I. Reopening of Assessment :
Section 147 to 151

“If you are losing at a game, change the game”

1. The Finance Bill 2021 vide clauses 35 to 40 and 42 to 43 made a major shift in reassessment provision. The Finance Bill has lowered the time limit for reopening of assessment to 3 years from 6 years earlier.

While for cases involving income escaping assessments amounts to or likely to amount Rs 50 lakh and above, 10 years old cases can be reopened. The Second major shift in the reassessment provision was inclusion of search assessments. In, significant changes to the taxation process, among other tax measures, the FM recommended a paradigm change to the provisions relating to “Assessment in case of search or requisition viz. Section 153A to 153D”.

The third major change is that “to disclose fully and truly all material facts” is done away with. The fourth major change is incorporation of sec 148A provision which is a replica of Guidelines rendered by G K N Drive shaft decisions of Supreme Court with certain modifications in process to be followed. Lastly the fifth major change is that reopening shall now be based on “information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment”. Explanation 1 to sec 148 provides meaning to the above phrase.

Posted on: March 1st, 2021