Income Tax Notice- Income Tax Department usually sends reassessment notices for the previous year around March. But now in the budget, the maximum period for reassessment has been reduced to five years.
Income Tax Notice: The deadline for filing income tax returns has ended. Now income tax notices can come in quick succession in the next one month. This will be a rule changed by the government regarding tax. According to the revised rules announced in the budget, if the amount hidden by the taxpayer is more than Rs 50 lakh, then the tax officers can recheck only five years old records of the taxpayers. Till now this period was ten years. Similarly, if the amount hidden is less than ₹ 50 lakh, then the tax officers can only investigate three years old cases. The new rules will come into effect from September. It is feared that due to the new rules of reassessment, many people may be out of the tax net. That is why now the tax officers have time till 31 August to send tax notices in old cases.
The Income Tax Department usually sends reassessment notices for the previous year around March. But now in the budget, the maximum period of reassessment has been reduced to five years. So now they will have to scrutinize the data of tax and income mismatch for the financial year 2013-14 to 2017-18 in the next few weeks and if any irregularity is found, they will have to send notices by 31 August at any cost. If they fail to do so, then due to the implementation of new rules on September 1, they will not be able to send notices to the taxpayers regarding five-year old cases.
Notices are sent under Section 148 and 148A
According to a Times of India report, the Income Tax Department prepares reassessment cases based on inputs from banks, property registrars and investigation wings. The department sends reassessment notices under Section 148 or 148A of the Income Tax Act. The law gives taxpayers the right to present their case. An association of tax officials said in a memorandum to the CBDT chairman that it would be impossible to send a large number of notices within a period of one month. This process cannot be completed by the end of August. The officials have requested the CBDT to extend the date of implementation of the new rules.
There may be a flood of notices
Ashish Mehta, partner of law firm Khaitan & Co, said that there may be a flood of reassessment notices in August. These notices may be for assessment year 2018-19 and earlier. Mitil Chokshi, partner of CA firm Chokshi & Chokshi, said that limiting the period of reassessment to five years is a good decision. This will reduce litigation and provide relief to the common taxpayer. If the Income Tax Department feels that this may lead to a real loss of income, then the government should make strict criteria to prevent tax evasion and make a provision to allow some cases to be reopened.
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