IT Queries 6
Reassessment on or after 01-09-2024
Q1. Whether production before the AO of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will amount to disclosure?
Ans. No equivalent provision. Mere production of account books or documents from which the Assessing Officer (AO) could, with due diligence, have discovered material facts, does not amount to full and true disclosure by the assessee. This view is consistent with judicial interpretation even prior to the amendment, and post 01.09.2024, the statutory language under amended Section 149 reinforces that such indirect disclosure does not bar reassessment.
Q2. Whether jurisdiction under section 147 can be acquired to assess income of any other person or in respect of his own income if no return in respect of such income has been furnished and such income exceeds the maximum amount not chargeable to tax?
Ans. Section 148(1) requires including in his return the income of any other person in respect of which he is required to be assessed.
Q3. Whether jurisdiction under section 147 can be acquired if return is furnished and no assessment has been framed, and the assessee has understated the income or claimed excessive loss, deduction, allowance, or relief?
Ans. Yes, even where a return has been filed but no assessment has been framed (i.e., the return has not been subjected to scrutiny), jurisdiction under section 147 can be exercised if the AO has information that income has been understated or that the assessee has claimed excessive loss, deduction, or allowance. This is explicitly permitted under the amended provisions applicable from 01.09.2024.
Q4. Whether jurisdiction under section 147 can be acquired if no report of international transaction has been furnished?
Ans. Yes, failure to furnish the report required under section 92E (in respect of international or specified domestic transactions) is a valid ground for initiating reassessment under section 147, provided such omission leads to escapement of taxable income and is flagged through prescribed information channels under the updated reassessment scheme effective from 01.09.2024.
Q5. Whether jurisdiction under section 147 can be acquired if, as per information received under section 133C(2), it is noticed by the AO that the income of the assessee exceeded the maximum amount not chargeable to tax, or that the assessee has understated income or claimed excessive loss, deduction, or relief?
Ans. Yes, reassessment can be initiated based on information received under section 133C(2)/133A , which is a recognized source of “information suggesting escapement of income” under the reassessment framework applicable from 01.09.2024. If such information indicates that the assessee’s income exceeds the basic exemption limit or reveals understatement or excessive claims, it qualifies for reopening subject to procedural safeguards.
Q6. Whether jurisdiction under section 147 can be acquired, where a person is found to have financial asset or financial interest located outside India?
Ans. Yes, where a person is found to have financial interest or assets outside India, it constitutes a valid ground for initiating reassessment under section 147. This situation is treated with heightened scrutiny, and the existence of such foreign financial interests, especially if not reported or disclosed in return, amounts to information suggesting escapement of income chargeable to tax.
Q7. Whether AO can acquire jurisdiction under section 147 in respect of an issue which comes to his notice subsequently during the reassessment proceedings, notwithstanding that the reasons recorded by the AO did not contain such issue?
Ans. Yes, under Explanation to section 147, the AO is permitted to assess or reassess any issue that comes to his notice subsequently during reassessment proceedings, even if it was not part of the original reasons recorded for reopening. This principle remains applicable under the amended regime post 01.09.2024 and is judicially upheld to enable comprehensive scrutiny once the reassessment jurisdiction is validly invoked.
Q8. Whether notice under section 148 could be issued only when there is information on the basis of which the AO has reason to believe that income chargeable to tax has escaped assessment?
Ans. Yes, under the amended scheme, notice under section 148 can only be issued when the AO has in possession "information suggesting that income chargeable to tax has escaped assessment." The information must originate from specified sources, including risk management strategies, audit objections, data under section 133C(2), or cases flagged under other statutory schemes, and there must be application of mind by the AO to form reasoned belief.
Q9. Whether notice under section 148 can be issued after the lapse of four years where assessment is completed under section 143(3) unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under section 142(1) or 148, or to disclose fully and truly all material facts necessary for his assessment for that assessment year?
Ans. No such conditions are prescribed but notice u/s 148 can be given, if (i) jurisdiction is correctly acquired u/s 147 (ii) limitations and conditions prescribed u/s 149 are satisfied.
Q10. Whether notice under section 148(1) in respect of matters which are the subject matter of any appeal, reference or revision can be issued?
Ans. No, as per the proviso to section 148, the AO cannot issue a notice for reassessment under section 148(1) for any income involving matters that are the subject of an appeal, reference or revision. This is a safeguard to avoid parallel proceedings and conflicting determinations on the same issue already under adjudication.
Q11. Whether return filed under section 148(1) will be similar to return to be filed under section 139?
Ans. Yes, the return filed under section 148(1) in response to a reassessment notice is deemed to be a return furnished under section 139. Therefore, it is treated as a regular return for all practical and legal purposes, including processing, assessment, and penalty implications.
Q12. Time allowed to file the return.
Ans. The assessee is required to file the return within 30 days from the date of issuance of notice under section 148(1), or within such extended time as allowed by the Assessing Officer (AO). This is in line with procedural fairness and gives adequate opportunity to the assessee to respond.
Q13. Whether any time limit is prescribed for issue of notice under section 148(1)?
Ans. Yes, the time limits for issuing notice under section 148(1) are governed by section 149. Generally, notice cannot be issued after 3 years from the end of the relevant assessment year unless the escaped income represented in the form of assets, expenditure, or entry exceeds ₹50 lakh, in which case the outer limit is 5 years.
Q14. Whether procedure prescribed in section 148A is to be followed?
Ans. Yes, except in search and requisition cases, where block assessments are to be carried out, the AO is mandated to follow the procedure prescribed in section 148A—issue a show cause notice and pass a speaking order under section 148A(3) before issuing notice under section 148(1).
