In certain cases, the taxpayers’ income might have escaped assessment owing to non-disclosure or simply missing out. To deal with such cases, the income tax law has special provisions to deal with incomes escaping assessment. Section 148 of Income Tax Act, 1961 (ITA) empowers the Assessing Officer (AO) to issue a notice to a taxpayer whose income has escaped assessment, also known as income escaping assessment. Let’s understand in detail what does Section 148 state and how to reply to section 148 notice.
The time period for notice under Section 148 of income tax act is as follows:
The notice u/s 148 must be accompanied with Order u/s 148A(d) of the Act requiring the assessee to furnish a return of income within a period of 3 months from the end of the month in which the notice is being served to the assessee. This return shall contain all the necessary information as prescribed and it shall be treated as a return filed under section 139.
However, the notice under section 148 of income tax act can be issued only when the assessing officer has sufficient information that suggests that the certain income chargeable to tax has escaped assessment and such AO has obtained prior approval from the specified authorities to issue such notice.
Following is the information that should be in possession of the AO to issue notice under section 148/148A:
In case of search, survey or prior approval of the competent authority that money, bullion, jewellery or other valuable article or books of account, documents seized are belongs to the assessee, then, it will be deemed to have information which suggest income has escaped assessment.
If you receive a notice under Section 148 of income tax act, it is important to respond to it promptly. The taxpayer must reply to notice under section 148 within the specified time period which is usually 30 days of the date of its receipt. If the taxpayer does not respond to the notice, the AO can proceed to make an assessment of the escaped income. The taxpayer will then have the right to appeal against the assessment order. The following are some tips to respond to a notice under Section 148 of income tax act:
If you disagree with the notice, you can furnish all the necessary evidence to prove that the income has not escaped assessment. If an adverse assessment order has been passed, then you can appeal to the Commissioner of Income Tax (Appeals) or the Income Tax Appellate Tribunal (ITAT).
Section 148 of income tax act is an important provision of the ITA that gives the AO the power to assess escaped income. If you receive a notice under Section 148, it is important to respond to it promptly and to gather your evidence to support your case. If you disagree with the notice, you have the right to appeal against the assessment order. However, it is important that you hire professionals to liaison with the income tax department and concerned tax officers to avoid any mistake. In case you need any assistance in relation to Section 148 notice and reply, feel free to contact the ASC Group.
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