Provision for Re-assessment Under Section 147 of I-T Act

Details Need by AO for Reopening Not Reasons to Believe

If any income taxable for the case of the taxpayer has gone without assessment for any assessment year. The assessing officer might be liable to the act under sections 148 to 153 to assess or re-assess this income or re-complete the loss or depreciation allowance or any other allowance or deduction for the AY( prescribed under Section and in sections 148 to 153 referred to as the appropriate AY).

The assessing officer towards the purpose of the AY or re-assessment or re-computation beneath the act might assess or re-assess the income towards the cause which has left the assessment and these causes come to his notice for proceeding beneath the act by not influencing the fact that the provision of the section 148A has not agreed with that.

Section 147, Previous to Finance Act, 2021

If there is a reason to know by the assessing officer that any income chargeable to tax has left assessment towards any AY, he might be liable to the provision of section 148 to 153, assess or re-assess the income and also the additional income subjected to tax which has left assessment and shall come to know by him towards the proceedings beneath this section or re-compute the loss or the depreciation allowance or additional allowances according to the case might be for the AY in this section and (in section 148 to 153 referred to as the applicable AY).

Under the New Provisions When Notice u/s 148 Will be Provided

Notice u/s 148 can be circulated by AO if:

1. There is “information with the assessing officer which suggests that the income chargeable to tax has escaped assessment” towards the case of the taxpayers for the applicable AY.
2. The Assessing officer takes approval from the certified head to provide this notice.

Details Required with AO for Escapement of the Income

Details through the assessing officer show that the income taxable has escaped assessment.

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Meaning & Scope of the data

There are 2 elaborations beneath the amended section 148 which gives the meaning of the expression “information with the AO which suggests that the income chargeable to tax has escaped assessment”.

1st Elaboration to Section 148

Any details engaged in the case of the taxpayer for the applicable AY as per the risk handling strategy initiated through the board along with time. This reporting shall be initiated through the computer-based system.
Any final objection urges through the comptroller and auditor general of India to the effect that the assessment towards the taxpayer’s case for the applicable AY has not been furnished as per the provision of the act.

2nd Elaboration to Section 148

The cases in which AO will be deemed to pose the details which recommend that the income chargeable to tax has left an assessment.

• Search u/s 132 – A search is started u/s 132 on or post to the initial day of April 2021 in the case of the taxpayer.
• Requisition u/s 132A – Books of Accounts or other certificates or any assets are bought u/s 132A, on or after the 1st day of April 2021 in the case of the assessee
• Survey u/s 133A – A survey is conducted u/s 133A, other than a survey u/s 133A (2A) [TDS, TCS related survey] or a survey u/s 133A (5) [review to check expenditure contracted in connection with any function, ceremony or event], on or post to the initial day of April 2021, in the case of the taxpayer.
• Asset captured while investigation reveals that it belongs to the other taxpayer. AO is satisfied through the before approval of Pr. CIT or CIT that any money bullion jewellery or another important thing seized or bought u/s 132 or Section 132A towards any other individual on or post to the 1st day of April 2021, refers to the taxpayers.
• During the investigation, the documents captured are concerned with the other taxpayer which the assessing officer knows about. Through the permission of Pr, CIT, or CIT, any books of accounts or documents, Seized or requisitioned under Section 132 or Section 132A in case of any other person on or after the initial day of April 2021, belongs to or about the other details containing is related to the taxpayer.

For the case revealed in the explanation, AO will be deemed to have the details which state that the income is chargeable to tax and has left an assessment for the taxpayer’s case in the three years of assessment.

There must be a quick preceding of the AY concerned to the previous year where the search is implemented or books of account the credentials or any assets are captured or investigation executed in the case of the taxpayer or money, bullion, jewellery or other essential item or books of accounts or documents are seized or requisitioned in the case of any other individual. Search-based assessments now covered u/s 147, Provisions of Section 153A and 153 not to be relevant towards the search on or post to 01-04-2021.

Amendment in budget 2024, time limits for issuing notices regarding the reopening of assessments reduce the 10-year duration to five years (or six financial years) for cases where the income exceeds Rs 50 lakh under section 148A of I-T Act. The time limit remains unaltered for income below the threshold. This amendment is effective from 1 September 2024.

Deemed Case in Which the Income Chargeable to Tax has Left Assessment

The deemed cases are now captured beneath Elaboration 1 and Elaboration 2 to Section 148 which has been explained above. Before that, a distinct class of cases has been captured beneath elaboration 2 to section 147.