Q15. How were the cases resulting from search and seizure and requisition assessed?
Ans. The cases resulting from search and seizure and requisitions are now included in separate chapter XIV-B under the head ‘Block Assessment’..
Q16. Whether AO is required to carry out inquiry before issue of notice under section 148?
Ans. It is no longer provided in the proposed provisions of section 148A. But the AO may carry out an inquiry u/s 148A, if it is required to determine whether the case involves escapement of income.
Q17. Whether any show cause notice is required to be issued to the assessee on the basis of information available with the AO?
Ans. It is specifically provided u/s 148A(2). The AO is required, on the basis of information available with him to issue show cause notice to the assessee as to why it is not a fit case to issue notice u/s 148
Q18. Whether any order is required to be passed before issue of notice under section 148?
Ans. Yes. The AO is required to consider information available with him and reply received from the assessee and pass a speaking order u/s 148A(3) as to whether it is a fit case to issue notice u/s 148
Q19. Whether there is any time limit to issue notice under section 148A?
Ans. Yes, three years in general cases and five years from the end of the relevant assessment year in cases where escaped income is Rs. 50 lakhs and above as specified in section 149(1).
Q20. Whether any approval is required from higher authority/specified authority before issue of notice under section 148?
Ans. Yes, the AO is mandatorily required to obtain prior approval from the specified authority while passing the order under section 148A(3).
Q21. Whether notice u/s 148(1) cannot be issued after lapse of four years from the end of relevant assessment year?
Ans. Generally, notice under section 148(1) cannot be issued after three years from the end of the relevant assessment year. However, an extended time limit of 5 years is allowed under certain specific conditions, such as if the income chargeable to tax that has escaped assessment is represented in the form of an asset or expenditure exceeding ₹50 lakhs. Therefore, while the outer limit for general reassessment is three years, it may be extended in specified cases.
Q22. Whether notice u/s 148(1) can be issued after lapse of four years but before lapse of six years from the end of relevant assessment year provided income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year?
Ans. By virtue of clause (b) to section 149(1) notice u/s 148(1) can be issued after lapse of three years but before lapse of five years from the end of relevant assessment year provided income chargeable to tax which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year.
Q23. Whether for issuing notice u/s 148 (1) within limitation of section 149(1)(b), escaped income of ₹50 lakhs should be reflected from books of accounts or other documents or evidence in possession of the AO or represented in the form of asset?
Ans. Yes, for the AO to issue notice under section 148(1) beyond the three-year limit up to 5 years under section 149(1)(b), the escaped income should be at least ₹50 lakhs and it should be represented in the form of an asset (including financial interest) or expenditure. Additionally, this fact must be evident from books of accounts or other documents in the AO’s possession.
Q24. Whether notice u/s 148 can be issued after lapse of four years but before lapse of 16 years from the end of relevant assessment year provided the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment?
Ans. No. The provision is not applicable.
Q25. Whether notice u/s 148(1) can be issued after lapse of six years from the end of the relevant assessment year?
Ans. No.
Q26. Whether notice u/s 148(1) can be issued in cases where search u/s 132 or requisition u/s 132A has been executed on or before 31-03-2021?
Ans. No. Such cases are separately assessed Under Chapter XIV-B under the head Block Assessment.
Q27. Whether limitation to issue notice u/s 148(1) can be extended for certain reasons?
Ans. No. A gap of three months is statutorily provided between issue of notice u/s 148A(1) and issue of notice u/s 148.This gap of three months is presumed to be consumed in giving time to the assessee to file reply u/s 148A(2), passing of an order u/s 148A(3) and getting approval u/s 151.
Q28. Whether approval of specified authority is required u/s 151 for issue of notice u/s 148(1)?
Ans. Yes, by virtue of section 149(2) approval of the specified authority is mandatory under section 151 before issuing notice under section 148(1). The level of authority depends on the period of limitation—Principal Commissioner or Commissioner for notices within three years, and Principal Chief Commissioner or Chief Commissioner for notices beyond three years.
Q29. Whether no notice u/s 148 shall be issued after the lapse of three years unless case falls under clause 149(1)(b)?
Ans. Correct. The Finance Act, 2021 introduced a strict bar that no notice under section 148 shall be issued after three years unless the case falls under the exceptional provision of section 149(1)(b), i.e., escaped income of ₹50 lakh or more in the form of an asset or expenditure.
Q30. Whether notice u/s 148(1) can be issued by the AO after expiry of four years after end of relevant assessment year unless PCCIT/CCIT/PCIT/ CIT is satisfied on the reasons recorded by the AO that it is a fit case to issue such notice. ?
Ans No. The provision is not applicable.
Q31. Whether notice u/s 148(1) can be issued in cases not falling u/s 151(1) by the AO, who is below the rank of JCIT, only after the approval from JCIT?
Ans. No. The provision is not applicable.
Q32. Whether notice u/s 148/148A can be issued after the approval of specified authority which are PCIT/PDIT/CIT/DIT, if three years or less than three years have elapsed from the end of the relevant assessment year?
Ans. No. The provision is not applicable.
Q33. Whether notice u/s 148/148A can be issued after the approval of specified authority which are PCCIT/CCIT/PDGIT/CCIT/DGIT, if more than three years have elapsed from the end of the relevant assessment year?
Ans. No. The provision is not applicable.
Q34. Whether notice u/s 148/148A can be issued after the approval of specified authority which are Addl. CIT/Addl. DIT/JCIT/JDIT?
Ans. Yes. by virtue of section 151