Practical aspects of
Assessment Proceedings
30th January, 2013, ICAI, Ahmedabad.
Tushar P. Hemani,
Advocate, High Court
1 Scheme of Assessment
Tushar Hemani, Advocate 2 Types of Assessment
• Section 143 of the Income-tax Act, 1961 dealing with
“Assessment” provides for two types of Assessment:
a) Summary Assessment [S.143(1)]
b) Scrutiny Assessment [S.143(3)]
• Summary Assessment [S.143(1)]:
In “Summary Assessment”, an “Intimation” u/s 143(1)
is sent to an assessee determining the amount of tax
payable or refund due on total income computed after
making prima facie, mostly arithmetical, adjustments (if
need be) to the total income declared in the return filed
by an assessee.
Tushar Hemani, Advocate 3 S.143(1)
• No such intimation shall be sent after expiry of one year
from the end of the financial year in which such return
is filed.
• In case where no amount of tax stands payable or
refundable and no adjustments have been made,
acknowledgment of return shall be deemed to be an
“Intimation” u/s 143(1).
Tushar Hemani, Advocate 4 S.143(3)
• Scrutiny Assessment [S.143(3)]:
• In “Scrutiny Assessment”, AO makes a detailed inquiry
and finally passes an Asst. Order unlike “Summary
Assessment” where there is no room for any inquiries.
• The procedure begins with a Notice u/s 143(2) which
needs to be “Served” on an assessee prior to expiry of
six months from the end of the financial year in which
the return is furnished. Assessment framed u/s 143(3)
without serving notice u/s 143(2) shall be void-abinitio.
• It is followed by a notice u/s 142(1) calling for various
information by AO for carrying out the assessment.
Tushar Hemani, Advocate 5 S.143(3)
• AO shall consider all the information furnished by an
assessee at the assessment stage in response to his
notices or queries raised vide order sheet entries.
• AO shall issue a Show Cause Notice (SCN) intimating
the assessee about the additions which he proposes to
make in the assessee’s case.
• Assessee shall furnish a reply in response to such SCN
which shall be considered by AO prior to making the
additions.
• AO must ensure that Principles of Natural Justice are
not violated throughout the assessment proceedings.
• Finally, an Asst Order shall be passed u/s 143(3). Such
Asst. Order must be a “Speaking Order”.
Tushar Hemani, Advocate 6 S.144
• Best Judgment Assessment [S.144]:
• Best Judgment Assessment means an assessment
framed by AO on the basis of information available on
records. It is an outcome of complete non co-operation
at the assessee’s end.
• Such an assessment is framed if an assessee –
a) fails to furnish a return u/s 139(1) or 139(4) or,
b) fails to comply with notices issued u/s 142(1) or
142(2A) or 143(2).
• Principles of Natural Justice must be followed by AO.
• Computation of income must be on rational & scientific
basis and the same must be specified in the Order.
• AO must pass a “Speaking Order”.
Tushar Hemani, Advocate 7 S.144A – Power of JCIT to issue
directions in certain cases
• JCIT may call for and examine the records of any
pending assessment proceedings and if he considers
that, having regard to nature of case or the amount
involved or for any other reason, it is necessary or
expedient to do so, he may issue directions to AO to
enable him to complete the assessment. Such directions
can be issued either –
a)
b)
c)
On his own motion; or
On a reference being made to him by AO; or
On an application by assessee
Tushar Hemani, Advocate 8 S.144A – Power of JCIT to issue
directions in certain cases
• Directions prejudicial to the interest of an assessee
shall not be issued without affording the assessee an
opportunity of being heard.
• Any direction as to the lines on which an investigation
connected with the assessment should be made shall
not be deemed to be a direction prejudicial to the
assessee.
Tushar Hemani, Advocate 9 S.144BA – Reference to CIT
• If AO, at any stage of assessment or re-assessment,
considers that it is necessary to declare an arrangement
as an impermissible avoidance agreement and to
determine the consequence of such an arrangement
within the meaning of Chapter X-A, then he may make
a reference to CIT.
