As the deadline approaches for reassessment of previous Income Tax Returns (ITRs), a Tax Notice Under Section 148 of the Income Tax Act may be issued by August 31, 2024, to those whose income has escaped assessment. This is particularly pertinent for those whose escaped income is ₹50 lakh or more for the assessment year (AY) 2018-19 or later.
Before sending a reassessment notice, the tax officer may issue a show cause notice (SCN) to the taxpayer, providing details that suggest potential income escaping assessment. For cases involving ₹50 lakh or more, a Section 148A notice must be issued within five years from the end of the relevant assessment year. Following this, the final notice under Section 148 must be issued within five years and three months from the end of the assessment year. These new rules come into effect on September 1, 2024.
For AY 2018-19, the previous rules allowed a notice under Section 148 to be issued up to ten years from the end of the assessment year, which would have been March 31, 2029. However, the revised provisions now set the deadline as June 30, 2024, making August 31, 2024, the final date for issuing notices under Sections 148A and 148.
From September 1, assessments for AY 2018-19 will be time-barred. If the income escaping assessment is ₹50 lakh or more for AY 2018-19, the deadline for issuing a notice under Section 148 or an order under Section 148A is August 31, 2024.
Recipients of a Section 148A notice should confirm that the notice was issued within the required time frame.
Who May Receive a Notice Under Section 148
If your income that escaped assessment is ₹50 lakh or more, and it pertains to AY 2018-19 or later, you may receive a Section 148 notice by August 31, 2024.
Expert Tips on Responding to a Notice Under Section 148
- Examine the Notice: First, verify if the Assessing Officer has provided the reasons for the notice under Section 148. If not, request a copy.
- Respond Quickly: You have 30 days to reply. This can be done by filing a return or submitting a detailed written reply with all relevant documents.
- If You Agree: If you concur with the reasons given, promptly file your return. If already filed, send a copy to the Assessing Officer.
- Accurate Reporting: When responding to a Section 148 notice, ensure all income and expenses are correctly declared to avoid penalties.
- Challenge the Notice: If you believe the notice is invalid or the reasons for reassessment are unwarranted, challenge it with the Assessing Officer or escalate the matter to higher authorities.
- Outcome of the Challenge: If your challenge succeeds, the Court will stop the assessment. If not, the Assessing Officer will proceed with the reassessment.
