Income Tax Act

Official PDF pages 361–365

SOURCE PDF PAGE 361
(10) On the day specified in the notice issued under sub-section (8), or as soon
afterwards as may be, after hearing such evidence as the assessee may produce and
such other evidence as the Assessing Officer may require on specified points, and
after taking into account all relevant material which he has gathered, the Assessing
Officer, subject to the provisions of sub-sections (11) and (13), shall—
( a )   by an order in writing, make an assessment of the total income or loss
of the assessee; and
( b )   determine the sum payable by him or refund of any amount due to him
on the basis of such assessment.
(11) In the case of entities referred to in sub-section (12), which are required to
furnish the return of income under section 263(1)( a )( iv ), no order under sub-sec -
tion (10) making an assessment of the total income or loss of any such entity shall
be made by the Assessing Officer, without giving effect to the provisions of section
11, unless—
( i )   the Assessing Officer has intimated the Central Government or the
prescribed authority the contravention of the provisions mentioned in
Schedule III (Table: Sl. No. 23, 24 or 25), by such entity, where in his
view such contravention has taken place; and
( ii )   the approval granted to such entity has been withdrawn or notification
issued in respect of such entity has been rescinded.
(12) For the purposes of sub-section (11), the entities shall be—
( a )   a research association referred to in Schedule III (Table: Sl. No. 23);
( b )   an association or institution referred to in Schedule III (Table: Sl. No.
24);
( c )   an institution referred to in Schedule III (Table: Sl. No. 25).
(13) In the case of a registered non-profit organisation, where the Assessing Officer
is satisfied that any such entity has committed any specified violation as mentioned
in section 351(1), he shall—
( a )   send a reference to the Principal Commissioner or Commissioner to
withdraw the approval or registration; and
( b )   no order under sub-section (10) making an assessment of the total income
or loss of such registered non-profit organisation shall be made by him
without giving effect to the order passed by the Principal Commissioner
or Commissioner under section 351(2)( ii )( A ) or ( B ).
(14) While making an assessment under sub-section (10), where the Assessing
Officer is satisfied that the activities of the university, college or other institution
referred to in section 45(3)( a ) (herein referred to as entity) are not being carried
out in accordance with all or any of the conditions subject to which such entity
was approved, then—
( a )   he may, after giving a reasonable opportunity of showing cause against
the proposed withdrawal to the concerned entity, recommend to the
Central Government to withdraw the approval; and

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SOURCE PDF PAGE 362
( b )   the Central Government may by order, withdraw the approval and forward
a copy of the order to the concerned entity and the Assessing Officer.
(15) Where a regular assessment under sub-section (10) or section 271 is made,—
( a )   any tax or interest paid by the assessee under sub-section (1) shall be
deemed to have been paid towards such regular assessment;
( b )   if no refund is due on regular assessment or the amount refunded under
sub-section (1) exceeds the amount refundable on regular assessment, the
whole or the excess amount so refunded shall be deemed to be tax payable
by the assessee and the provisions of this Act shall apply accordingly.
Best judgment assessment.
271 .   (1) If any person—
( a )   fails to furnish the return required under section 263(1) or (4) or (5)   or
(6); or
( b )   fails to comply with all the terms of a notice issued under section 268(1)
or fails to comply with a direction issued under section 268(5); or
( c )   having made a return, fails to comply with all the terms of a notice issued
under section 270(8),
the Assessing Officer, after taking into account all relevant materials which he has
gathered, shall, after giving the assessee an opportunity of being heard, make the
assessment of the total income or loss to the best of his judgment and determine
the sum payable by the assessee on the basis of such assessment.
(2) The Assessing Officer before making an assessment under sub-section (1) shall,
subject to the provisions of sub-section (3), serve a notice on the assessee to show
cause, on a date and time to be specified in the notice, as to why assessment should
not be completed to the best of his judgment.
(3) It shall not be necessary to give the opportunity referred to in sub-section (2) in
a case where a notice under section 268(1) has been issued prior to the making of
an assessment under this section.
Power of Joint Commissioner to issue directions in certain cases.
272.   (1) A Joint Commissioner may, on his own motion or on a reference being
made to him by the Assessing Officer or on the application of an assessee, call
for and examine the record of any proceeding in which an assessment is pending
and, if he considers that, having regard to the nature of the case or the amount
involved or for any other reason, it is necessary or expedient so to do, he may—
( a )   issue such directions as he thinks fit for the guidance of the Assessing
Officer to enable him to complete the assessment; and
( b )   such directions shall be binding on the Assessing Officer.
(2) No directions which are prejudicial to the assessee shall be issued under sub-sec -
tion (1) without giving an opportunity of being heard to the assessee.
(3) For the purposes of this section, no direction as to the lines on which an inves -
tigation connected with the assessment should be made, shall be deemed to be a
direction prejudicial to the assessee.

