b )   subject to the rules and orders of the Central Government regulating the
conditions of service of persons in public services and posts, a Principal
Chief Commissioner, or a Chief Commissioner, or a Principal Commis -
sioner or a Commissioner may appoint as many engineers, overseers,
surveyors and assessors as may be necessary to assist the Valuation
Officers in the performance of their functions.
Assessment.
270.   (1) Where a return has been made under section 263, or in response to a notice
under section 268(1) such return shall be processed in the following manner:—
( a )   the total income or loss shall be computed after making the adjustments
towards the following:—

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( i )   any arithmetical error in the return; or
( ii )   an incorrect claim, if such incorrect claim is apparent from any
information in the return; or
( iii )   any such inconsistency in the return, with respect to the information
in the return of any preceding tax year, as may be prescribed; or
( iv )   disallowance of loss claimed, if return of the tax year for which set
off of loss is claimed was furnished beyond the due date specified
under section 263(1); or
( v )   disallowance of expenditure or increase in income indicated in
the audit report but not taken into account in computing the total
income in the return; or
( vi )   disallowance of deduction claimed  
55
[ *** ]   under any of the provi -
sions of Chapter VIII-C, if the return is furnished beyond the due
date specified under section 263(1);
( b )   the tax, interest and fee, if any, shall be computed on the basis of the
total income computed under clause ( a );
( c )   the sum payable by, or the amount of refund due to, the assessee shall be
determined after adjustment of the tax, interest and fee, if any, computed
under clause ( b ) by—
( i )   any tax deducted at source;
( ii )   any tax collected at source;
( iii )   any advance tax paid;
( iv )   any rebate or relief allowable under Chapter IX;
( v )   any tax paid on self-assessment; and
( vi )   any amount paid otherwise by way of tax, interest or fee;
( d )   an intimation shall be sent to the assessee specifying the sum determined
to be payable by, or refund due to, the assessee under clause ( c ); and
( e )   the amount of refund due to the assessee in pursuance of the determi -
nation under clause ( c ) shall be granted to the assessee.
(2) Before making any adjustment under sub-section (1)( a ),—
( a )   a communication is to be given to the assessee of such adjustments either
in writing or in electronic mode;
( b )   the response received from the assessee in this regard, if any, shall be
considered; and in a case where no response is received within thirty
days of the issue of such communication, such adjustments shall be made
and thereafter the intimation under sub-section (1)( d ) shall be sent.
55.   Words “under section 144 or” omitted by the Finance Act, 2026, w.e.f.   1-4-2026 .

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(3) For the purposes of sub-section (1), an intimation shall also be sent to the
assessee in a case where the loss declared in the return by the assessee is adjusted
but no tax, interest or fee is payable by, or no refund is due to, him.
(4) No intimation under sub-section (1) shall be sent after the expiry of nine months
from the end of the financial year in which the return is made.
(5) For the purposes of sub-sections (1) to (4),—
( a )   “an incorrect claim apparent from any information in the return” shall
mean a claim, on the basis of an entry, in the return,—
( i )   of an item, which is inconsistent with another entry of the same or
some other item in such return; or
( ii )   in respect of which the information required to be furnished under
this Act to substantiate such entry has not been so furnished; or
( iii )   in respect of a deduction, where such deduction exceeds specified
statutory limit which may have been expressed as monetary amount
or percentage or ratio or fraction;
( b )   “the acknowledgement of the return” shall be deemed to be the intima -
tion in a case where no sum is payable by, or refundable to, the assessee
under sub-section (1)( c ), and where no adjustment has been made under
sub-section (1)( a ).
(6) For the purposes of processing of returns under sub-section (1), the Board may
make a scheme for centralised processing of returns with a view to expeditiously
determining the tax payable by, or the refund due to, the assessee as required under
the said sub-section.
(7) The scheme made under sub-section (6) shall, as soon as may be laid before
each House of Parliament.
(8) Where a return has been furnished under section 263 or in response to a notice
under section 268(1), the Assessing Officer or the prescribed income-tax authority,
if, considers it necessary or expedient to ensure that the assessee—
( a )   has not understated the income;
( b )   has not computed excessive loss;
( c )   has not under-paid the tax in any manner,
shall serve on the assessee a notice requiring him, on a date to be specified therein,—
( i )   either to attend the office of the Assessing Officer; or
( ii )   to produce, or cause to be produced before the Assessing Officer any
evidence on which the assessee may rely in support of the return.
(9) No notice under sub-section (8) shall be served on the assessee after the expiry
of three months from the end of the financial year in which the return is furnished.