Accelerated assessment is a process in income tax that enables the tax authorities to complete the assessment of an assessee’s tax liability in a shorter time frame. It is primarily designed to reduce the time and resources required to complete the assessment process. In this blog, we will explain the accelerated assessment process in income tax in detail.
Under the regular assessment process, the tax authorities have to follow several steps, such as issuing notices, gathering evidence, conducting enquiries, and scrutinizing returns. These steps take considerable time and effort, leading to delays in the assessment process. In contrast, under the accelerated assessment process, the tax authorities are allowed to skip some of these steps and complete the assessment in a shorter time frame.
The accelerated assessment process is applicable to specific categories of taxpayers, such as companies and non-residents. It is also applicable to cases where the assessee has already filed returns and paid taxes but has failed to respond to the notices issued by the tax authorities.
The process of accelerated assessment typically involves the following steps:
Step 1: Issue notice under section 143(2)
The tax authorities will issue a notice under section 143(2) of the Income Tax Act, 1961, to the assessee, asking them to furnish the required information and documents within a specified time frame.
Step 2: Submission of information and documents
The assessee must furnish the information and documents requested in the notice within the specified time frame. The information and documents may include details of income, expenses, investments, assets, liabilities, and other relevant information.
Step 3: Assessment by the tax authorities
Based on the information and documents submitted by the assessee, the tax authorities will assess the tax liability of the assessee. The assessment will be completed in a shorter time frame as compared to the regular assessment process.
Step 4: Issuance of assessment order
Once the assessment is completed, the tax authorities will issue an assessment order under section 143(3) of the Income Tax Act, 1961. The order will specify the amount of tax liability, along with interest and penalties, if applicable.
Step 5: Appeal
If the assessee is not satisfied with the assessment order, they can file an appeal with the Commissioner of Income Tax (Appeals) within 30 days of receiving the order.
The accelerated assessment process has several advantages for both the tax authorities and the taxpayers. For the tax authorities, it reduces the time and resources required to complete the assessment process, allowing them to focus on other important tasks. For the taxpayers, it reduces the compliance burden and enables them to resolve tax disputes quickly.
In conclusion :
The accelerated assessment process in income tax is a useful tool for completing the assessment of an assesses tax liability in a shorter time frame. It is primarily designed to reduce the time and resources required to complete the assessment process and is applicable to specific categories of taxpayers. By following the steps outlined above, taxpayers can avail of the benefits of the accelerated assessment process and resolve tax disputes quickly and efficiently