The Income Tax Department has recently issued an updated timeline for tax notices, detailing the deadlines and procedures for assessments and reassessments under various Sections of the Income Tax Act, 1961.
This provides taxpayers with a clear understanding of when they might receive notices and how long the department has to complete the necessary assessments.
Under Section 143(1) – Summary Assessment, the Income Tax Department has 9 months from the end of the financial year in which the Income Tax Return ( ITR ) is furnished.
Section 143(3) – Scrutiny Assessment involves a more stringent timeline. A scrutiny notice must be issued within three months from the end of the financial year in which the return is filed, with the assessment completed within 12 months from the end of the relevant Assessment Year (AY).
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For an updated return, this 12-month period begins from the end of the financial year in which the updated return was submitted. For instance, a scrutiny notice could be issued by June 30, 2025, with assessment completion by March 31, 2026.
Section 147 – Re-assessment pertains to cases where income is suspected of escaping assessment. Timelines differ based on the date: for assessments up to August 31, 2024, notices can be issued within three to ten years from the relevant AY.
After September 1, 2024, notices under Sections 148 and 148A will be issued within three years and three months or five years and three months, with reassessments completed within 12 months from the end of the financial year when the reassessment notice is served.
Under Section 144 – Best Judgment Assessment, assessments must be completed within 12 months from the end of the Assessment Year when income was first assessable.
For Fresh Assessments, the timeline to complete is within 12 months from the financial year’s end in which the order was received or passed.
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When giving effect to appeal results, the time frame to complete is within three months from the end of the month in which the order was received or passed.
If an assessment concerns partners following a firm’s assessment, it must be completed within 12 months from the end of the month in which the firm’s assessment order is passed.
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