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SOURCE PDF PAGE 363
Faceless Assessment.
273.   (1) Irrespective of anything to the contrary contained in any other provision of
this Act, the assessment, reassessment or recomputation under section 270(10)
or 271 or 279, as the case may be, with respect to the cases referred to in sub-section
(2), shall be made in a faceless manner as per such procedure, as may be prescribed
in this behalf.
(2) The faceless assessment under sub-section (1) shall be made in respect of such
territorial area, or persons or class of persons, or incomes or class of incomes, or
cases or class of cases, as may be specified by the Board.
(3) The Board may, for the purposes of faceless assessment, set up the following
Centre and Units and specify their functions and jurisdiction:—
( a )   a National Faceless Assessment Centre to facilitate the conduct of faceless
assessment proceedings in a centralised manner including assigning the
case selected for the purposes of faceless assessment under this section
to a specific assessment unit, intimating the assessee that assessment
in his case shall be completed in accordance with the provision of this
section, serving a notice to the assessee under section 268(1) or 270(8),
and forwarding any response of the assessee to the assessment unit;
( b )   such assessment units, as it may deem necessary to conduct the face -
less assessment, to perform the function of making assessment, which
includes analysis of the material furnished by the assessee or any other
person, identification of points or issues material for the determination
of any liability (including refund) under this Act, seeking information
or clarification on points or issues so identified, determination of any
variation prejudicial to the assessee, and such other functions as may
be required for the purposes of making faceless assessment;
( c )   such verification units, as it may deem necessary to facilitate the conduct
of faceless assessment, to perform the function of verification, which
includes enquiry, cross verification, examination of books of account,
examination of witnesses and recording of statements, and such other
functions as may be required for the purposes of verification;
( d )   such technical units, as it may deem necessary to facilitate the conduct
of faceless assessment, to perform the function of providing technical
assistance which includes any assistance or advice on legal, accounting,
forensic, information technology, valuation, transfer pricing, data ana -
lytics, management or any other technical matter under this Act or an
agreement entered into under section 159, which may be required in a
particular case or a class of cases, under this section;
( e )   such review units, as it may deem necessary to facilitate the conduct of
faceless assessment, to perform the function of review of any variation
proposed by the assessment unit (wherever it is so considered necessary
by the National Faceless Assessment Centre), which includes checking
whether the relevant and material evidence has been brought on record,
relevant points of fact and law have been duly incorporated, the issues
requiring addition or disallowance have been incorporated and such
other functions as may be required for the purposes of review.

