(1) A “self-assessment return” or revised return filed under section 180 shall be processed by the Deputy Commissioner of Taxes in the following manner, namely: -

(a)   in the light of any mathematical error in the return filed or any incorrect claim in the light of any statement or document filed with the return, the same shall be computed as adjusted income;

(b)   the tax payable under this Act and any other sum to be calculated on the basis of clause (a); and

(c)   shall determine the tax payable or refundable by giving advance tax paid including tax at source and credit of tax paid under this Act.

(2) If the amount shown in the "self-assessment return" or amended return filed under section 180 with the amount of income, tax or other significant mount as a result of the return process, the Deputy Commissioner of Taxes shall issue a written notice to the taxpayer as follows, namely: -

(a)   inform the tax payer of the difference amounting to the computation of income, tax, refundable tax or other related matters as a result of the return process attached to the notice;

(b)   give an opportunity to the taxpayer in writing to explain the position of the additional liability arising in the return process or reduction of return within the period specified in the notice; and

(c)   within the period specified in the notice, as applicable, afford him the following opportunities, namely: -

(i)    filing the revised return adjusting the difference mentioned in the notice; and

(ii)  payment of taxes and other dues due as a result of the said process;

(3) Where a notice is given under sub-section (2), the Deputy Commissioner of Taxes—

(a)   Send the revised return acceptance letter within 90 (ninety) days after ensuring the fulfillment of the following conditions, namely: -

(i)    whether the amended return has been filed in accordance with the provisions of clause (c) of sub-section (2);

(ii)  whether any tax or other amount payable under this Act as a result of the process has been paid on or before the filing of the revised return; and

(iii)          whether the difference referred to in sub section (2) has been properly addressed in the return;

(b)   if any of the conditions mentioned in clause (a) is not fulfilled, after the expiry of the date specified in the notice given under sub-section (2), a demand notice shall be issued with a statement of income, tax, refundable tax or other related matters;

(c)   The notice of claim mentioned in clause (b) shall be issued within 6 (six) months from the date of issue of notice under sub-section (2).

(4) For the purposes of this section, “any false claim in the light of any information contained in the return or in any statement or document filed with the return” means any such claim based on information arising from any return or any statement or document filed—

(a)   any item, which does not correspond with any other similar entry, or any other item, which is inconsistent with any statement or document or the return; or

(b)   any deduction, exemption, rebate or credit, in which case any deduction determined monetary amount, proportion or fraction of the permitted statutory limit exceeds the exemption rebate or credit limit.