• If CIT is of the opinion that provisions of Chapter X-A
need to be invoked, he shall issue a notice to assessee
for submitting objections and providing him an
opportunity of being heard within period specified in the
notice not exceeding 60 days.
• If assessee doesn’t furnish any objection, CIT shall
issue such directions as he deems fit.
Tushar Hemani, Advocate 10 S.144BA – Reference to CIT
• If assessee objects and CIT is satisfied that provisions of
Chapter X-A are not to be invoked, he shall
communicate the same to AO by an order in writing
with a copy to assessee.
• If assessee objects and CIT is not satisfied with the
same, CIT shall make a reference to “Approving Panel”.
• The “Approving Panel” shall issue such directions as it
deems fit in respect of declaration of arrangement as an
impermissible avoidance arrangement and also specify
the previous year/years to which the same shall apply.
Tushar Hemani, Advocate 11 S.144BA – Reference to CIT • The “Approving Panel” may, prior to issuing such
directions:
a) Direct CIT to make further inquiry and furnish a
report; or
b) Call for any records and examine the same; or
c) Require the assessee to furnish certain
documents
• If there is difference of opinion among the members of
“Approving Panel”, the point shall be decided according
to the opinion of majority of members.
• Directions issued by the Approving Panel shall be
binding on AO.
Tushar Hemani, Advocate 12 S.144BA – Reference to CIT
• If any direction specifies that provisions of GAAR shall
apply to specific previous year, then AO in not required
to seek fresh direction on the said issue while framing
assessment or re-assessment for relevant Asst. Year.
• AO shall not pass any order of assessment or reassessment without prior approval of CIT if the tax
consequences have been under the provisions of GAAR.
• No direction shall be issued by the “Approving Panel”
after the expiry of six months from the end of the month
in which reference from CIT was received.
• The Board may make rules for the efficient functioning
of the Approving Panel and expeditious disposal of
references made by CIT.
Tushar Hemani, Advocate 13 S.144C – Reference to DRP
• AO shall forward a “Draft Assessment Order” to the
“Eligible assessee” if he proposes to make any variation
in returned income or loss which is prejudicial to the
interest of such assessee.
• Assessee shall, within 30 days of receipt of such order,a) file his acceptance of such variations to AO; or
b) file his objections, if any, to such variations with(i) DRP (Dispute Resolution Panel) and
(ii) Assessing Officer
• AO shall complete the assessment on the basis of such
draft order, ifa) assessee intimates acceptance of the variation or
b) no objections are received within 30 days.
Tushar Hemani, Advocate 14 S.144C – Reference to DRP • AO shall pass an Asst. Order within 1 month from the
end of the month in which, a) The acceptance is received; or
b) The period of filing objections expires.
• In case objections are received, DRP shall issue
directions for guidance of AO to complete the
assessment.
• DRP may, before issuing any such directions, make
further enquiry or cause further enquiry to be made by
income-tax authorities.
Tushar Hemani, Advocate 15 S.144C – Reference to DRP • DRP may confirm, reduce or enhance the variations
proposed in the draft order.
• If there is difference of opinion among the members of
DRP, the point shall be decided according to the opinion
of majority of members.
• Every such direction shall be binding on AO.
• No such directions shall be issued unless an
opportunity of being heard is given to the assessee and
AO if the same are prejudicial to the interest of the
assessee or the Revenue respectively.
Tushar Hemani, Advocate 16 S.144C – Reference to DRP • No such direction shall be issued after 9 months from
end of the month in which draft order is forwarded to
the assessee.
• Upon receipt of such directions, AO shall complete the
assessment in conformity with such directions within
one month from the end of the month in which such
direction is received without providing any further
opportunity of being heard to the assessee.
