Section 270 of the Income-tax Act, 2025 — Assessment: Processing of Returns, Prima Facie Adjustments & Scrutiny

In plain language

What Section 270 actually deals with

Section 270 of the Income-tax Act, 2025 is titled simply "Assessment" — and it is one of the most important machinery provisions in the whole Act, because it governs what happens to your Income Tax Return (ITR) after you file it. It combines, in a single clean section, what were previously spread across Section 143(1) (summary processing), Section 143(1a)/(1b) (prima facie adjustments) and Sections 143(2) & 143(3) (scrutiny / regular assessment) of the old Income-tax Act, 1961.

In plain words, Section 270 covers two distinct stages:

• Stage 1 — Processing (summary assessment): The return you file under Section 263, or in response to a notice under Section 268(1), is put through the Centralised Processing Centre (CPC) system. The computer checks arithmetic, obvious inconsistencies and clearly wrong claims, computes tax/interest/fee, adjusts your TDS, TCS, advance tax and self-assessment tax, and issues an intimation telling you whether you owe more or get a refund.
• Stage 2 — Scrutiny (regular assessment): If the department wants to examine your return in detail — because it suspects understated income, an excessive loss, or under-paid tax — the Assessing Officer (AO) issues a notice, hears you out, and passes a written assessment order.

Who it applies to

• Every taxpayer who files a return — salaried individuals, businesses, professionals, companies, firms, HUFs — because almost every ITR is first "processed" under sub-section (1).
• Anyone selected for scrutiny — only a small fraction of returns, picked through risk-based / CASS (Computer Aided Scrutiny Selection) criteria, move to the scrutiny stage under sub-section (8).
• Non-profit organisations, universities and educational/medical institutions get special safeguards — an adverse assessment against them is linked to the separate procedure for withdrawal of their registration/approval.

Prima facie adjustments allowed during processing

During Stage 1, the CPC can only make limited, "apparent from the record" adjustments — it cannot re-open your books. Permitted adjustments include:

• Any arithmetical error in the return;
• An incorrect claim that is apparent from the information in the return itself;
• Disallowance of a loss claimed where the return was filed after the due date;
• Disallowance of an expenditure or deduction indicated in the audit report but not taken into account in the return;
• Additions of income appearing in the audit report or in Form 26AS / AIS but not included in the return.

What "incorrect claim apparent from the return" means

This is defined narrowly (mirroring the old law) so the CPC cannot overreach. It means a claim where:

• an entry is inconsistent with another entry of the same or another item in the return;
• the information required to substantiate the entry has not been furnished; or
• a deduction exceeds the statutory limit prescribed by the Act.

Key conditions, limits and timelines

• Mandatory prior intimation before adjustment: No adjustment can be made without first giving you an intimation (in writing or electronically) and a 30-day window to respond. If you do not respond in 30 days, the adjustment proceeds.
• Processing / intimation time limit: An intimation under sub-section (1) cannot be sent after 9 months from the end of the financial year in which the return is furnished.
• Scrutiny notice time limit: A scrutiny notice under sub-section (8) cannot be served after 3 months from the end of the financial year in which the return is furnished. This is a hard deadline — a late notice makes the scrutiny invalid.
• Deemed intimation: Where no adjustment is made and no tax/refund is due, the acknowledgement of the return is treated as the intimation.

How it interacts with other sections

• Return sections (263, 268): Section 270 only bites on returns filed under Section 263 (regular/belated/revised return) or in response to a Section 268(1) notice.
• Faceless assessment: Scrutiny under Section 270 is conducted through the faceless assessment scheme, so there is no in-person AO — everything is electronic and jurisdiction is randomly allotted.
• Best judgment assessment: If you ignore the scrutiny notice, the AO can proceed to a best-judgment assessment under the relevant "non-cooperation" provision.
• Penalty (Section 270A of the 1961 Act lineage): Additions in a Section 270 assessment can trigger under-reporting / mis-reporting penalties (50% / 200% of tax) in the corresponding penalty provision of the 2025 Act.
• Reassessment / income escaping assessment: Even after a Section 270 assessment, income that escaped can be reopened under the separate reassessment sections.

Practical implications for taxpayers

• Always read the intimation, don't ignore it. A processing intimation is not a scrutiny notice — but if it proposes an adjustment, respond within 30 days on the portal, or the change (and extra demand) becomes final.
• Reconcile before filing. Most Section 270(1) adjustments arise from mismatches with Form 26AS, AIS/TIS and the audit report. Reconciling these before filing prevents automatic disallowances.
• File on time. Belated returns risk automatic disallowance of losses and certain deductions at the processing stage itself.
• Watch the 3-month clock. If no scrutiny notice arrives within 3 months of the end of the financial year of filing, your return is safe from full scrutiny for that year (though reassessment powers remain).