Notice under section 142 of Income tax Act

Enquiry before assessment under section 142

Hello friends if you are filing income tax return then you must be know about Section 142 of Income Tax Act, and when Income Tax Department send your Tax Notice under Section 142(1) which is Enquiry notice before assessment.



Issuance of notice under section 142(1)

The assessing officer may issue notice requiring any person to furnish return of income in case such person has failed to file return within the time allowed before the end of relevant assessment year or for production of account or documents or for furnishing of requisite information

However, the assessing officer can not require to the production of any account relating to period more than 3 year period to the previous year.

However, previous approval of joint commissioner is required, before assessing officer require the assessee to furnish a statement of all Assets and liability not included in the accounts.



Assessing officer has power to make necessary enquiry for making assessment section 142(2)

The assessee shall have given opportunity of being heard in respect of any material gathered on the basis of any inquiry supposed to be utilized for the purpose of assessment. (except where the assessment is made under section 144).



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Special audit under section 142(2A)

If, at any stage of the proceedings before him, the assessing officer, having regard to the nature and complexity of the account or volume of the accounts, or doubt about the correctness of account or multiplicity of transaction in the account or specialised nature of business activity of the assessee, and the interest of the revenue is of the opinion that it is necessary so to do,  he may, direct the assessee  to get the account audited under section. Previous approval of Principal CCIT or CCIT / Principal CIT or CIT is required . Account are to be audited by CA, nominated by the Principal CCIT or CCIT / Principal CIT or CIT.  Opportunity of being heard to be given to the assessee before directing such audit.

Account to be audited even if already audited

Audit report to be furnished within prescribed time limit. Total period including extension cannot exceed 180 days. Expenses of audit shall be determined by Principal CCIT or CCIT and paid by the Central Government. Assessee shall be given opportunity of being heard in respect of material gathered through such Audit and proposed to be utilized for his assessment. (except assessment under section 144).

Penalty and prosecution
Assessee shall be liable to penalty of 10000 rupees. If the person will fulfill to comply with a direction issued to him under section 142(2A), he shall be punishable with rigorous imprisonment for a term which may extend to one year and with fine.


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Estimate by valuation officer in certain cases (section 142A)

(1)  Estimation on basis of best judgement on non cooperation of the assessee: The valuation officer may estimate the value of the assets, property or investment to the best of judgement, if the assessee does not co-operate or comply with his directions.

(2)  Reference by assessing officer to valuation officer: May make reference for the purpose of assessment or reassessment to estimate the value including fair market value of any assets property or investment and submit a copy of report to him.

(3)  Estimation of value after giving assessee and opportunity of being heard: Only after taking into account such evidence as assessee main produced and any other evidence in his possession gathered, after giving opportunity of being heard.

(4)  Power of valuation officer: The valuation officer, on a reference made, shall for the purpose of estimating the value of the assets, property or investment, have all the power that he has under section 38 of the wealth tax, act 1957.

(5)  Reference can be made even without rejection of account by assessing officer.

(6)  Valuation report to be sent to assessee and assessing officer within 6 month from end of month of reference.

(7)  Assessing officer complete assessment after considering search report and after giving assessee and opportunity of being heard.
Notice under section 142 of Income tax Act Notice under section 142 of Income tax Act Reviewed by Unknown on August 28, 2018 Rating: 5

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