Have you recently received a notice from the Income Tax Department stating that your previously filed ITRs will be reassessed? That is probably because of issues pertaining to tax compliance. According to the Section 148 of the Income Tax, if an individual’s taxable income has bypassed assessment, an Assessing Officer has the right to issue a notice of reassessment to ensure tax compliance.
This blog talks about Section 148 of Income Tax Act and the provisions for reassessment in detail.
As mentioned earlier, the notice can be issued to the assessee if an AO believes that his/her taxable income has not been assessed, according to the Section 148 of ITA guidelines.
However, in that case, the designated officer needs to have valid reasons for doing so. Some instances in which an AO can send a notice to the taxpayer are given below:
Now that you are aware of all the conditions and necessary reasons for issuing a notice under Section 148 of the Income Tax Act let’s check the time limit for this.
Also Read: Income Tax Assessment
The power to issue notice is mentioned under section 151(1) of the Income Tax Act, 1961. These notices are sent to people who have escaped assessment or reassessment of taxable income. Only a few people have the authority to issue notices on specific conditions and they are:
Also read: Section 154 of the Income Tax Act
Under section 148 of the Income Tax Act, the Assessing Officer has been bestowed with the power to assess or reassess taxable income that might have been missed and has not been assessed according to the guidelines of the Income Tax Act.
Suppose the Assessing Officer has any valid reason to suspect that the assessee has avoided assessment of any taxable income. In that case, the Assessing Officer can utilise his/her power of assessment as well as reassessment as per the provisions laid out under Section 147 through Section 153.
In case an assessee receives a notice from the Assessing Officer for avoiding assessment of taxable income, the assessee must do the following:
To file the writ petition, the assessee has to provide proof for the following:
As stated earlier, it is necessary for an AO to issue the notice within 3 years from the end of that particular assessment year. This is applicable if the income escaped does not go beyond Rs.1 lakh. However, in case the concealed income exceeds Rs.50 lakh, an Assessment Officer can issue a notice u/s 148 within 10 years from the end of that relevant AY.
Note that if such reassessments are already carried out under Section 143(3), the AO cannot issue further notices u/s 147. That said, he/she can issue a notice in the following cases:
In the case of the scenarios mentioned above, if an AO issues a notice u/s 148, the assessee must submit certain information.
The following things must be considered before replying to a notice under section 148 of the Income Tax Act, 1961:
All the pointers mentioned above should be kept in mind, and individuals must ensure that their income is assessed each assessment year to avoid any tax complications.
Also Read: Section 147 of Income Tax Act
Here are some details an assessee must provide once he/she receives a notice from the designated officer under Section 148 of Income Tax Act:
A taxpayer needs to submit these details within 30 days of receiving the notice. In case of providing ITR of any other assessable individual, he/she needs to follow the set format as per norms of Section 148.
Also read: Section 194 of the Income-tax Act
In case you receive such a notice under Section 148 of the Income Tax Act, make sure the information the AO is asking for is submitted within that stipulated period. File your income tax returns and obtain a copy of the reasons for issuing that notice.
Ans: Here is a list of different types of notices an assessee may receive as per Income Tax Law:
1. Under Section 131 (1A) of ITA, in case the taxable income of that person is concealed.
2. Under Section 156 of ITA, for notice of demand.
3. Under Section 143(3), in case of scrutiny assessment.
4. Under Section 139(9), in case of defective ITR.
5. Under Section 148 and 147, in case the taxable income escaped assessment.
6. Under Section 142(1), in case of preliminary enquiry prior to an assessment.
7. Under Section 245, in case of adjustment of refund against the tax demand.
Ans: In case an Assessment Officer finds irregularities in taxes, he/she can issue a notice regarding reassessment. Reassessment u/s 148 for any asset outside India must occur within 16 years after the end of that assessment year.
Ans: In case of a revision, the newer return will replace the original one under Section 148. Additionally, the date of filing income tax returns will be the same as that of the original filing date.
Ans: If you find the reasons mentioned by the Assessing Officer in a notice to be inaccurate, you can challenge it. You have a right to file a writ petition challenging the legality of that notice before the respective High Court.
Ans: An Assessing Officer must collect material evidence against a taxpayer before he/she can issue a notice under this section. Suspicion alone cannot be grounds to issue such a notice. The materials offered as evidence should resonate with any reason to doubt a taxpayer’s intention of evading taxes.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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