• Board may make rules for efficient functioning of DRP
and for expeditious disposal of objections.
Tushar Hemani, Advocate 17 S.144C – Reference to DRP • Provisions of this section shall not apply to any
assessment or re-assessment order passed by AO with
prior approval of CIT u/s 144BA(12).
• For the purpose of S.144C, “Eligible assessee” means –
a) Person in whose case variation arises consequent
to order of TPO passed u/s 92CA(3)
b) Any foreign company
Tushar Hemani, Advocate 18 Other Powers
Other ancillary powers of AO
while framing the Assessment
Tushar Hemani, Advocate 19 S.131/133(6)
• As per S.131(1), AO may issue “Summons” to any
person for discovery and inspection, enforcing
attendance and for compelling production of books
of accounts.
• As per S.131(3), AO may impound and retain books
of accounts or any other document produced
before him during the assessment proceedings.
• As per S.133(6), AO may call for information from
third parties.
Tushar Hemani, Advocate 20 S.142(2A)/142A
• As per S.142(2A), AO may, with the previous
approval of CCIT or CIT, direct an assessee to get
the accounts audited by an accountant and
furnish a report of such audit within time specified
by AO (not exceeding 180 days in aggregate). Cost
of such Special audit shall be borne by Central
Government.
• As per S.142A, AO may make a reference to
“Valuation Officer” for estimating “Value” of any
investment referred to u/s 69, 69A or 69B or for
estimating “Fair Market Value” of any property
referred in S.56(2) and report the same to him.
Tushar Hemani, Advocate 21 Useful Basic Principles Tushar Hemani, Advocate 22 Principle of Natural Justice
• All evidences / materials - copy to
Assessee
• Right of rebuttal
• Third party evidence
• Full access to assessment file
• Examination and cross-examination of
a witness.
• Affidavits
Tushar Hemani, Advocate 23 Even shifting burden of Proof
• Generally, the initial burden of proof is
on the Assessee. However, once basic
evidences/materials are placed on record
and primary onus is discharged, the
burden shifts to AO.
• AO to examine and scrutinise the
evidences to prove them incorrect,
unsupported, false or unbelievable. Then
the burden again shift to Assessee. Tushar Hemani, Advocate 24 Commercial expediency of Expenditure
• It is an assessee who is the best judge to decide as
to which expenditure is to be incurred for the
purpose
of
business/profession,
in
what
circumstances and in what quantum. In short
propriety of expenditure cannot be challenged
by the department.
• 223 ITR 101 (SC)
• 207 ITR 427 (Guj)
• 84 ITR 508 (Guj)
Tushar Hemani, Advocate 25 Commercial expediency of Expenditure • Commercial expediency is to be judged
from the viewpoint of a prudent
businessman/professional and not from
the viewpoint of AO.
• No expenditure can be considered
excessive by merely comparing it with
the preceding year’s expenditure or some
other assessee.
• Necessacity of expenditure also cannot
be questioned or probed.
Tushar Hemani, Advocate 26 Evidences and Materials used in
Assessment proceedings
• In the assessment proceedings both the evidences
and materials can be used.
• Section 3 of the India Evidence Act defines
Evidence to mean and include all statements oral
or in writing and all documents.
• Therefore, all the evidences in the form of
statements, affidavits and declarations can be
adduced as evidence.
• Material on the other hand includes explanations,
submissions,
contentions,
claims,
details,
information, statements, affidavits, books of
account, documents, record etc.
Tushar Hemani, Advocate 27 Protective Assessment
• The Income-tax Act, 1961 doesn’t prescribe any specific
provision regarding “Protective assessment”. It is an
outcome of various judicial pronouncements.
• If “Substantive assessment” is not made, then
“Protective
assessment”
becomes
substantive
assessment.
• AO cannot make any recovery from an assessee in
whose case protective assessment has been framed.
• Such a concept is restricted to assessment proceedings
only. Penalty order cannot be passed on protective
basis.
