By March 2025 the income tax department is designated to finalize the reassessment of 170,000 notices, concentrating on the undisclosed income from the past assessment years. Between March 2021 and March 2024, such notices were being issued targeting the differences in declarations of income.
Reassessments Scene
The reopening of nearly 600,000 matters has been initiated by the Central Board of Direct Taxes (CBDT) within a 3-year time duration as of mismatches between the declared income and the available information with the IT department. 430,000 notices have been assessed till now and the orders issued, as per the senior official from the department.
Financial Importance
The precise amount is still not known, preliminary approximates recommend the same can surpass Rs 1000 crores. The reassessment notices related to distinct assessment years, varying from 2014-15 to 2022-23. Certain matters were approaching the statutory time restriction for reassessment.
Lawful Framework and Standards
Such notices are counted under section 148 of the Income Tax Act which controls the reopening of past assessments. The majority were issued before the persons who have a yearly income of more than Rs 50 lakh. Under the identical section, IT offices could review the matter of income evasion going back 6 years. With the Finance Act of 2021 introducing Section 148A, matters older than a decade could be reopened if the escaped income exceeds Rs 50 lakh.
Rules and Procedures
For income less than Rs 50 lakh, reassessment notices could not be issued if exceeding than 3 years have passed since the finish of the pertinent assessment year. The CBDT norms assures that the current financial limits are carried when reopening previous years estimations.
Supreme Court Ruling
Supreme Court upheld the validity of all reassessment notices in 2022, issued on or after April 1, 2021, permitting the reopening of assessments up to 6 years prior. After multiple high court challenges the same ruling arrived, driving the Income Tax Department to ask for a definitive ruling from the Supreme Court. Therefore, reassessment notices for FY 2012-13, 2013-14, and 2014-15 were dropped for small assesses with escaped income of less than Rs 50 lakh.
Standardized process
The CBDT mandated a standardized approach for reopening cases, post the Supreme Court ruling. The matters settled via appellate authorities or courts are not to be reopened, assuring a constant and honest reassessment process.
Reassessment finishing has the objective of improving tax compliance and addressing the issue of undisclosed income, contributing to an apparent and accountable tax system in India.
