The proposed provisions with respect to reassessment of income have made substantial changes to the existing law contained in section 148, 148A, 149 and Section 151 of the statute. Some of them are briefly summarised hereinafter:
Assessment of search cases has been carved out of the ambit of the reassessment provisions and the same are proposed to be enacted in chapter XIV-B of the Act. The reason being given to exclude assessment of search cases does not seem convincing as the necessary provisions could have been created in the proposed section with respect to initiation and assessment of search cases together under a separate timeframe. In any case in our humble submission separate assessment provisions for search cases were not warranted and the same may result in overlapping issues and litigation.
The timeline of 10 years under the existing laws has been reduced to 5 years and 3 months in case of income escaping assessment is ₹ 50 lakhs or more. The general timeline of income escaping assessment of less than ₹ 50 lakhs has been changed to 3 years and 3 months.
Under the proposed law, Additional or the Joint Commissioner or Director have been authorised to give approval with respect to reassessment and the earlier provisions with respect to approval by the Principal Commissioner or the Principal Chief Commissioner have been done away with.
The jurisdictional powers have been delegated substantially to the assessing officer for various actions, restricting the same to only two prior approvals which are also from the Additional Commissioner or the Joint Commissioner or Director as the case may be.
Under the proposed law the prior approval is required only with respect to:
- Pass orders under section 148A(3) or
- Issue notice under section 148 without going through the process in accordance with section 148A in case of information received by the assessing officer is germinating from section 135A of the act.
Timelines have been provided for issue of notice under section 148A(1) as well. Wherein the notice can be issued within a period of 3 years and the same stands extended to 5 years in case the income escaping assessment amounts or likely to amount to ₹ 50 lakhs or more on the basis of certain documents and information in possession of the assessing officer.