Tushar Hemani, Advocate 28 Fresh claims
• Assessee can make fresh claims before “AO” only by
way of furnishing “Revised return”. No fresh claims
shall be entertained by AO at the assessment stage
[Goetze (India) Ltd. vs. CIT – 284 ITR 323 (SC)].
• Hence, if an assessee fails to make any claim at the
time of furnishing original return, he must file a revised
return u/s 139(5).
• The aforesaid decision of the Hon’ble Apex Court does
not put any restriction on the powers of “Appellate
Authorities” to admit such fresh claims.
Tushar Hemani, Advocate 29 Certificate for claiming
deduction/exemption
• Certain deductions/exemptions require prescribed
certificate to be filed along with return of income.
However, such a requirement is merely a technical one.
Even if such certificate is furnished during the
assessment proceedings, then deduction/exemptions
cannot be denied in the count that such certificate was
not filed along with return.
Tushar Hemani, Advocate 30 Typical issues arising at
the Stage of Assessment
Tushar Hemani, Advocate 31 Rejection of books of accounts and
Estimation of Gross Profit
• If AO is not satisfied about correctness or completeness
of books or where “Method of accounting” as provided
u/s 145(1) or “Accounting Standards” as notified u/s
145(2) have not been regularly followed, AO may reject
the books as per S.145(3) & estimate assessee’s income.
• As per S.2(12A) “Books or Books of Accounts” includes
ledgers, day-books, cash books, account-books and
other books whether kept as hard copy or soft copy.
• Loose papers or sheets are not books of accounts – CBI
vs V C Shukla [AIR 1998 1406].
• S.44AA mandates maintenance of certain books of
accounts for persons carrying on profession or business
in a particular manner.
Tushar Hemani, Advocate 32 S.145 • Books cannot be rejected unless any specific defects in
the books are pointed out.
• Unless books of accounts are rejected, no addition can
be made by estimating assessee’s income.
• Mere fall in GP rate cannot be the sole ground for
rejection of books. Assessee must explain reasons for
fall in GP rate to AO.
• 72 TTJ 886 (Ahd)
• 69 TTJ 585 (Pat)
• 66 TTJ 722 (Jodh)
• 120 Taxman 85 (Ahd) (Mag)
Tushar Hemani, Advocate 33 S.145 • Mere non-maintenance of “Day to day stock register”
cannot be a ground for rejection of books if overall
quantitative details are furnished before AO.
• CIT vs. Smt. Poonam Rai – 326 ITR 223 (Delhi)
• ITO vs. Mansi Prints Pvt. Ltd. – ITA Nos.498 &
872/Ahd/2009
• In case books of accounts are rejected, AO must adopt
some scientific and reasonable basis for estimating GP.
• If GP rate has improved as compared to last two years
and GP rate of last two years has been accepted by AO
in the past, no GP addition is called for.
Tushar Hemani, Advocate 34 S.145 • When the assessee maintains Departmental books of
accounts, books can be rejected qua one without
affecting the results of other departments:
• 6 ITR 255 @ 263 (Nag)
• 9 ITR 81 (All)
• Once books of accounts are rejected and income has
been estimated, no further addition/disallowance
affecting business income can be made separately:
• [2009] 177 TAXMAN 450 (DELHI)
• 270 ITR 314 (MP)
• 148 CTR 533 (All) = 229 ITR 229
Tushar Hemani, Advocate 35 S.145 • Can the books of accounts be rejected on the basis
of immaterial or trivial mistakes:
•
•
•
•
76
86
75
65
ITR 719 (SC)
ITR 673 (All)
ITR 260 (Bom)
ITD 460 (Jaipur)
• Accounts cannot be rejected on suspicion and
conjecture:
• 72 ITD 139 (Asr) (SB)
Tushar Hemani, Advocate 36 S.145A – Method of accounting
in certain cases
• ICAI has suggested “Exclusive method” whereas S.145A
requires an assessee to follow “Inclusive method”.
