(1) The Deputy Commissioner of Taxes shall process the “self assessment return” or revised return filed under section 180 in the following manner, namely:—

(a) income shall be computed after making the adjustments in respect of any arithmetical error in the return or an incorrect claim which is apparent from the existence of any information in the return or in any statement or document filed therewith;

(b) tax and any other amount payable under this act shall be computed on the basis of the income computed under clause (a); and

(c) the sum, payable by or refundable to the assessee, shall be determined after giving credit of the sum paid by way of advance tax including the tax paid at source and the tax paid under this Act.

(2) Where the process of return results in a difference in the amount of income, tax or other material figures than the amount mentioned in the return filed under section 180, the Deputy Commissioner of Taxes shall serve a notice to the assessee in the following manner, namely:—

(a) inform the assessee of the difference of the amount with the computation sheet containing the computed income, tax, refundable tax or other related matters as a result of the return process by attaching with the notice;

(b) giving him an opportunity to explain his position in writing within the time specified in the notice where the process of return results in additional liability or in reduction of refund, as the case may be; and

(c) within the time specified in the notice, where applicable, he shall be given following opportunity, namely:—

(i) to file an revised returnaddressing the difference mentioned in the notice; and

(ii) to pay the tax and any other amount that becomes payable as a result of the process;

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

(a) send a letter of acceptance of revised returnwithin 90 (ninety) days where all of the following conditions are fulfilled, namely:—

(i) whether a revised return is filed in accordance with the provision of clause (c) of sub-section (2);

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

(iii) whether the difference mentioned in sub-section (2) has been duly resolved in the return;

(b) where any of the conditions mentioned in clause (a) is not fulfilled, a notice of demand along with a sheet of computation of income, tax, refund or other related particulars shall be served after the expiry of the date as mentioned in the notice under sub-section (2);

(c) a notice of demand mentioned in clause (b) shall be served within 6 (six) months from the date of serving notice under sub-section (2).

(4) For the purposes of this section, “an incorrect claim which is apparent from the existence of any information in the return or in any statement or document filed therewith” shall mean a claim, on the basis of an entry, in the return or in the statement or document submitted with the return—

(a) of an item, which is inconsistent with another entry of the same, or some other item, in such return, statement or document; or

(b) in respect of a deduction, exemption, rebate or credit, where such deduction, exemption, rebate or credit exceeds the specified statutory limit which may have been expressed as monetary amount, percentage, ratio or fraction.