Amended and updated notes on section 148 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to issue of notice where income has escaped assessments
Chapter XIV (Sections 139 to 158) of the Income Tax Act 1961 deals with the provisions related to procedure for assessment. Section 148 of IT Act 1961 provides for issue of notice where income has escaped assessment.
Recently, we have discussed in detail section 147 (Income Escaping Assessment) of IT Act 1961. Today, we learn the provisions of section 148 of Income-tax Act 1961-2022. The amended provision of section 148 is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 148 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-148: Issue of notice where income has escaped assessment
Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:
Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice.
Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.
[Second proviso of section 148 newly inserted w.e.f. 1-April-2022 by the Finance Act 2022]
Explanation-1: For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—
(i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;
[Clause(i) in Explanation-1 amended(omitted) w.e.f. 1-April-2022 by the Finance Act 2022]
(ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or
[Clause(ii) in Explanation-1 amended(substituted) w.e.f. 1-April-2022 by the Finance Act 2022]
(iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or
[Clause(iii) in Explanation-1 newly inserted w.e.f. 1-April-2022 by the Finance Act 2022]
(iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court.
[Clause(iv) in Explanation-1 newly inserted w.e.f. 1-April-2022 by the Finance Act 2022]
Explanation-2: For the purposes of this section, where,—
(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or
(ii) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or
[Clause(ii) in Explanation-2 amended(omitted) w.e.f. 1-April-2022 by the Finance Act 2022]
(iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or
(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee,
the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee where the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.
[The long line amended substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2021]
Explanation-3: For the purposes of this section, specified authority means the specified authority referred to in section 151.