According to Income tax (IT) Act, an Assessing Officer of the Tax Department has the power to assess, reassess or recompute the total income of any person, if the officer has sufficient cause to believe that the income chargeable to tax exceeds the assessment to any person. Saved from last assessment years.
After this, a notice is issued by the department to the person under section 148A of the Act.
The notice contains information that Income has escaped assessment chargeable to tax.
The Assessing Officer will also have to give information in support of his claim.
Before issuing a show cause notice, an Assessing Officer has to make an inquiry with the prior approval of the Designated Authority in respect of information which shows that income chargeable to tax has evaded assessment.
Under section 148A, the assessee gets an opportunity of being heard by the officer.
The assessee shall be required to give not less than seven days but not more than 30 days to an Assessing Officer for furnishing his explanation. After considering the reply, the Assessing Officer decides whether it is a fit case for issuing notice.
As per the time limit clause, in normal cases, notice cannot be issued after three years have elapsed from the end of the relevant assessment year.
However, notice beyond the period of three years can be taken only in certain exceptional cases. Further, in specific cases where there is evidence of any taxable income of at least 50 lakh has deferred assessment, notice may be issued beyond a period of three years but not exceeding a period of 10 years from the end of the relevant assessment year.
For taxpayers, section 148A provides much needed relief, as tax cases were reopened without first informing the assessee. Experts suggest that taxpayers should do due diligence and check their tax records carefully before responding to the notice. They should not even try to evade notice.
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