Section 270
Section 270: assessment
Section 270 covers two connected stages of assessment: first, the automatic processing of every return filed under Section 263 (correcting arithmetical errors, disallowing certain claims, and issuing an intimation of tax payable or refund due); and second, the fuller regular assessment where the Assessing Officer can call for evidence and pass a formal assessment order.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
Processing every return that is filed
Every return filed under Section 263, or in response to a notice under Section 268(1), is processed as follows: total income or loss is computed after adjusting for arithmetical errors; incorrect claims apparent from information in the return; prescribed inconsistencies with the preceding year's return; disallowance of a loss claimed where the loss-year return was filed after the Section 263(1) due date; disallowance of expenditure or increase of income flagged in the audit report but not reflected in the return; and disallowance of a Chapter VIII-C deduction where the return was filed after the due date.
Tax, interest and fee are then computed on this adjusted total income, and the sum payable or refund due is determined after adjusting for TDS, TCS, advance tax paid, rebates/reliefs under Chapter IX, self-assessment tax paid, and other amounts already paid.
An intimation is then sent to the assessee specifying the sum payable or the refund due, and any refund due is granted.
Giving the assessee a chance to respond before adjustment
Before making any adjustment described above, the assessee must be communicated the proposed adjustment in writing or electronically. Any response received is considered; if no response is received within thirty days of the communication, the adjustment is made and the intimation is then sent.
Intimation even where only a declared loss is adjusted
An intimation is also sent where the declared loss is adjusted but no tax, interest or fee is payable and no refund is due.
Time limit for sending the intimation
No intimation under this processing step can be sent after the expiry of nine months from the end of the financial year in which the return is made.
Centralised processing scheme
The Board may make a scheme for centralised processing of returns, to expeditiously determine tax payable or refund due. This scheme must be laid before each House of Parliament as soon as may be.
Notice for a full (regular) assessment
Where a return has been furnished under Section 263 or in response to a Section 268(1) notice, and the Assessing Officer (or prescribed authority) considers it necessary to check that income has not been understated, loss not overstated, or tax not underpaid, they may serve a notice requiring the assessee to attend the office or produce supporting evidence.
This notice cannot be served after the expiry of three months from the end of the financial year in which the return was filed.
Passing the assessment order
On the date specified in the notice (or soon after), having heard the assessee's evidence and considered all relevant material, the Assessing Officer makes an order in writing assessing total income or loss, and determines the sum payable or refund due based on that assessment.
Extra safeguards for specified charitable/institutional entities
For research associations, associations/institutions and other institutions referred to in Schedule III (Sl. No. 23, 24, 25), no assessment order can be made without giving effect to Section 11, unless the Assessing Officer has intimated the relevant contravention to the Central Government/prescribed authority and the entity's approval/notification has been withdrawn or rescinded.
For a registered non-profit organisation where the Assessing Officer is satisfied a specified violation under Section 351(1) has occurred, a reference must be sent to the Principal Commissioner/Commissioner to withdraw approval or registration, and no assessment order can be made without giving effect to that Principal Commissioner's/Commissioner's order.
Where a university, college or institution under Section 45(3)(a) is found not to be carrying out its activities per the conditions of its approval, the Assessing Officer may, after giving a show-cause opportunity, recommend withdrawal of approval to the Central Government, which may then withdraw it.
Reconciling earlier payments with the regular assessment
Where a regular assessment under this section or Section 271 is made, any tax/interest already paid under the self-assessment provisions is deemed paid toward that regular assessment. If no refund is due on regular assessment, or the amount already refunded exceeds what is refundable, the excess is deemed to be tax payable by the assessee, with the Act's provisions applying accordingly.
Frequently asked questions
How long does the tax department have to send an intimation after I file my return?
No intimation on processing of the return under Section 270(1) can be sent after the expiry of nine months from the end of the financial year in which the return is filed.
How long does the department have to issue a scrutiny notice after I file my return?
A notice under Section 270(8) for a fuller assessment cannot be served after the expiry of three months from the end of the financial year in which the return was furnished.
Do I get a chance to respond before an adjustment is made to my return?
Yes - you must be communicated the proposed adjustment in writing or electronically, and any response within thirty days is considered before the adjustment and intimation are finalised.
Related sections
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Get help responding to an assessment noticeLast updated 9 September 2026