Section 143 and 144 of Income Tax Act, 1961 - Assessment and Best Judgment Assessment

Sections 143 and 144 of the Income Tax Act, 1961 deal with assessment proceedings after filing of income tax returns. Section 143 provides for processing of returns and scrutiny assessment, while Section 144 provides for best judgment assessment in specified cases.

Section 143 - Assessment

Section 143 provides the procedure for assessment of income after a return is furnished under Section 139 or in response to notice under Section 142(1).

• Section 143(1): Processing of return and computation of tax, interest, fee, refund or demand after permissible adjustments.
• Section 143(2): Scrutiny notice may be issued where the Assessing Officer considers examination necessary to verify correctness of income, loss or tax computation.
• Section 143(3): After considering evidence and material available, the Assessing Officer passes an assessment order determining total income or loss.
• Section 143(3A): Provides for schemes for improving efficiency, transparency and accountability in assessment proceedings.

Faceless Assessment

The Income Tax Act provides for technology-based assessment procedures to reduce physical interface, improve transparency and enable team-based assessment through prescribed schemes.

Section 144 - Best Judgment Assessment

Section 144 applies where the Assessing Officer makes an assessment to the best of judgment in cases such as:

• Failure to file a required return of income.
• Failure to comply with notice under Section 142(1).
• Failure to comply with notice issued under Section 143(2).
• Failure to comply with audit directions under Section 142(2A).

Before completing a best judgment assessment, the Assessing Officer generally considers relevant material available and provides an opportunity of being heard as required under the Act.

Difference Between Section 143 and Section 144