Tax Assessment under Search and Seizure

Before it was usually said that all the assesses who have escaped the Income Tax for consecutive six years, need not to be worried at all as the assessing officer of the taxation department has not be indiuced power for opening such cases after a time period of six years. But with the introduction and implementation of the Finance Act, 2017, the above stated fact is no longer in operation and the act has given the assessing officer with very much power to evaluate such cases for up to ten years time period. This power has been provided under Section 153A in the case of search and seizure. The section is related and relevant to all the tax assessment performed by the assessinf officer where the case of searc and requisition exists. In cases where the search is initiated by the assessing officer under Section 132 of the Act, and a notice have been issued by the officer for the person to submit the income tax return for each of the assessment year specified, immediately after receipt of such notice. This benefit of issuing notice to the taxpayer is available to the Assessing Officer in case where he has relevant books of accounts or documentary evidences revealing any income tax escaping by the taxpayer. The amount of escaped income tax must be Rs. 50 Lakhs or more in aggregate of all the years.

 

Cases when assesses have to file return against the notice of Tax Assessment:

 

The assesses are required to file the return in response to the tax assessment notices when one of the following is there-

 

·         Assessment or the reassessment have been completed by the Assessing Officer

·         Tax assessment or the reassessment case is still pending

·         Assesses have filed the returns under Section 139, Section 142(1) and Section 148

·         Under Section 139, assesses are not required to furnish the income return forms

 

Related Articles: Analysis of E-assessment Procedure under Income Tax Act

 

Time limit for Assessment Completion:

 

Section 153B of the Finance Act, 2017 states the time limit provided for completing the tax assessment under Section 153A. Nothwithstanding any material contained in Section 153, the Section 153B prescribes the Assessing Officer to make a tax assessment or reassessment order in the following conditions-

 

·         In relation to each and every year of assessment that falls under the six assessment years of income tax escaping, within a period of two years from the end of the financial year. This fiscal year is the the one for which the authorized search under Section 132 or requisition under Section 132A has been executed.

·         In respect to the tax assessment years that is relevant to the previous year, where a search was conducted by the AO as per section 132 or a requisition was made under Section 132A. This must be within the  period of two years from the date of end of the financial year, for which an authorized search or requisition has been executed under Section 132 or Section 132A.