What factors should be taken into account before issuing the notice under Section 148?

According to Section 148 of the Income Tax Act, in case a person’s taxable income has evaded the ITD’s review, an assessing officer will allocate a notice to furnish the proper documentation to show that they are in compliance with tax laws.

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know about: 139 5 of income tax act

Section 148 of Income Tax Act: What is it?

If a taxpayer’s income escapes the computation by any chance, an assessing officer will surely notify the taxpayer under section 148 of the Income Tax Act. Also, some records are compulsory in this case.

Returns of income tax for an assessee
Income tax return of a person other than the assessee

Remember that an assessee must provide the income tax returns within 30 days. The deadline mentioned in the notification will also be accepted to introduce those documents.

See also about: section 143(2) of income tax act

Who issues a notice under Section 148?

Here are some points that will help to understand who is qualified to issue a notice under this section.

An assessing officer with a lower rank than the deputy commissioner must be qualified. Only if a Joint Commissioner permits the justification of the Assessing Officer, then the Assessing Officer can issue the notice without any legal issue.

If the time is more than four years after the end of the intended assessment year, then the assessing officer will not be qualified to issue a notice under section 148. Only if a principal chief commissioner finds the reasons and justifications are good to go, then the assessing officer can go further to issue a notice.

know about: Section 142(1)

What factors are important and should be taken into account before issuing the notice under Section 148?

The assessing officer will follow a few factors when issuing a notice to the taxpayer.

The assessor will issue a notice stating that the taxpayer’s taxable income escaped assessment for that assessment year based on actual confirmation.

The assessing officer is instructed to provide written notice prior to sending the notice. Allegations of income tax evasion must be justified in this decision.

Suppose the taxpayer submits the required documents and additional information to complete the reassessment or assessment. In this case, the Evaluation Officer cannot issue a notice of non-consent.

The AO may issue a notice if it finds new information in addition to the information provided.

Taxpayers may not disclose information about their taxable income. In this case, Sections 148 and 147 of the Income Tax Act authorise the AO to issue notice to that person.

What is the time limit within which the AO can issue the notice?

The time frame plays an important role in issuing a notice under section 148.

Section 149 provides that if an individual has lost taxable income of Rs 1,00,000, the assessor may give notice within four years from the end of the applicable tax year.

If the taxpayer has avoided their taxable income exceeding Rs 1,00,000, the reassessment is valid for three years after the end of the relevant assessment year. The officers will issue this notice in accordance with the provisions set forth in Section 151.

The assessment is valid for up to 16 years if the person derives income from assets located outside India.

An AO may not issue a Section 147 determination to a taxpayer if a new assessment or assessment has been made under Section 147 or Section 143(3) and four years have passed after the end of the assessment year. Notifications can be sent for the following reasons:
- A taxpayer fails to submit their income tax returns as per Section 139, 148, or 142(1); or,
- Any person who fails to disclose factual information necessary to assess a taxpayer’s valuation.

FAQs

What is Section 148 as per Income Tax Act?

Section 148 mandates an AO the ability to either assess or reassess any taxable income that may have gone under the radar and has not been considered as per the prescribed procedures of the Income Tax Act.