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SOURCE PDF PAGE 364
(4) In accordance with the procedure as may be prescribed under sub-section (1),—
( a )   the verification unit, the technical unit and the review unit shall facilitate
the conduct of faceless assessment; and
( b )   the assessment unit shall—
( i )   make the assessment of the total income or loss by an order in
writing after taking into account all relevant material which it
has gathered and after giving the assessee an opportunity of being
heard, and may also initiate penalty proceedings, if any;
( ii )   determine the sum payable by the assessee or refund of any amount
due to him on the basis of such assessment.
(5) For the purposes of this section, the terms “assessment unit”, “verification unit”,
“technical unit” and “review unit” shall refer to an Assessing Officer having powers
so assigned by the Board.
(6) The assessment unit, verification unit, technical unit and the review unit shall
have the following authorities:—
( a )   Additional Commissioner or Additional Director or Joint Commissioner
or Joint Director, as the case may be;
( b )   Deputy Commissioner or Deputy Director or Assistant Commissioner or
Assistant Director, or Income-tax Officer, as the case may be;
( c )   such other income-tax authority, ministerial staff, executive or consultant,
as may be considered necessary by the Board.
(7) All communications, save as otherwise provided in sub-section (8),—
( a )   among the assessment unit, review unit, verification unit or technical
unit or with the assessee or any other person with respect to the informa -
tion or documents or evidence or any other details, as may be necessary
for the purposes of making a faceless assessment shall be through the
National Faceless Assessment Centre;
( b )   between the National Faceless Assessment Centre and the assessee, or
his authorised representative, or any other person shall be exchanged
exclusively by electronic mode; and
( c )   between the National Faceless Assessment Centre and various units shall
be exchanged exclusively by electronic mode.
(8) The provisions of sub-section (7) shall not apply to the enquiry or verification
conducted by the verification unit in the circumstances as specified by the Board
in this behalf.
(9) The Principal Chief Commissioner or the Principal Director General, as the case
may be, in-charge of the National Faceless Assessment Centre shall, in accordance
with the procedure laid down by the Board in this regard, if he considers appropriate
that the provisions of section 268(5) may be invoked in the case,—
( a )   forward any reference received from an assessment unit in this regard to
the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner having jurisdiction over such case, and
inform the assessment unit accordingly;

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SOURCE PDF PAGE 365
( b )   transfer the case to the Assessing Officer having jurisdiction over such
case as per sub-section (12).
(10) Where a reference has been received by the Principal Chief Commissioner or
Chief Commissioner or Principal Commissioner or Commissioner under sub-sec -
tion (9)( a ), he shall direct the Assessing Officer, having jurisdiction over the case,
to invoke the provisions of section 268(5).
(11) Where a reference has not been forwarded as per sub-section (9)( a ) to the Prin -
cipal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner, having jurisdiction over the case, the assessment unit shall proceed
to complete the assessment as per the procedure laid down in this section.
(12) Irrespective of anything contained in sub-section (1) or (2), the Principal Chief
Commissioner or the Principal Director General, as the case may be, in charge of
National Faceless Assessment Centre may, at any stage of the assessment, if con -
sidered necessary, transfer the case to the Assessing Officer having jurisdiction over
such case, with the prior approval of the Board.
(13) For the purposes of this section,—
( a )   “designated portal” means the web portal designated as such by the Prin -
cipal Chief Commissioner or the Principal Director General, in charge
of the National Faceless Assessment Centre;
( b )   “faceless assessment” means the assessment proceedings conducted
electronically in “e-Proceeding” facility through registered account of
the assessee in designated portal; and
( c )   “registered account” of the assessee means the electronic filing account
registered by the assessee in designated portal.
Reference to Principal Commissioner or Commissioner in certain cases.
274.   (1) The Assessing Officer may make a reference to the Principal Commissi-
oner or Commissioner at any stage of the assessment or reassessment pro -
ceedings before him, if, having regard to the material and evidence available with
him, he considers that it is necessary to—
( a )   declare an arrangement as an impermissible avoidance arrangement;
and
( b )   determine the consequence of such an arrangement within the meaning
of Chapter XI.
(2) The Principal Commissioner or Commissioner shall, on receipt of a reference
under sub-section (1), if he is of the opinion that the provisions of Chapter XI are
required to be invoked,—
( a )   issue a notice to the assessee, setting out the reasons and basis of such
opinion, for submitting objections, if any; and
( b )   provide an opportunity of being heard to the assessee within such period,
not exceeding sixty days, as specified in the said notice.
(3) If the assessee fails to furnish any objection to the notice within the time spec -
ified in such notice issued under sub-section (2), the Principal Commissioner or