MUMBAI: The splendid courtroom (SC) on Monday held that Income-tax (IT) officers can not make any addition to a taxpayer’s source of revenue within the absence of any incriminating subject matter in reassessment court cases below Section 153A of the IT Act, in instances the place no review continuing is pending as at the date of the hunt. The apex courtroom has upheld the judgment of the delhi top courtroom when it comes to Kabul Chawla.
The provision (for the length coated by means of the SC’s order) was once that tests for the length of six years previous the date of seek had been to be reassessed by means of factor of understand below segment 153A. The factor ahead of the SC was once whether or not such instances might be reassessed even though no incriminating subject matter in the case of the ones years was once discovered on the time of seek.
However, the decision is a combined bag for taxpayers, because the department bench of the SC comprising Justice MR Shah and Justice Sudhanshu Dhulia added that tax officers can reopen instances below sections 147 and 148 of the IT Act.
Supreme Court suggest Deepak Joshi states it is a determination favoring taxpayers in up to no reassessment can now happen below segment 153A when there is not any incriminating subject matter discovered throughout the hunt. “The wide jurisdiction provided to tax officials under section 153A has been curtailed to the extent that the IT official cannot make use of any other information from any other source that may be in his/her possession to initiate reassessment under section 153A of completed and settled assessments.”
“However, the SC has kept the remedy of the tax department alive by stating that the power to make reassessment under Section 147/148 remains. Hence, the safeguards, conditions and procedural aspects under these sections (which were not present under Section 153A) can be used by the taxpayer in defense against any reassessment (including jurisdictional challenges),” adds Joshi.
Gautam Nayak, chartered accountant and tax partner at CNK & Associates, states while the SC rightly held that in absence of incriminating material, completed assessments would not be disturbed under the search reassessment procedure, the apex court further held that reassessment could be resorted to through the reassessment procedure under section 147/148, if the conditions therein were fulfilled. This was on the ground that the revenue would otherwise be left with no remedy.”
“Effectively therefore, the SC has held that reassessment was possible for those completed years in parallel proceedings, even without any incriminating material being found in search,” provides Nayak.
It must be famous that the SC judgment isn’t coping with new IT provisions. Joshi issues out that the regime of reassessment pursuant to searches has passed through a transformation with impact from April 1, 2021. As in step with segment 148, any seek performed on or after this date shall be deemed to have the impact of being a data that the source of revenue has escaped review for the tax respectable to mechanically start up reassessment for the former 3 review years.
“The process for reassessment in seek instances is no longer separate, however part of the reassessment process contained in sections 147-148, and reassessment is conceivable as much as a length of 10 years if the worth of undisclosed asset, expenditure or access exceeds Rs. 50 lakh,” issues out Nayak. The IT government have the ability to re-examine below sections 147-148. The SC has additionally stored this treatment alive.
The provision (for the length coated by means of the SC’s order) was once that tests for the length of six years previous the date of seek had been to be reassessed by means of factor of understand below segment 153A. The factor ahead of the SC was once whether or not such instances might be reassessed even though no incriminating subject matter in the case of the ones years was once discovered on the time of seek.
However, the decision is a combined bag for taxpayers, because the department bench of the SC comprising Justice MR Shah and Justice Sudhanshu Dhulia added that tax officers can reopen instances below sections 147 and 148 of the IT Act.
Supreme Court suggest Deepak Joshi states it is a determination favoring taxpayers in up to no reassessment can now happen below segment 153A when there is not any incriminating subject matter discovered throughout the hunt. “The wide jurisdiction provided to tax officials under section 153A has been curtailed to the extent that the IT official cannot make use of any other information from any other source that may be in his/her possession to initiate reassessment under section 153A of completed and settled assessments.”
“However, the SC has kept the remedy of the tax department alive by stating that the power to make reassessment under Section 147/148 remains. Hence, the safeguards, conditions and procedural aspects under these sections (which were not present under Section 153A) can be used by the taxpayer in defense against any reassessment (including jurisdictional challenges),” adds Joshi.
Gautam Nayak, chartered accountant and tax partner at CNK & Associates, states while the SC rightly held that in absence of incriminating material, completed assessments would not be disturbed under the search reassessment procedure, the apex court further held that reassessment could be resorted to through the reassessment procedure under section 147/148, if the conditions therein were fulfilled. This was on the ground that the revenue would otherwise be left with no remedy.”
“Effectively therefore, the SC has held that reassessment was possible for those completed years in parallel proceedings, even without any incriminating material being found in search,” provides Nayak.
It must be famous that the SC judgment isn’t coping with new IT provisions. Joshi issues out that the regime of reassessment pursuant to searches has passed through a transformation with impact from April 1, 2021. As in step with segment 148, any seek performed on or after this date shall be deemed to have the impact of being a data that the source of revenue has escaped review for the tax respectable to mechanically start up reassessment for the former 3 review years.
“The process for reassessment in seek instances is no longer separate, however part of the reassessment process contained in sections 147-148, and reassessment is conceivable as much as a length of 10 years if the worth of undisclosed asset, expenditure or access exceeds Rs. 50 lakh,” issues out Nayak. The IT government have the ability to re-examine below sections 147-148. The SC has additionally stored this treatment alive.
