TaxTMI 
TaxTMI 
Assessing Officer's Powers and Taxpayer Rights in Advance Tax : Clause 407 of the Income Tax Bill, 2025 Vs. Section 210(3)-(6) of the Income-tax Act, 1961
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.... inflow of tax revenue to the government and to spread the tax burden equitably across the financial year. The provision is a successor to, and a substantial redraft of, Section 210(3)-(6) of the Income-tax Act, 1961. The changes in the new Bill reflect the evolving administrative needs, taxpayer rights, and technological advancements in tax administration. This commentary provides an in-depth analysis of Clause 407, its objectives, operative mechanisms, and practical implications, and then presents a clause-by-clause comparative analysis with the corresponding provisions of the existing law. Objective and Purpose The legislative intent behind Clause 407 is to empower the Assessing Officer to direct assessees, who have already undergone r....
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..... Sub-section (2): Timing and Service of Order The order under sub-section (1) can be passed at any time during the tax year but not later than the last day of February. It must be followed by a notice of demand u/s 289. This ensures that taxpayers have adequate notice and time to comply with their advance tax obligations before the close of the financial year. Sub-section (3): Determination of "Specified Sum" "Specified sum" is defined as the higher of: * The total income of the latest tax year assessed by regular assessment; or * The total income returned by the assessee in any subsequent return of income. This approach ensures that the tax base reflects the most recent and highest disclosed or assessed income, thereby minimizing....
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....n assessee who believes their current income is lower than the amount specified in the AO's order may send an intimation in the prescribed form and pay advance tax as per their own estimate, calculated as per section 401. This right is a significant taxpayer safeguard, preventing overpayment and recognizing the variability of income during the year. Sub-section (9): Payment of Higher Advance Tax by Assessee If the assessee estimates that their current income exceeds the amount specified in the AO's order or their own earlier intimation, they must pay the higher advance tax as per their estimate by the due date of the last instalment. This provision ensures that upward revisions in income are promptly reflected in tax payments, red....
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....nstitutes the existing legal framework for the payment of advance tax in pursuance of an Assessing Officer's order. The key features are: * Section 210(3): AO may require a person, already assessed by regular assessment, to pay advance tax by written order, specifying the amount and instalments, with a notice of demand u/s 156. * Section 210(4): AO may amend the order if the assessee files a return u/s 139 or in response to section 142(1), or a regular assessment for a later year is made, and issue an amended notice of demand. * Section 210(5): Assessee may intimate the AO if their estimate of current income is less than the amount specified in the AO's order and pay advance tax accordingly. * Section 210(6): If the assessee....
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....arifies that the "specified sum" for the amended order is the income declared or assessed in the new return/assessment, enhancing precision. * Both require the amended order to be made before March 1 and to be followed by a notice of demand. 5. Payment Schedule Adjustments * Clause 407(7) vs. Section 210(4): * Clause 407(7) specifically addresses the scenario where notice is served after due dates, providing that only future instalments are affected. Section 210(4) is less explicit on this point, potentially leading to ambiguity. 6. Assessee's Right to Estimate Lower Advance Tax * Clause 407(8) vs. Section 210(5): * Both permit the assessee to send an intimation to the AO if their estimated advance tax liability is lower tha....