Section 143:
Assessment.
1,2
(1) Where a return has been made under section 139, or in response to a notice
under sub-section (1) of section 142, such return shall be processed in the following manner, namely:
(a) the total income or loss shall be computed after making the following adjustments, namely:
(i) any arithmetical error in the return; 3
***
(ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;
4
(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is
claimed was furnished beyond the due date specified under sub-section (1) of section 139;
(iv) disallowance of expenditure indicated in the audit report but not taken into account in
computing the total income in the return;
(v) disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB,
80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under
sub-section (1) of section 139; or
(vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been
included in computing the total income in the return:
Provided that no such adjustments shall be made unless an intimation is given to the assessee
of such adjustments either in writing or in electronic mode:
Provided further that the response received from the assessee, if any, shall be considered
before making any adjustment, and in a case where no response is received within thirty days of
the issue of such intimation, such adjustments shall be made;
5
Provided also that no adjustment shall be made under sub-clause (vi) in relation to a return
furnished for the assessment year commencing on or after the 1st day of April, 2018;
(b) the tax 6
, 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 6
, interest and fee, if any, computed under clause (b) by any tax deducted at
source, any tax collected at source, any advance tax paid, any relief allowable under an agreement
under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under
Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax
7
, interest or fee;
(d) an intimation shall be prepared or generated and sent to the assessee specifying the sum
determined to be payable by, or the amount of refund due to, the assessee under clause (c); and
(e) the amount of refund due to the assessee in pursuance of the determination under clause (c)
shall be granted to the assessee:
Provided that 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 7
, interest or fee is payable by, or no refund is due
to, him:
Provided further that no intimation under this sub-section shall be sent after the expiry of one
year from the end of the financial year in which the return is made.
Explanation.For the purposes of this sub-section,
(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;
(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 intimation in a case where no
sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been
made under clause (a).
(1A) 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.
(1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under
sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of
the provisions of this Act relating to processing of returns shall not apply or shall apply with such
exceptions, modifications and adaptations as may be specified in that notification; so, however, that no
direction shall be issued after 8
the 31st day of March, 2012.
(1C) Every notification issued under sub-section (1B), along with the scheme made under
sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of
Parliament.
9
(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be
necessary, where a notice has been issued to the assessee under sub-section (2):
Provided that the provisions of this sub-section shall not apply to any return furnished for the
assessment year commencing on or after the 1st day of April, 2017.
10
(2) Where a return has been furnished under section 139, or in response to a notice under
sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case
may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income
or has not computed excessive loss or 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, either to attend the office of the
Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on
which the assessee may rely in support of the return:
Provided that no notice under this sub-section shall be served on the assessee after the expiry of six
months from the end of the financial year in which the return is furnished.
11
(3) 12
On the day specified in the notice issued under sub-section (2), 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 shall, by an order in writing, make an assessment of the total income or
loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the
basis of such assessment.
13
Provided that in the case of a
(a) 14
research association referred to in clause (21) of section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A) of section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in
sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any
hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10,
which is required to furnish the return of income under sub-section (4C) of section 139, no order making
an assessment of the total income or loss of such 14
research association, news agency, association or
institution or fund or trust or university or other educational institution or any hospital or other medical
institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10,
unless
(i) the Assessing Officer has intimated the Central Government or the prescribed authority the
contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or
sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as
the case may be, by such 14
research association, news agency, association or institution or fund or
trust or university or other educational institution or any hospital or other medical institution, where
in his view such contravention has taken place; and
(ii) the approval granted to such 15
research association or other association 16
or fund or trust or
institution or university or other educational institution or hospital or other medical institution has
been withdrawn or notification issued in respect of such news agency or fund or trust or institution
has been rescinded:
17
Provided further that where the Assessing Officer is satisfied that the activities of the university,
college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35 are
not being carried out in accordance with all or any of the conditions subject to which such university,
college or other institution was approved, he may, after giving a reasonable opportunity of showing
cause against the proposed withdrawal to the concerned university, college or other institution,
recommend to the Central Government to withdraw the approval and that Government may by order,
withdraw the approval and forward a copy of the order to the concerned university, college or other
institution and the Assessing Officer:
18
Provided also that notwithstanding anything contained in the first and the second provisos, no
effect shall be given by the Assessing Officer to the provisions of clause (23C) of section 10 in the
case of a trust or institution for a previous year, if the provisions of the first proviso to clause (15) of
section 2 become applicable in the case of such person in such previous year, whether or not the
approval granted to such trust or institution or notification issued in respect of such trust or institution
has been withdrawn or rescinded.
