Reopening of Assessments U/S 147 with Notice U/S 148A(b)

A Summary About Reopening of Assessments

The statute is applicable to the reopening of assessments w.e.f. 1st April 2021 would have been revised by the Finance Act 2021. The related sections are sections 147 to 151.

The article describes:

The Salient Components of the New Law
Time Limit for Completing the Reassessment
What should we accomplish when we obtain Notice u/s 148A(b)

Important Features of New Tax Law

The phrase “reason to suspect that any income has avoided assessment” is not used in Section 147. As a result, there is no basis to conclude that any income has avoided assessment.
No issuance of notice is there till there is information that recommends that income has escaped assessment
Explanation 1 and Explanation 2 inserted in section 148
Explanation 1 to section 148 furnishes the legal definition of “information which proposes that the income has escaped assessment”.
Explanation 2 concerns, in cases of investigation and requisition NO data as specified in Explanation 1 to section 148 is needed via the AO to issue notice u/s 148.
Section 148A talks about performing inquiry and providing an opportunity before issuing notice u/s 148
The time limit for issuing notice u/s 148:-
- General Cases-3 years
- Where income escaped in the form of asset/expense/entry is more than Rs. 50 lakhs – 10 years
- There is no separate category for the undisclosed foreign asset.

Accurate Time Limit of Reassessment for Finishing

In which the notice u/s 148 is served on or after the 1st April 2019, No order of assessment, reassessment, or recomputation is to be incurred u/s 147 post the lapse of 12 months from the finish of the fiscal year in which the notice u/s 148 was served.

What Requirements Done if we Receive Tax Notice u/s 148A(b)

AO should issue the notice.
Find out if the notice is concerned with Assessment year 2016-17 and forthcoming years then the reason by virtue of the initial proviso to the new section 149, reopening of the assessment for any assessment year before AY 2016-17 is within the time limitation and poor in law. Thus beneath the latest statute, the notices u/s 148 read with section 148A(b) need to be in relation to AY 2016-17 and for subsequent years.
Validate that the data furnished via the AO accompanied by the notice u/s 148A(b) would satisfy the stated definition.
Examine if the Notice has been duly authorized by the required authority, as indicated in section 151.
Check to see if you gave yourself at least 7 days to answer the Notice.
In your response, you must address any concerns about the notice, if there is any error or flaw. Based on the merits of the matter, you should present your full submission and request that the AO have a personal hearing before passing the decision under Section 148A. (d).