The deadline for reassessment of old Income Tax Returns (ITRs) is approaching. By August 31, individuals may receive notices under Section 148 of the Income Tax Act if their income has escaped assessment, particularly if the escaped income is ~50 lakh or more for the assessment year (AY) 2018-19 or later.
What has Budget 2024 proposed?
The Finance Bill 2024 proposed amendments to Section 148A of the Income-Tax (I-T) Act, establishing new time limits for issuing notices.
For income escaping assessment of ~50 lakh or more, the Section 148A notice must be issued within five years from the end of the assessment year. Notices under Section 148, following a Section 148A notice, have a maximum time limit of five years and three months from the assessment year-end. These changes will take effect from September 1, 2024.
Therefore, for AY 2018-19, as per the existing provisions, the notice under section 148 for the reopening of assessment could have been issued up to ten years from the end of the relevant assessment year, i.e., March 31, 2029.
However, the time limit for the same has been reduced i.e. up to June 30, 2024, as per the proposed provisions effective from September 1, 2024. Therefore, the time limit for notice to be issued under Section 148A and 148 would be August 31, 2024,
Experts said, “Starting from September 1, assessments for AY 2018–19 will be time barred. In the instance of an income escaping assessment of ~50 lakh or more for AY 2018–19, the prescribed deadline for issuance of a notice under Section 148 or an order under Section 148A is August 31, 2024.”
“Upon receiving a notification under Section 148A, it is essential for the recipient to verify if the notice was issued within the prescribed time frame,”
Who can receive notice under section 148
If the income that escaped the assessment is ~50 lakh or more and it relates to AY 2018-19 or later, then it is likely that you will get a section 148 notice by August 31, 2024.
Expert suggests how to respond to a notice under Section 148:
Review the notice: Start by checking if the Assessing Officer has provided the reasons for issuing the notice under Section 148. If the reasons are not included, you should request a copy from the Assessing Officer.
Respond promptly: You have 30 days to respond to the notice. This can be done by filing a return or submitting a written reply with all the necessary details and supporting documents.
Agreeing with the notice: If you agree with the reasons provided by the Assessing Officer, promptly file your return. If you’ve already filed, send a copy of it to the Assessing Officer.
Accurate filing: When filing a return in response to a Section 148 notice, ensure that all your income and expenses are accurately declared to avoid any penalties.
Challenging the notice: If you believe the notice is invalid or that the reasons for reopening the assessment are unjustified, you can challenge it before the Assessing Officer or take the matter to higher authorities.
Outcome of the challenge: If your challenge is successful, the Court will halt the assessment proceedings. If not, the Assessing Officer will proceed with the reassessment.
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