Section 268 - Inquiry before assessment.

Tax authority can require returns, records, and prescribe audits with senior approval, limited document age and audit timelines

For assessment, the tax authority may require any person who filed a return or whose filing time has expired to furnish a return, produce accounts or documents, and supply prescribed information including assets and liabilities (requirement for assets outside accounts needs prior Joint Commissioner approval); accounts older than three years need not be produced. The authority may conduct inquiries and, with prior approval of a senior commissioner and after hearing the taxpayer, direct an audit by an accountant or inventory valuation by a cost accountant whose nomination is by the senior commissioner. Reports must be furnished within specified periods (extensions limited so aggregate does not exceed six months), audit costs are set and paid by the Government, and the taxpayer gets a hearing on materials except in assessments under the specified penal provision.