In a recent social media post, Ved Jain, former president of the Institute of Chartered Accountants of India ( ICAI ), highlighted concerns regarding notices issued under Section 148 of the Income Tax Act. These notices pertain to the reopening of assessments for assessment years 2014-15, 2015-16, 2016-17, and 2017-18.
Some individual taxpayers have reportedly received Income Tax Notices under Section 148, which pertains to the reopening of assessments for the financial years 2014-15, 2015-16, 2016-17, and 2017-18. Ved Jain, the former president of the Institute of Chartered Accountants of India (ICAI), the professional body for chartered accountants, argues that these tax notices are incorrectly issued because the six-year limitation period expired on March 31, 2024.
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The Ex-ICAI President pointed out that these assessments are now barred by the limitation period, which expired on March 31, 2024, as per the first proviso of Section 149(1) of the Income Tax Act.
He further suggested that these notices can be challenged through writ petitions since the statutory six-year limitation period has already lapsed. He also reassured the assessees and taxpayers that such notices issued in search cases where earlier assessments under Sections 153A/153C were quashed by the ITAT, High Courts, or the Supreme Court due to a lack of incriminating evidence are similarly time-barred. Jain encouraged affected taxpayers to file writ petitions in the High Court to get these notices quashed.
Section 148 of the Income Tax Act grants an assessing officer the authority to reassess or assess any taxable income that may have been incorrectly calculated and not previously assessed according to the provisions. Once a notice is issued under this section, the taxpayer is required to submit their income tax returns (ITR) within 30 days or within any specified period mentioned in the notice.
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Importantly, Section 148 mandates that the information provided to the assessing officer must be highly significant and not based on trivial facts. Before issuing a notice under this section, the assessing officer must document and provide written reasons explaining why they believe the taxpayer is evading income assessment.
Chirag Chauhan, a chartered accountant based in Mumbai, shared similar views, mentioning that some of his clients have also received such notices.
Ved Jain further explained, “All these notices can be contested through writ petitions and dismissed since the six-year period has already lapsed as of 31.3.2024. Similarly, notices under Section 148 issued in search cases, where earlier assessments under Sections 153A/153C were quashed by the ITAT, High Courts, or the Supreme Court due to a lack of incriminating evidence, are also time-barred and can be nullified by filing a writ before the High Court.”
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This viewpoint echoes concerns raised by other tax professionals, who have similarly criticised the issuance of these notices post the expiration of the limitation period.
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