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1. Initiation of re-assessment proceedings (issue of notice u/s 148) should be strictly in accordance with the cumulative conditions stipulated in sections 147, 149 & 151 of Income Tax Act, 1961, otherwise same may be void-ab-initio.

2. Accordingly, the notice u/s 148 should be issued within the timeliness specified in the section 149 and also simultaneously satisfying the conditions laid down in sections 147 & 151

3. The summary of assuming jurisdiction to commence  re-assessment proceedings are abridged here as under:-

S.No

Conditions

Timeliness for issue of Notice u/s 148

Before 4 years from end of relevant assessment year

After 4 years but before 6 years from the end of relevant assessment year

After 4 years but before 16 years from the end of relevant assessment year

1.

AO must have reason to believe that Income Chargeable to Tax has escaped assessment

Mandatory

Mandatory

Mandatory

2

Assessment u/s 143(3) or 147 has been made for relevant assessment year and the Income Chargeable to tax has escaped assessment on account of either of following reasons:-

  1. Assessee failed to file Return u/s 139
  2. Assessee failed to file Return in pursuance of Notice issued u/s 142(1) or 148
  3. Assessee failed to disclose fully & truly all material facts necessary for assessment for relevant assessment year

Not Mandatory (For example, even if assessee has disclosed all material facts during the course of assessment of relevant assessment year, It will not bar AO to issue notice u/s 148 within 4 years, if he has reason to believe that income chargeable to tax has escaped assessment)

 Mandatory

Not Mandatory

3.

Income Chargeable to Tax, which has escaped assessment for relevant assessment year amounts to or is likely to amount to Rs. 1,00,000 or more.

Not Mandatory (Irrespective of quantum of income escape assessment)

Mandatory

Not Mandatory

4.

Income in relation to any asset (including financial interest in any entity) located outside India, has escaped assessment for relevant assessment year.

Not Mandatory

Not Mandatory

Mandatory

5.

Rank of AO for issue of Notice u/s 148, where NO assessment u/s 143(3) or us/ 147 has been made for relevant assessment year

AO of any rank

a. AO of any rank below Joint Commissioner, with the approval of Joint Commissioner

b. Joint Commissioner

6.

Rank of AO for issue of Notice u/s 148, where assessment u/s 143(3) or us/ 147 has been made for relevant assessment year

a. AO of any rank below Asstt. Commissioner or Dy. Commission, with the approval of Joint Commissioner

b. AO at a rank of Asstt. Commissioner or above.

AO of any rank with the approval of Commissioner or Chief Commissioner.

       

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Category Income Tax, Other Articles by - MOHIT JAIN 



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