As the deadline for reassessing old Income Tax Returns (ITRs) approaches, individuals should be aware that they may receive a notice under Section 148 of the Income Tax Act if their income has escaped assessment. This is particularly relevant for those with escaped income of ₹50 lakh or more for the assessment year (AY) 2018-19 or later. The critical deadline to watch for is August 31, 2024.
The Finance Bill 2024 introduced significant amendments to Section 148A of the Income-Tax (I-T) Act, including new time limits for issuing notices. Specifically, for cases where the income escaping assessment is ₹50 lakh or more, the notice under Section 148A must be issued within five years from the end of the relevant assessment year. Following this, a notice under Section 148 must be issued within five years and three months from the end of the assessment year. These changes are set to take effect on September 1, 2024.
Under the existing provisions, the reassessment notice for AY 2018-19 could be issued up to ten years from the end of the relevant assessment year, meaning until March 31, 2029. However, with the new amendments, this time limit has been shortened to June 30, 2024. Therefore, to adhere to the new timeline, any notices under Section 148A or 148 must be issued by August 31, 2024.
Starting September 1, 2024, assessments for AY 2018–19 will be time-barred. Therefore, if an individual has escaped income of ₹50 lakh or more for AY 2018-19, they should be prepared to receive a notice under Section 148 or an order under Section 148A by August 31, 2024.
If you receive a notice under Section 148A, it’s essential to verify whether it was issued within the prescribed time frame.
Begin by checking if the Assessing Officer has provided reasons for issuing the notice under Section 148. If the reasons are not included, request a copy from the Assessing Officer.
You have 30 days to respond to the notice. You can either file a return or submit a written reply with all necessary details and supporting documents.
If you agree with the Assessing Officer’s reasons, promptly file your return. If you’ve already filed, send a copy to the Assessing Officer.
Ensure that all your income and expenses are accurately declared in your return to avoid any penalties.
If you believe the notice is invalid or the reasons for reopening the assessment are unjustified, you can challenge it before the Assessing Officer or escalate the matter to higher authorities.
If your challenge is successful, the court will halt the assessment proceedings. If not, the Assessing Officer will proceed with the reassessment.
As the August 31, 2024, deadline looms, it’s crucial for taxpayers to be vigilant. If you suspect your income may have escaped assessment, especially for AY 2018-19 or later, be prepared to respond promptly to any notices you may receive.
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