Tax Returns And Assessment Of Income Universal Self Assessment Scheme Lec2-Taxation Managment-Lecture Notes, Study notes of Business Taxation and Tax Management

Download Tax Returns And Assessment Of Income Universal Self Assessment Scheme Lec2-Taxation Managment-Lecture Notes and more Study notes Business Taxation and Tax Management in PDF only on Docsity! LESSON 15.41 TAX RETURNS & ASSESSMENT OF INCOME UNIVERSAL SELF ASSESSMENT SCHEME Assessments Process whereby claims of taxpayers are verified by tax authorities and taxable income & tax thereon is determined according to the ordinance. Ways of Framing Assessment under Normal Tax Regime 1. Normal Assessment/ USAS 2. Provisional Assessment 3. Best Judgment Assessment 1. Normal Assessment/Universal Self assessment Scheme (Sec. 120) Where complete return furnished by taxpayer: (Other than revised return u/s 114(6) which can be submitted within five years of original return)  The commissioner shall be taken to have made an assessment of taxable income for tax year and tax thereon, equal to amount as specified in the return.  Return shall be taken as Assessment Order by the commissioner. Return shall be taken as complete if in accordance with Sec. 114(2) (a) If return is incomplete, notice by CIT to rectify omissions, deficiencies by due date (However, errors pertaining to taxable income and tax payable not rectifiable under this section) (b) If reply not submitted by due date incomplete return submitted shall be treated as invalid Return. (c) Return submitted shall be treated as complete, if tax payer complied with requirements of notice under Sub. Sec. (3) (d) No notice u/s 120(3) after expiration of one year. (Return & Assessment attains finality after expiration of one year) Best Judgment Assessment Sec. 121 (1) where a person: (a) Fails to furnish a return u/s 114(3) or 114(4) (b) Fails to furnish return u/s 143 or 144 (c) (Return to be filed by non-resident Air Carriers or Shipping Companies) (d) Fails to furnish return u/s 116 (Wealth Statement on notice by CIT or where income is rupees 500,000/ and above.) (e) Fails to furnish documents u/s 174 (prescribed documents) Assessment Order by Commissioner Shall state the following details: Taxable Income Tax Due Amount of Tax Paid Tax Payable Time, place & manner of appealing the assessment order. Amendment of Assessments (Sec 122) Amendments shall be made when the commissioner is satisfied on the basis of definite information that: Any income chargeable to tax has escaped assessment; or Total income has been under-assessed, or assessed at too low a rate, or has been the subject of excessive relief or refund; or Any amount under a head of income has been misclassified. Revision by the Commissioner Sec 122 A The commissioner shall not revised any order, if a. An appeal against the order lies to the commissioner (Appeals) or to the appellate tribunal, the time within which such appeal may be made has not expired; or b. The order is pending in appeal before the commissioner (appeals) or has been made the subject of appeal to the appellate tribunal. docsity.com Revision can be made by RCIT at his own or on an application made by the tax payer relating to issuance of an exemption or lower rate certificate with regard to collection or deduction of tax at source. 2. Provisional Assessment (Sec. 123) Sec. 123(1) Where, Concealed assets impounded by any department, agency of federal or provincial govt. the commissioner may issue to the person a provisional assessment order or provisional amended assessment order, as the case may be, for the last completed tax year of the person taking into account the concealed asset. Concealed asset means any property or asset acquired from any income subject to tax, in the opinion of CIT. Assessment giving effect to an order Sec. 124 Special Provisions with respect to Assessment Sec. 125 In relation to disputed properties assessment within one year from the date of decision by court. Sec. 126 Evidence of Assessment: Production of assessment order or certified copy thereof shall be conclusive evidence.  An assessment order may not deem void, void able for want of form, hence not to be quashed.  An order may not be affected by reason of any mistake, defect or omission therein, if in substance & effect in conformity with the ordinance. Sec. 124-A modification of an Order by Commissioner •CIT shall follow a decision on a question of law by H.C or ITAT even in cases where appeal has been filed. On reversal CIT shall modify order. •Sec. 124: Assessment to give effect to an order of CIT (A), ITAT, High Court, Supreme Court. 3. Self Assessment Scheme Salient features of Universal Self Assessment Scheme 1) Scope of the scheme: Section 120 (1) (2): (1)Where a taxpayer has furnished a complete return of income (other than a revised return under sub-section (6) of section 114) for a tax year ending or after the 1st day of July, 2002 (a) the commissioner shall be taken to have made an assessment of taxable income for that tax year, and the tax due thereon, equal to those respective amounts specified in the return; and scheme. (b) The return shall be taken for all purposes of this Ordinance to be an assessment order issued to the taxpayer by the Commissioner on the day the return was furnished. (2) A return of income shall be taken to be complete if it is in accordance with the provisions of sub- section (2) of section 114. (Prescribed Form, Relevant particulars & Signed) Section 114 (2)  A return of income: (a) Shall be in the prescribed form and shall be accompanied by such annexure statements or documents as may be prescribed; (b) Shall fully state all the relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayers; (c) Shall be signed by the person, being an individual, or the person’s representatives where section 172 applies. 2) Requirements of a Return Rule 34 sub-rule (2), (3) and (4): (1)a return of income as required to be furnished under section 114 shall be in the form specified in (a) Part-i (for companies); (b)Part-ii (for non- salaried individuals and association of persons) (c) Part-iii A (for salaried individuals having other sources of income etc, as attachment to employer’s certificate in lieu of return of income); of the Second Schedule to these rules (2) A return of income shall be verified in the manner specified in the form docsity.com