07 May
SECTION 148A- ALL ABOUT SECTION 148A OF THE INCOME-TAX ACT
SECTION 148A- ALL ABOUT SECTION 148A OF THE
INCOME-TAX ACT
Now a lot of taxpayers have received notices under income
tax section 148A and the taxpayer does not know what to do.
However, the type of notice and more information about it
are given below article
The newly added section 148A now requires the Assessing
Officer to issue a notice if they decide to initiate a re-evaluation.
Therefore, a procedure has been laid down for the Assessing Officer under
Section 148A, which should be followed after 1st April 2021.
WHAT IS SECTION 148A AND WHAT DOES IT MEAN TO THE TAXPAYERS?
In Budget 2021, the government introduced Section 148A in
the Income Tax Act. Suppose the income tax officer is aware that the taxpayer
has escaped income for any assessment year for which tax is payable. In such
cases, the new provision requires the Income-tax officer to give the taxpayer
an opportunity to explain his case before issuing a notice. Under section 148A,
the taxpayer has the opportunity to get a hearing from the officer.
The assessee has to give the assessee no less than seven
days but no more than 30 days to give his explanation.
After evaluating the taxpayer's answer, the income tax
officer will decide whether it is appropriate to issue a notice for assessment
of income evasion. If the income tax officer decides to reopen the case, the
taxpayer must issue a copy of the order and notice (under section 148).
Under the time limit clause, notice cannot be issued under
normal circumstances if three years have elapsed since the end of the relevant
assessment year. However, notice for a period of more than three years can be
taken only if there is proof that the taxpayer has failed to assess the taxable
income of at least Rs 50 lakh. However, notice may be issued after three years
but not later than 10 years after the end of the relevant assessment year.
The Income-tax officer should seek the approval of the
specified authority before conducting any such inquiry, providing the
opportunity to the taxpayer or making such an order.
However, this provision will not apply in search or demand
cases.
HOW IS SECTION 148A DIFFERENT FROM SECTION 148 OF THE IT ACT?
Section 148 requires the Income-tax officer to issue notice
to the taxpayer if the Income-tax officer has reason to believe that the
taxpayer has avoided reporting any income in the relevant assessment year. Upon
issuance of the notice, the Income-tax authorities may, under section 147 of
the Income-tax Act, assess or re-evaluate or recalculate the total income for
such year.
However, from 1 April 2021, the income tax authorities will
now follow the procedure prescribed under section 148A of the new provisions
before issuing such notice. The new provision would require an income tax
officer to make an inquiry or provide an opportunity to hear in the context of
information indicating that the taxpayer has been exempted from taxable income
assessment. Prior approval of the specified authority is required before the
income tax officer issues such notice.
INDIVIDUAL TAXPAYERS CAN GET DIFFERENT NOTICES FROM THE INCOME
TAX AUTHORITIES
|
SR No |
Income Tax Notice |
Income Tax Provision |
|
1 |
Notice
has been issued for a faulty income tax return |
Section
139 (9) |
|
2 |
Notice
for initial inquiry before evaluation. Income tax authorities may ask for
documentary evidence to verify your claim in the ITR |
Section
142 (1) |
|
3 |
Instructions
for scrutiny of ITR (detailed scrutiny). The Assessing Officer may issue such
notice or follow up on the notice issued under section 142 (1) to confirm the
veracity and accuracy of various concessions, deductions and other claims
made by the taxpayer in the income tax return. |
Section
143 (2) |
|
4 |
Re-assessment
notice if the Income-tax officer disagrees with the previous assessment of
the taxpayer's ITR and deems it exempt from the income assessment. |
Section
148 |
|
5 |
Notice
of any tax, penalty or other payment due from the taxpayer. |
Section
156 |
|
6 |
This
notice is issued when the income tax return (full/partial) is adjusted for
the assessment year of the taxpayer's tax demand (of any previous year). |
Section
245 |
CONCLUSION
As Section 148A comes into force from 1 April 2021, any
notice issued to the taxpayer under section 148 after this date without
following the procedure under section 148A (i.e. without giving an opportunity
for a hearing) will be invalid and against the provisions as per income tax
act.
If you like the information, please like and share
Regards
Santosh Patil
ICA & MBA
Founder Alliance Tax Experts
https://g.page/alliancetaxexperts
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