Skip to content

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

Sundaram Traders Ltd. furnished its return for a tax year. The Centralised Processing Centre proposes to adjust the total income for an arithmetical error in the return. Under section 270 of the Income-tax Act, 2025, what must be done before the adjustment is made?

Before any adjustment under section 270(1)(a), the assessee must be sent a communication of the proposed adjustment in writing or electronically. Any response is considered. If no response comes within thirty days, the adjustment is made and the intimation is sent afterwards.

  1. AA communication of the proposed adjustment must be given to the assessee, and if no response is received within thirty days, the adjustment is madeCorrect
  2. BThe adjustment may be made at once and the assessee informed only through the final intimation
  3. CA notice for personal hearing before the Assessing Officer must be served under sub-section (8)
  4. DThe adjustment can be made only after the Principal Commissioner approves it

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 arrives within thirty days of the communication, the adjustments are made and then the intimation is sent. Making the adjustment at once is wrong because prior communication is mandatory.

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