19
(3A) The Central Government may make a scheme, by notification in the Official Gazette, for the
purposes of making assessment of total income or loss of the assessee under sub-section (3) so as to
impart greater efficiency, transparency and accountability by
(a) eliminating the interface between the Assessing Officer and the assessee in the course of
proceedings to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional
specialisation;
(c) introducing a team-based assessment with dynamic jurisdiction.
(3B) The Central Government may, for the purpose of giving effect to the scheme made under subsection (3A), by notification in the Official Gazette, direct that any of the provisions of this Act relating to
assessment of total income or loss shall not apply or shall apply with such exceptions, modifications and
adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st
day of March, 2020.
(3C) Every notification issued under sub-section (3A) and sub-section (3B) shall, as soon as may be
after the notification is issued, be laid before each House of Parliament.
20
(4) Where a regular assessment under sub-section (3) of this section or section 144 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.
21
* * * * *
22
* * * * *
Notes:
1. Subs. by Act 4 of 1988, s. 48, for section 143 (w.e.f 1-4-1989).
2. Subs. by Act 18 of 2008, s. 32, for sub-section (1) (w.e.f. 1-4-2008).
3. The word or omitted by Act 28 of 2016, s. 68 (w.e.f. 1-4-2017).
4. Ins. by s. 68, ibid. (w.e.f. 1-4-2017).
5. Ins. by Act 13 of 2018, s. 46 (w.e.f. 1-4-2018).
6. Subs. by Act 7 of 2017, s. 58, for and interest (w.e.f. 1-4-2018).
7. Subs. by s. 58, ibid.,for or interest (w.e.f. 1-4-2018).
8. Subs. by Act 8 of 2011, s. 25, for the 31st day March, 2011 (w.e.f. 1-4-2011).
9. Subs. by Act 7 of 2017, s. 58, for sub-section (ID) (w.e.f. 1-4-2018).
10. Subs. by Act 28 of 2016, s. 68, for sub-section (2) (w.e.f. 1-6-2016).
11. Subs. by Act 20 of 2002, s. 60, for sub-section (3) (w.e.f. 1-6-2002).
12. Subs. by Act 7 of 2017, s. 58, for certain words (w.e.f. 1-6-2016).
13. Ins. by Act 20 of 2002, s. 60 (w.e.f. 1-4-2003).
14. Subs. by Act 14 of 2010, s. 34, for scientific research association (w.e.f. 1-4-2011).
15. Subs. by Act 14 of 2010, s. 34, for scientific research association (w.e.f. 1-4-2011).
16. Ins. by Act 22 of 2007, s. 47 (w.e.f. 1-6-2007).
17. Ins. by Act 29 of 2006, s. 13 (w.e.f. 1-4-2006).
18. Ins. by Act 23 of 2012 s. 61 (w.e.f. 1-4-2009).
19. Ins. by Act 13 of 2018, s. 46 (w.e.f. 1-4-2018).
20. Ins. by Act 36 of 1989, s. 16 (w.e.f. 1-4-1989).
21. Sub-section (5) omitted by Act 27 of 1999, s. 64 (w.e.f. 1-6-1999).
22. The Explanation omitted by s. 64, ibid (w.e.f. 1-6-1999).