VittSphere ONE Calculators Blog CA Prabhakar Kumar · FCA · ICAI 560762
Case lawIncome-tax Act 2025Chapter XVI › Section 270
Chapter XVIwas s.143

Section 270 of the Income-tax Act, 2025

Section 270 — Assessment. Successor to s.143 of the 1961 Act.

Where this section sits

Section 270 is in Chapter XVI — Procedure for Assessment, which runs from section 268 to section 301.

← Section 269  ·  Section 271 →

What this section does

Sub-section (1) governs processing of a return made under section 263 or in response to a notice under section 268(1). Total income or loss is computed after six adjustments: any arithmetical error; an incorrect claim apparent from information in the return; a prescribed inconsistency with information in a preceding year's return; disallowance of a loss claimed where the return for the year of the loss was furnished beyond the section 263(1) due date; disallowance of expenditure or an increase in income indicated in the audit report but not taken into account in the return; and disallowance of a deduction claimed under any provision of Chapter VIII-C where the return is furnished beyond the section 263(1) due date. The words "under section 144 or" were omitted from that last clause by Act No. 4 of 2026 with effect from 1 April 2026, so the late-filing disallowance now runs only against Chapter VIII-C deductions. Tax, interest and fee are then computed on the income so determined, the sum payable or refund due is worked out after adjusting tax deducted at source, tax collected at source, advance tax, rebate or relief under Chapter IX, self-assessment tax and any other amount paid as tax, interest or fee, an intimation is sent, and any refund is granted.

Sub-section (2) requires that before any adjustment the assessee be given a communication in writing or in electronic mode, that any response be considered, and that where no response is received within thirty days of the communication the adjustment be made and the intimation sent. Sub-section (3) requires an intimation even where the loss declared is adjusted but no tax, interest or fee is payable and no refund is due. Sub-section (4) bars any intimation after nine months from the end of the financial year in which the return is made. Sub-section (5)(a) defines an incorrect claim apparent from information in the return as one resting on an entry inconsistent with another entry, an entry for which required information has not been furnished, or a deduction exceeding a specified statutory limit expressed as an amount, percentage, ratio or fraction; clause (b) deems the acknowledgement of the return to be the intimation where nothing is payable or refundable and no adjustment has been made. Sub-sections (6) and (7) let the Board make a scheme for centralised processing, to be laid before each House of Parliament.

Sub-section (8) is the scrutiny limb. Where a return has been furnished under section 263 or in response to a section 268(1) notice, the Assessing Officer or the prescribed income-tax authority who considers it necessary or expedient to ensure that the assessee has not understated income, has not computed excessive loss and has not under-paid tax shall serve a notice requiring him, on a specified date, either to attend the Assessing Officer's office or to produce evidence in support of the return. Sub-section (9) bars that notice after three months from the end of the financial year in which the return is furnished. Sub-section (10) then requires the Assessing Officer, after hearing the evidence and taking all relevant material into account, to make an assessment of total income or loss by an order in writing and to determine the sum payable or refundable.

Sub-sections (11) to (14) restrain that order in four cases. For a research association, association or institution, or institution referred to in Schedule III (Table: Sl. Nos. 23, 24 and 25) required to file under section 263(1)(a)(iv), no order may be made without giving effect to section 11 unless the Assessing Officer has intimated the Central Government or prescribed authority of the contravention and the approval has been withdrawn or the notification rescinded. For a registered non-profit organisation the Assessing Officer satisfied of a specified violation under section 351(1) must refer the matter to the Principal Commissioner or Commissioner and may not pass the order without giving effect to the order under section 351(2)(ii)(A) or (B). For a university, college or other institution under section 45(3)(a) whose activities breach its approval conditions, he may recommend withdrawal to the Central Government after a reasonable opportunity to show cause, and the Central Government may withdraw the approval by order. Sub-section (15) reconciles the two stages: on a regular assessment under sub-section (10) or section 271, tax or interest paid under sub-section (1) is deemed paid towards it, and any refund granted under sub-section (1) in excess of what is refundable on regular assessment is deemed to be tax payable.

Why it is there

The section splits the Department's response to a return into two very different exercises. Processing under sub-section (1) is mechanical and fast, confined to six defined adjustments visible on the face of the return and its audit report, with a thirty-day right to be heard and a nine-month outer limit. Scrutiny under sub-sections (8) to (10) is judgmental and evidence-based, and is fenced by a much shorter three-month window for issuing the notice. Sub-section (15) then makes sure the two do not double-count.

Who it applies to

The figures, and what each one turns on

Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
WhatFigureThe condition on itWhere
Time to respond before an adjustment is madeThirty daysFrom the issue of the communication of the proposed adjustment; silence lets the adjustment be made and the intimation sentSub-section (2)(b)
Outer limit for an intimation on processingNine monthsFrom the end of the financial year in which the return is madeSub-section (4)
Outer limit for a scrutiny noticeThree monthsFrom the end of the financial year in which the return is furnishedSub-section (9)

What this means in practice

The two clocks in this section run from the same point but are very far apart: three months from the end of the financial year of filing to serve the sub-section (8) notice, nine months from the end of that year to send the intimation. Once the three months pass without a notice, the return cannot be taken into scrutiny under this section however wrong it looks. On the processing side, the six adjustments are exhaustive and two of them are triggered purely by lateness — a loss claimed where the loss year's return was late, and a Chapter VIII-C deduction where this year's return was late — so a late return can lose relief without any dispute on the merits. Since 1 April 2026 that late-filing disallowance reaches Chapter VIII-C deductions only, the reference to section 144 having been omitted. The thirty-day communication under sub-section (2) is the one chance to stop an adjustment before it becomes an intimation, and where nothing is payable or refundable and no adjustment is made, sub-section (5)(b) means the acknowledgement itself is the intimation, so there is no separate document to wait for.

