As per provisions of section 144C(1) of the Act prior to amendment in Finance Act 2020, AO to pass a draft assessment order if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee. In the Finance Act 2020 the words “income or loss returned” has been omitted.

Consequent to amendment the section reads as any variation which is prejudicial to the interest of such assessee.  what are the types of variations that is prejudicial to the interest of such assessee.

The income returned is accepted, whether application of different rate of tax, non granting of refund under 148 proceedings(return filed for the first in pursuance of notice u/s 148), etc., amounts to variation allowing the AO to pass draft assessment order