• Both the methods are Revenue neutral since even if
adjustments are made as per S.145A, there is no
impact on the figure of profit/loss.
• Auditor must give a Reconciliation in the Tax Audit
Report and demonstrate the fact that both the methods
are revenue neutral.
• However, AO makes adjustment only to the figure of
closing stock so as to make addition.
Tushar Hemani, Advocate 37 Valuation of Closing Stock
• Closing stock must be valued at “Cost” or “Market
value” whichever is less.
• Closing stock cannot be valued at Market value if the
same is higher than cost [Sanjeev Woolen Mills vs.
CIT – 279 ITR 434 (SC)].
• If value of closing stock is disturbed in any year, then
corresponding adjustment in the value of opening stock
of next year should be given.
Tushar Hemani, Advocate 38 S.68 – Unexplained Cash Credits
• Assessee must prove the Identity and Creditworthiness
of lenders as well as Genuineness of the transaction by
furnishing the followings of the lenders:
a) Confirmation
b) Name, address & PAN
c) Acknowledgement of ITR
d) Statement of Total Income
e) Bank Statement
f) Balance-sheet
• If possible, assessee must state his inability to produce
the lenders and request AO to issue summons.
• Source of source need not to be proved by the assessee.
• Once the aforesaid details are furnished, burden on the
assessee is discharged and onus shifts on the Revenue.
Tushar Hemani, Advocate 39 S.41(1) – Remission/Cessation of Liability
• Provisions of S.41(1) shall apply in the year in which
there is remission/cessation of a liability and not in the
year in which the same was incurred.
• Addition u/s 41(1) cannot be made in respect of
Creditors unless the same are written-off in books of
accounts even if the same are out-standing for a long
period [CIT vs. Miraa Processors Pvt. Ltd. – (2012) 22
taxmann.com 120 (Guj)].
• Principle of expiry of period of limitation as prescribed
under the Limitation Act cannot extinguish the debt but
it will only prevent the creditor from enforcing the debt.
No addition can be made u/s 41(1) on that count also.
Tushar Hemani, Advocate 40 S.40A(2) – Payment to Related Parties
• S.40A(2) shall apply only in case of excessive or
unreasonable “payments” to related parties. It won’t
apply in a case where an assessee charges something
less than fair market value from related parties.
• AO must establish the corresponding fair market value
of the goods, services or facilities prior to making the
said disallowance.
• Reasonableness of payments must be judged from the
viewpoint of an assessee/ prudent businessman and
not from the viewpoint of the AO.
• Disallowance can be made only to the extent of
“Excessive or Unreasonable” payments.
Tushar Hemani, Advocate 41 S.40(a)(ia) – Disallowance of expenditure
for non-deduction or non-payment of TDS
• If any expenditure on which tax is deductible and on
which tax has not been deducted or after deduction, the
same has not been paid on or before due date for
furnishing return of income, then such expenditure be
disallowed by AO.
• Assessee must furnish complete details in respect of
expenditure on which tax was deductible and
compliance with TDS provisions at his end.
• If TDS is deposited till the due date of furnishing
return, then no disallowance u/s 40(a)(ia) is called for.
• In case such TDS provisions are complied with in any
subsequent year, then the corresponding expenditure
shall be allowed as deduction in the said year making
the same revenue neutral.
Tushar Hemani, Advocate 42 S.40(a)(ia) • Disallowance u/s 40(a)(ia) could be
made only of the amount remaining
“payable” at the end of the year and
not of that which had already been
“paid”.
Merilyn Shipping & Transports vs ACIT
[2012] 136 ITD 23 (Vizag) (SB)
Tushar Hemani, Advocate 43 S.40(a)(ia) CIT vs S.K. Tekriwal [ITAT No.183 of 2012,
GA No.2069 of 2012, dated 03/12/2012].
