Income tax notices: Several types of notices are issued by the Income Tax Department to the taxpayer, in which some information is asked from the taxpayer or he is asked to fill the income tax return.
The Income Tax Department issues a notice to the taxpayer for one reason or another, which is responded to by the taxpayer in the time limit specified in the notice, otherwise the taxpayer may have to pay interest and penalty.
The taxpayer should respond to the notice received from the Income Tax Department after consulting an expert. Ignoring the income tax notice can cause problems for the taxpayer.
Income tax notices issued by the Income Tax Department are covered in different sections. Which should be answered according to the provisions of Relevant Section.
In today’s article (income tax notices) we will know about the notice issued by the Income Tax Department in section 148, which is assessed in section 147. It is also known as income escaping assessment.
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What is income tax notice issued in section 148
When the Assessing Officer (A .O) has full reason to believe (Reason to Believe) that a taxpayer’s income has been exempted from tax in earlier years, he issues a notice to the taxpayer under section 148.
A notice under section 148 cannot be issued to the taxpayer merely because the taxing officer is in doubt or has a second opinion, but the taxing officer must have complete proof of it.
Before issuing the notice to the Assessing Officer, the reasons for its issuance should be mentioned.
If the notice issued to the taxpayer is invalid, then the taxpayer can file a petition in the High Court.
When will any income be deemed to be exempt from income tax – section 147
According to the provisions of section 147, income will be deemed to be exempt from tax in the following cases –
- If no return has been filed by the taxpayer in the previous year while the total income of the taxpayer or other person for whom the taxpayer is inaccessible was more than the basic exemption limit .
- Income tax return has been filed by the taxpayer but the taxpayer showed less income in the return or set off more loss or claimed more deduction, allowance or relief claim.
- Assessment of taxpayer has been done in earlier years, but taxpayer’s income is assessed less in that assessment or if more loss, depreciation or other allowances are allowed, then in this case taxpayer can be assessed again.
- Assessment has been done in the first year but the income tax calculation is done at a lower rate, eg, the income from agriculture is required to be reported in the income tax return, but the taxpayer did not report the agricultural income in the return Due to which the income tax has been calculated at a lower rate, even then an income tax notice can be issued in section 148.
- Any person has a bank account or any other property outside India which is not shown by him in the income tax return.
- If a person has financial interest in any of the entities outside India, which has not been shown by him in the income tax return.
- Regarding the international transaction done by the taxpayer, section 92e has not furnished the transfer price report or the transaction has not been shown in the report.
- In relation to any of the transactions mentioned above, if the assessing officer has reason to believe in it, the taxpayer may issue a notice under section 148.
Time Limit for issuing income tax notice under section 148
Income tax notices issued by the Assessing Officer remain valid only when issued within the stipulated time frame.
Whenever a notice is issued to the taxpayer, the taxpayer should first check the time limit of the notice and find that the notice is within the time limit.
The notice issued in section 148 should be as per the time limit given in section 149, according to which 4 years before the end of the respective assessment year of the financial year in which the taxpayer has been given notice by the assessing officer. Notice can be issued in cases.
For example, if you are being given a notice in section 148 in March 2020, it will be a notice given in the Financial Year 2019 -20. Which will be the related assessment year 2020-21. That is, in case of 4 years old before assessment year 2020-21, you can be given income tax notice.
But income lost from tax (income which has not been taxed earlier) Rs. If it is more than 1,00,000 then this limit will be 6 years instead of 4 years.
If the taxpayer has any assets outside India or has financial interest in any of the entities outside India, the Assessing Officer (AO) can issue notice in the cases up to 16 years before the relevant assessment year ends. That is, in this case, the assessing officer can also open a 16-year-old case.
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