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INTRODUCTION
Assessment under the Income Tax Ordinance, 2001 is made on the basis of
returns filed for a tax year. This is termed as Universal Self-Assessment
Scheme (USAS) by the FBR, though no such words are used in the Ordinance.
Various ways of framing the assessment under the Income Tax Ordinance,
2001 are as under:
1. Normal assessment, usually referred to as assessment
2. Best judgment assessment
3. Provisional assessment
4. Provisional assessment in certain cases
1. NORMAL ASSESSMENT
Section 120 of the Ordinance states that:
If a taxpayer has furnished a complete return of income other than a
revised return, the Commissioner shall be treated to have assessed the
income and tax due thereon on the basis of return.
Return shall be taken to be complete if it is in accordance with section
114(2)
Return furnished shall be considered as an assessment order issued by
the Commissioner to the taxpayer on the date it was furnished.
However, in addition to above deemed assessment, the Commissioner
has powers to conduct audit of income tax affairs of a person under
section 177 and all the provisions of that section shall apply
accordingly. Assessment in case of incomplete return
If the return of income furnished is not complete, the Commissioner
shall issue a notice to the taxpayer informing him of the deficiencies
(other than incorrect amount of tax payable on taxable income, as
specified in the return, or short payment of tax payable) and directing
him to provide certain information, particulars, statement or
documents by the date specified in the notice in order to make the
return a complete return.
If a taxpayer fails to fully comply, by the due date, with the
requirements of the notice the return furnished shall be treated as an
invalid return as if it had not been furnished. However, if the taxpayer
fully complies with the requirements of the notice, by the due date, the
iii.
iv.
Basically assessment is an estimation for an amount assessed while paying Income Tax. It is a
compulsory contribution that is required for the support of a government. It is generally of the following
types.
1.Self-assessment
The assesse is required to make a self assessment and pay the tax on the basis of the returns
furnished. Any tax paid by the assessee under self assessment is deemed to have been paid towards
regular assessment.
2.Regular assessment
On the basis of thereturn of income chargeable to tax furnished by the assessee an intimation shall be
sent to the assessee informing him about the tax or interest payable or refundable to him.
3. Income escaping assessment or re-assessment
If the assessing officer has reason to believe that any income chargeable to tax has escaped
assessment for any assessment year assess or reassess such income and also nay other income
chargeable to tax which has escaped assessment and which comes to his notice in course of the
proceedings or any other allowance, as the case may be.
4. Precautionary assessment
Where it is not clear as to who has received the income, the assessing officer can commence
proceedings against the persons to determine the question as to who is responsible to pay the tax.
5. Best judgement assessment
In a best judgement assessment the assessing officer should really base the assessment on his best
judgement i.e. he must not act dishonestly or vindictively or capriciously. There are two types of
judgement assessment :
i.
Compulsory best judgement assessment made by the assessing officer in cases of non-cooperation on the part of the assessee or when the assessee is in default as regards supplying
informations.
ii.
Discretionary best judgement assessment is doen even in cases where the assessing officer is
not satisfied about the correctness or the completeness of the accounts of the assessee or where
no method of accounting has been regularly and consistently employed by the assessee
Judgment is a process of reaching a judicial decision to the best of the reasons.