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Showing posts from September, 2017

Blog # 18. Protective Assessment Under Income Tax Act, 1961

In the Income Tax Act, 1961 (the Act), there is provision to make only ‘regular assessment’. As per section 2(40) of the Act, ‘regular assessment’ means the assessment made under section 143(3) or section 144. Again as per section 2(8) of the Act, ‘assessment’ includes reassessment; therefore, assessment made under section 143(3)/144/147 is also a ‘regular assessment’. Protective assessment is said to those assessments which are made to ‘protect’ the interest of the revenue. Now the question is whether there is any provision of ‘protective assessment’ in the Act. The answer is that there is no such provision in the Act. Then how can an Assessing Officer (AO) make such assessment and how is it tenable in the law? The AO is not to execute the Act alone; he is required to execute the Income tax law in its entirety. Income tax law includes i) the Act, ii) the Income tax Rules, 1962, iii) the circulars issued by the CBDT or other competent authority, iv) the instructions issued by the CBD…