The Income Tax Act Section 143(3) Regular Assessment where a return has been furnished under Section 139, or in response to a notice under Sub-section (1) of Section 142, the Assessing officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, either to attend his office or to produce, any evidence on which the assessee may rely in support of the return. However, no notice shall be served after the expiry of twelve months from the end of the month in which the return is furnished.

On the day specified in the notice issued or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment.

Tax has to be determined and such determination is to be made in the Asst. order or computation sheet to be annexed with the Asst. order. Kalyan Kumar Ray vs. CIT The assessed income may be lower than the returned income. The boards circular no 549 para 5.12 dt. 31.10.1989 hasbeen held to be ultra-vires Gujarat Gas Co Ltd v JCIT(A).

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