The income tax department said to the field offices to not provide the reassessment notices for 2012-13, 2013-14, and 2014-15 financial years to the small assessee in which the income preventing the tax is lower than Rs 50 lakh.
Circulating an instruction on the execution of the judgment of the supreme court for the notices issued beyond the 3-year reassessment duration, the council specified that for the FY16 and F17 in which the duration to provide these notices comes in 3 years, tax officers shall provide the show cause notices and furnish the data to the assessee towards starting the reassessment proceedings in 30 days.
Central Board of Direct Taxes (CBDT) questioned the tax officer to allot assessees two weeks time to answer these notices, which could be prolonged upon the request of the assessee in real cases.
The Supreme court this month favours the IT department and supported all reassessment notices given on/after April 1, 2021– reopening assessments going back to up to 6 years.
The government had in Budget former year (2021-22) lessens the reopening time for the IT assessments to 3 years from 6 years.
Tax experts specified that to provide transparency towards tax officials and assessees and to coordinate the Supreme court is interrupted constantly in all the 90,000 odd cases in India.
“This is a much welcome circular by CBDT providing clarity to both taxpayers and tax officials. A lot of cases for AYs 2013-14, 2014-15 and 2015-16 for small taxpayers are expected to be dropped… except in exceptional cases, where an extended timeline for assets worth Rs 50 lakh or more is invoked, taxpayer, conveyed.”
Tax experts specified that this circular shall clarify all the problems that come through the controversy made around reassessments by Finance act 2021 and post effects of the Supreme court judgment.
“SC ruling read with the recent instruction would compel numerous to get the reassessments completed for notices issued from April to June 2021, said a tax expert.”
Tax expert specified that CBDT has given the guidelines to the officers to provide the materials to the assessee for the causes for reopening so that they can answer as per that in the time duration of 2 weeks.
“The timelines are aggressive for taxpayers. Further, where the escaped income is lower than Rs 50 lakh for certain years, no material will be provided by the tax officers as they would not proceed further with these cases. Suitable defences under section 148A would also be available to the taxpayers wherever it is applicable, said the tax expert.”