• Section 40(a)(ia ) has two limbs:
– Non-deduction of tax at source
– After deduction, non-payment thereof
into the Govt. treasury
• Shortfall in deduction does not come within
the purview of S.40(a)(ia) of the Act.
Tushar Hemani, Advocate 44 S.40(a)(ia)
• Section 40(a)(ia) falls in chapter (iv) and
under "the head computation of
business income." Any addition proposed
by the Assessing Officer by invoking a
provision falling in chapter (iv) under the
"Head computation of business income,
particularly between section 28 to 43D,
would be made under the "Head income
from business and Profession" and not
under the head "Income from other
sources", unless specifically so provided.
Tushar Hemani, Advocate 45 Difference in Book Stock
and Bank Stock
• When stock is “Hypothecated” [Not “Pledged”] with bank
and credit facilities are availed against the same, at
times, just to avail higher credit facilities, the “Value” of
stock in such stock statement is inflated as compared
to value of stock as per books of accounts. In such a
scenario, no addition can be made in respect of
difference in value of stock provided:
 The stock is inflated in the statement furnished to
the bank to avail larger credit facilities;
 The inflated stock was hypothecated and not
pledged;
 The assessee has maintained stock register;
 The assessee’s books of accounts are not found to be
defective or non-genuine by AO.
Tushar Hemani, Advocate 46 Difference in Book Stock
and Bank Stock • CIT vs. Meico Bonds Pvt. Ltd. (Tax Appeal
No.2041 of 2010 of Gujarat HC)
• CIT vs. Arrow Exim Pvt. Ltd. - 230 CTR 293
(Guj.)
• CIT vs. Veerdip Rollers (P) Ltd. - 323 ITR 341
(Guj.)
• CIT vs. Sheena Exports [2012] 20
taxmann.com 664 (P&H)
• CIT vs. Khan & Sirohi Rolling Mills – 200 CTR
595 (All.)
• CIT vs. N. Swamy - 241 ITR 363 (Mad.)
Tushar Hemani, Advocate 47 S.36(1)(vii) - Bad debts
• As per S.36(1)(vii), the only requirement to claim
deduction in respect of bad-debts is to write-off the said
debts as irrecoverable in the books. It is no longer
required to establish that the debts have actually
become irrecoverable [TRF vs. CIT– 323 ITR 391 (SC)].
• Hence, assessee must establish before AO that the
debts have actually been written off in the books as
irrecoverable so as to claim deduction in respect of the
same as bad debts.
• However, provisions of S.36(2) need to be complied with
prior to claiming the said deduction.
Tushar Hemani, Advocate 48 Income from transactions in shares –
Whether Business Income or Capital Gain
• The followings are few criteria for which need to be
considered while ascertaining as to whether income
from sale of shares is to be taxed as “Business Income”
or “Capital Gain”:
a) Intention at the time of purchase
b) Holding period
c) Frequency of transactions
d) Owned funds or Borrowed funds
e) Volume of transactions
f) No. of scrips
g) Infrastructure
Tushar Hemani, Advocate 49 Business vs Capital Gains
h) Time devoted
i) Treatment in books of accounts
j) Ratio of purchase and sales / holding
k) Utilization of sale proceeds
l) Other occupation
m) Circumstances responsible for sale
n) MOA/AOA
• After taking into consideration the aforesaid parameters
collectively, it can be decided as to whether income from
sale of shares is to be taxed as “Business Income” or
“Capital Gain”.
Tushar Hemani, Advocate 50 Penalties u/s 271(1)(c) and 271(1)(b)
• AO may initiate penalty proceedings u/s 271(1)(c) for
concealment of income or for furnishing inaccurate
particulars of income at the assessment stage.
• At the time of penalty proceedings u/s 271(1)(c),
assessee must establish that there was neither any
concealment of income nor any inaccurate particulars
were furnished. It must be based purely on facts. Citing
judgments must be avoided as far as possible.