An example

Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.

A firm files its return four days after the section 263(1) due date, claiming a Chapter VIII-C deduction of Rs. 12 lakh and setting off a loss from an earlier year whose return was also late. On processing, both are disallowed under sub-section (1)(a)(iv) and (vi) purely because of the late filing, after a communication to which the firm does not reply within thirty days. If the intimation issues eleven months after the end of the financial year of filing, it is outside sub-section (4); and if no notice under sub-section (8) was served within three months of the end of that year, the return cannot be taken up for scrutiny under sub-section (10) either.

Where you meet this section

This is the section behind the intimation a taxpayer receives after filing, behind the adjustment communication that precedes it, and behind the notice calling on him to attend the Assessing Officer's office or produce evidence in support of the return. The assessment order that follows scrutiny is made under sub-section (10).

The words themselves

under any of the provisions of Chapter VIII-C, if the return is furnished beyond the due date specified under section 263(1)
Section 270(1)(a)(vi), the preceding words "under section 144 or" having been omitted by Act No. 4 of 2026 w.e.f. 1-4-2026, Income-tax Act, 2025.
in a case where no response is received within thirty days of the issue of such communication, such adjustments shall be made and thereafter the intimation under sub-section (1)(d) shall be sent
Section 270(2)(b), Income-tax Act, 2025.
No notice under sub-section (8) shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.
Section 270(9), Income-tax Act, 2025.

What people get wrong

What this replaced, and what changed

1961 provisionWhat changed in the move
s.1431. The numbering a practitioner uses every day moves: '143(1)' is now 270(1), '143(2)' is now 270(8), and '143(3)' - the scrutiny assessment order - is now 270(10). Every reference in correspondence, appeals and limitation arguments has to be re-pointed. 2. The dead sixth adjustment in s.143(1)(a)(vi) (addition of income appearing in Form 26AS / 16A / 16, disapplied for assessment years from 1 April 2018) is not carried forward at all. 3. S.143(1D) - processing not necessary where a scrutiny notice has been issued, itself disapplied from assessment year 2017-18 - is gone, so nothing in the 2025 Act suspends processing because a scrutiny notice has issued. 4. The faceless assessment scheme provisions s.143(3A) to (3D) are lifted out of the assessment section into a standalone s.273 'Faceless Assessment'. 5. The itemised credits in s.143(1)(c) (s.89 relief, s.90/90A/91 relief, Part A of Chapter VIII rebate) are compressed into 'any rebate or relief allowable under Chapter IX'. 6. S.270(10) is expressly made 'subject to the provisions of sub-sections (11) and (13)', which the 1961 text achieved only through the negative wording of its provisos. 7. The exempt-entity provisos, which in 1961 named s.10(21), (22B), (23A), (23B) and the fifteenth proviso to s.10(23C), are rewritten by reference to the Schedule III Table and the registered non-profit organisation regime in s.351.

How we established this. Read s.270 of the 2025 Act against s.143 of the 1961 Act. Same marginal heading 'Assessment'. The opening words track each other exactly - 'Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner' becomes 'Where a return has been made under section 263, or in response to a notice under section 268(1) such return shall be processed in the following manner'. The lettered mechanics of processing - (a) compute total income after adjustments, (b) compute tax, interest and fee, (c) determine sum payable or refund after credit for TDS, TCS, advance tax, relief and self-assessment tax, (d) send an intimation, (e) grant the refund - survive letter for letter as s.270(1)(a)-(e). The two provisos to s.143(1)(a) (prior intimation of adjustments, thirty-day response) become s.270(2). The Explanation defining 'an incorrect claim apparent from any information in the return' in its three sub-clauses and deeming the acknowledgement to be the intimation is reproduced word for word as s.270(5). The nine-month outer limit for the intimation reappears in s.270(4) in the same words. The s.143(2) scrutiny notice, including 'if, 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', reappears as s.270(8) with its proviso of three months from the end of the financial year in which the return is furnished as s.270(9). S.143(3) and its provisos on s.10(21)/(22B)/(23A)/(23B) bodies, on specified violations by trusts, and on s.35(1)(ii)/(iii) universities become s.270(10) to (14); s.143(4) becomes s.270(15).

Rules that serve this section

Rules of the Income-tax Rules, 2026 that work section 270. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.

All of them are in the Rules 2026 index.

Circulars of the Board on this section

A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.

See every circular and notification on this section, or the circulars index.

Notifications that reach this section

A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.

See every circular and notification on this section, or the notifications index.

Case law carried across

Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 270. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.

Explainers

Read with

What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.