Answer

1. F

   Facts

   You can accept the issue raised. The revising authority will then pass an order, often directing a fresh assessment or modifying the original order, and tax will be computed on that basis.

2. P

   Provisions and law

   • Sec 263, Income-tax Act 1961 (now Sec 377, Income-tax Act 2025)The Principal Commissioner or Commissioner can revise an assessment order that is erroneous and prejudicial to revenue, after giving a hearing, within 2 years from the end of the financial year of the order.
3. A

   Analysis

   Accepting can make sense where the amount is small or the facts are clearly against you. Fighting a weak case costs time and fees. But check the penalty risk and the impact on other years. Get advice before deciding.

4. C

   Conclusion

   1. 1Weigh the tax at stake against the cost of contest.
   2. 2Check the penalty risk.
   3. 3Decide and reply clearly.
   4. 4Pay any resulting demand on time.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.