What are the key rights of taxpayers during assessment proceedings? Are there any limitations?

Taxpayers have certain key rights during income tax assessment proceedings under the Income Tax Act:

1. Right to Inspection: To inspect any records or evidence relied upon by the AO (Section 143(3)).

2. Right to Cross-Examination: To cross-examine third-party witnesses whose statements are used by the AO against the taxpayer (Section 143(3)).

3. Right to Make Submissions: To make oral and written submissions explaining taxpayer’s case during the assessment proceedings.

4. Right to Appeal: Against any adverse assessment order before higher appellate authorities like CIT(A), ITAT, High Courts, and Supreme Court.

However, these rights are subject to limitations prescribed under the Act and have to be exercised within stipulated time limits. Any grievance against denial of these rights can be challenged through Writ jurisdiction of High Courts.

Note: A number of recent High Court decisions have reaffirmed these taxpayer rights.