CS Professional · Advanced Direct Tax Laws and Practice

Assessment under the Income-tax Act, 2025: Chapter Guide

Assessment is the process by which the tax authority determines your total income or loss and the tax payable or refundable. Under the Income-tax Act, 2025, many cases are assessed in a faceless manner under section 273, with all communication routed electronically through the National Faceless Assessment Centre. Solve questions by stating the provision, applying the facts, then concluding.

What this chapter covers

This chapter covers how a return becomes a final tax liability. You start with the types of assessment and the processing of returns. Then you move to the faceless assessment scheme under section 273, the notices and communication flow, and the assessee's right to a hearing, appeal and other safeguards.

The core of the chapter is section 273. It lets the Board specify the areas, persons, incomes or cases to be assessed faceless. It sets up the National Faceless Assessment Centre, assessment units, verification units, technical units and review units. It also fixes how these units communicate. Learn who does what, because case questions test exactly this.

The chapter links to the rest of the paper. Income escaping assessment under section 279 connects to faceless assessment through the definition of Assessing Officer in sub-section (3). Appeals under section 359 and the Supreme Court hearing under section 368 connect assessment to dispute resolution. In the exam, you will usually get a short case on a notice, a hearing or an order. You must give the provision, analyse the facts and conclude.

Assessment is where all your computation knowledge turns into a legal outcome, so it is a natural source of case-based questions in a written paper. The rules are procedural and precise: who sends the notice, through which channel, who may hear the case and what the order must contain. Students who know these points exactly can write short, correct answers and score well. Students who only remember the idea of 'faceless' lose marks on details such as the role of each unit. The chapter is also practical for working professionals, since advising a client on a notice or a hearing is a real task.

Assessment: topics in the order to study them

1Types of Assessment and Return ProcessingStart here to see the whole path from return to final order, so the later faceless rules have a place to sit.
2Faceless Assessment Scheme under Section 273This is the core provision. Learn the Centre and the four units, their functions and who staffs them.
3Procedure and Notices in Faceless AssessmentOnce you know the units, study how they communicate: through the National Faceless Assessment Centre, by electronic mode, with the stated exceptions.
4Personal Hearing, Appeals and Safeguards in Faceless AssessmentFinish with the assessee's protections, the transfer of a case to the jurisdictional officer and the appeal route under sections 359 and 368.

How to prepare Assessment

Treat this chapter as a process you can draw, not a list to memorise. Build the flow first, then add the sub-section details.

Read the types of assessment and write one line on each: when it applies and who makes it.
Read section 273 slowly and draw a diagram of the National Faceless Assessment Centre and the assessment, verification, technical and review units, with one function against each.
Learn the communication rule: all communication goes through the Centre, and between the Centre and the assessee it is exchanged exclusively by electronic mode. Note the exception for enquiry or verification by the verification unit in circumstances the Board specifies.
Learn the transfer rules: the reference to the jurisdictional officer under sub-section (9) and the transfer of a case at any stage with the Board's prior approval under sub-section (12).
Study the assessee's safeguards: the opportunity of being heard before the written order, and the appeal hearing and order requirements under section 359.
Link sections 279 and 273: note that for sections 280 and 281, the Assessing Officer excludes the National Faceless Assessment Centre and assessment units.
Practise three or four short case questions. Write each answer in three parts: provision, application to the facts, conclusion.

Common mistakes in Assessment

Mixing up the four units and their functions.
Fix: Make a one-line function for each unit: assessment makes the order, verification enquires, technical advises, review checks variations.
Saying the assessee deals directly with the assessment unit.
Fix: Remember that communication goes through the National Faceless Assessment Centre, exclusively by electronic mode with the assessee.
Stating that faceless assessment applies to every case.
Fix: State that it applies to the territorial areas, persons, incomes or cases specified by the Board, and that a case can be transferred to the jurisdictional officer.
Ignoring the hearing requirement in the answer.
Fix: Always mention that the order is made after taking all relevant material into account and giving the assessee an opportunity of being heard.
Using the old Act's section numbers.
Fix: Use only Income-tax Act, 2025 numbers for the June 2027 session, and cite old law only when contrasting.
Writing theory without applying it to the facts.
Fix: Follow provision, analysis, conclusion in every answer and refer to the names and dates in the question.

Last-day revision: Assessment

Faceless assessment under section 273 applies to areas, persons, incomes or cases specified by the Board.
The National Faceless Assessment Centre assigns the case to an assessment unit, intimates the assessee and serves notices.
The assessment unit analyses material, identifies issues, seeks clarification and determines any variation prejudicial to the assessee.
The verification unit does enquiry, cross verification, examination of books and witnesses, and recording of statements.
The technical unit gives legal, accounting, forensic, IT, valuation, transfer pricing and data analytics advice.
The review unit reviews proposed variations where the Centre considers it necessary.
Communication among units, and with the assessee, goes through the Centre; with the assessee it is exclusively electronic.
The assessment unit makes the assessment by a written order after hearing the assessee, and may initiate penalty proceedings.
The Centre's head may transfer a case to the jurisdictional Assessing Officer at any stage with the Board's prior approval.
Faceless assessment means e-Proceeding through the assessee's registered account on the designated portal.
Section 279(3): Assessing Officer for sections 280 and 281 excludes the Centre and assessment units.
Under section 359, the appellate order must be in writing, with points for determination, decision and reasons.

Assessment practice questions

Assessment in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Assessment: frequently asked questions

What is faceless assessment under section 273?

It is assessment conducted electronically through e-Proceeding on the designated portal, using the assessee's registered account. Assessment, reassessment or recomputation is done in a faceless manner for the areas, persons, incomes or cases the Board specifies. The National Faceless Assessment Centre manages the process.

Who makes the assessment in a faceless case?

The assessment unit makes the assessment of total income or loss by a written order. It must take all relevant material into account and give the assessee an opportunity of being heard. It also determines the sum payable or the refund due.

Can a faceless case be moved to a regular Assessing Officer?

Yes. The head of the National Faceless Assessment Centre may transfer the case to the jurisdictional Assessing Officer at any stage, if considered necessary, with the Board's prior approval. A reference route also exists where section 268(5) may be invoked.

Which Act should I use for the June 2027 session?

Use the Income-tax Act, 2025 as amended by the Finance Act, 2026. The December 2026 session uses the Income-tax Act, 1961 as amended by the Finance Act, 2025, so do not mix the two.

How should I write an assessment answer in the exam?

The paper is written and case-based. State the provision, apply it to the facts given and then give a clear conclusion. Mention practical points such as electronic communication, the hearing and the appeal route where relevant.