• AO may initiate penalty proceedings u/s 271(1)(b) if
assessee fails to comply with notices issued by him. To
avoid the same, assessee must comply with such
notices in time. Adjournments on frivolous grounds
must be avoided.
Tushar Hemani, Advocate 51 Assessment pursuant to
Survey/Search
• No addition can be made merely on the basis of
statement recorded u/s 133A during Survey if no
information or material is found in support of the same.
This is because statement recorded u/s 133A do not
have any evidentiary value.
• If the assessee feels that statement recorded during
survey/search was recorded under coercion or that
whatever has been stated by him was incorrect, then
such statement must be retracted within reasonable
period of time. Such retraction affidavit must also be
placed on records of AO at the earliest possible
opportunity.
Tushar Hemani, Advocate 52 Assessment pursuant to
Survey/Search • Proper explanation must be offered in response to
queries raised by AO as regards seized material or any
other issue.
• All the important facts must be brought on the records
of AO at the assessment stage itself.
• Position as to returns and assessments for earlier years
should be brought on record.
• AO is duty bound to supply to the Assessee copies of all
the materials, documents, loose papers and statements
of the assessee and any third party which may be used
against the assessee.
Tushar Hemani, Advocate 53 Precautions to be taken
by an assessee
vis-a-vis
Rights of an assessee
Tushar Hemani, Advocate 54 Opportunity to examine material
used by AO for making addition
• If AO uses any material against the assessee for making
any addition or disallowance, under the law he is duty
bound to supply a copy of the said material to the
Assessee so that can deal with the same. AO can’t make
any addition or disallowance on basis of any material
without providing an opportunity to the assessee to
rebut the same.
• Opportunity of cross-examining.
• Any other witness can also be summoned at the
instance of Assessee.
Tushar Hemani, Advocate 55 Facts and only facts
• At the assessment stage, an assessee must lay
emphasis on facts and only facts. All the queries raised
by AO must be answered appropriately duly supported
by necessary documentary evidences.
• Assessee must avoid citing unnecessary case-laws at
the assessment stage. If facts of the case are not
properly established at the assessment stage, then ratio
laid down in any judgment can hardly come to
assessee’s rescue.
Tushar Hemani, Advocate 56 Alternate contentions
• Assessee must always raise alternate contentions
wherever possible. This will ensure that if the relief
desired by an assessee is not granted by an AO, then
also there shall remain room for some alternate relief.
• Such alternate contentions must be raised in the
hierarchy of decreasing importance.
• Law keeps evolving. If such alternate contentions are
raised at the assessment stage and the same get
support of ever evolving law in future, assessee’s case
becomes strong at the appellate stage.
Tushar Hemani, Advocate 57 Never concede
• Assessee must never concede any addition which the
AO is looking forward to make. By conceding, the issue
comes to an end. The issue must be kept live with due
precautions.
• Various developments take place in law and the law
also gets amended periodically. Hence, a relief which is
not available in light of the present law might be
available in future. In order to enjoy benefit of such
future development or amendment, it is essential to
keep the issue live by contesting it before the appellate
authorities and later before Courts of law.
Tushar Hemani, Advocate 58 All relevant documentary evidences
must be placed before AO
• All the relevant documentary evidences and material
must be placed before AO at the assessment stage
itself.
• This is essential so as to ensure that when the matter is
carried before the Appellate Authorities, the question of
furnishing “Additional evidences” do not arise.
• However, at the same time, no evidence or material
which may be used against the assessee should be
placed on record without duly considering the
consequences.
Tushar Hemani, Advocate 59 How to avoid 147/263 actions?
• Proper SCN – Insist on show cause
before filing any evidence or material.
• Proper reply dealing with all the
contentions raised in the SCN.
• Proof of investigation and application
of mind by AO should be placed on
record as far as possible.
Tushar Hemani, Advocate 60 Thank You
Tushar Hemani, Advocate 61