Skip to content

CA Final · Direct Tax Laws & International Taxation · Assessment of Various Entities

Ravi Traders Ltd filed its return of income on time, and the return was processed under section 270(1) of the Income-tax Act, 2025. The department proposes to adjust the return for an arithmetical error. Which statement is correct about the procedure before the adjustment is made?

Before any adjustment under section 270(1)(a), including one for an arithmetical error, the department must communicate the proposed adjustment to the assessee in writing or electronically and consider any response received. Only if no response arrives within thirty days may the adjustment be made.

  1. AA communication of the proposed adjustment must be given to the assessee in writing or in electronic mode, and the response, if any, must be consideredCorrect
  2. BThe adjustment can be made straight away without any communication, because arithmetical errors are mechanical
  3. CThe adjustment can be made only after the Assessing Officer hears the assessee in person on a notice to attend
  4. DThe adjustment can be made only with prior approval of the Principal Commissioner

Explanation

Section 270(2) requires a communication of the proposed adjustments in writing or electronic mode before they are made. The assessee's response is considered. If none is received within thirty days, the adjustment is made. Option B is wrong because no adjustment under section 270(1)(a) is exempt from this communication.

Did you get it right without looking?

One question tells you little. A timed set on Assessment of Various Entities shows your real accuracy, how long you take and where you lose marks.

Practise Assessment of Various EntitiesFree diagnostic mock

More Assessment of Various Entities questions