Section 147 of the Income Tax Act deals with re-opening of concluded assessment proceedings. The Assessing Officer is entitled to make reassessment of Income of any assessee where an assessment has already been made earlier.
When is re-opening made?
Section 147 states that reopening of the previously assessed files under section 147 can be initiated only in cases where any income which is chargeable to tax has escaped assessment due to failure by the assessee to disclose all material facts honestly.
Notice of re-assessment:
The Assessing Officer is supposed to initiate proceedings under section 147 of the Act after issuing a notice under section 148 of the Income Tax Act.
A notice under section 148 is to be issued after recording reasons for issuing such a notice.
Time limit for issuing notice:
For giving the notice of reassessment under section 148 of the Income Tax Act the time limits are provided in section 149 of the Act. The time limit is as follows –
(i) 4 years from the end of the assessment year in case the income which escaped assessment is less than Rs. 1 lac.
(ii) 6 Years from the end of the assessment year in case the income which escaped assessment is more than Rs. 1 lac.
where an assessment is completed earlier under section 143(3) or under section 147 of the Act, then no notice under section 148 shall be issued after the completion of 4 years from the end of relevant assessment year in case the assessee has filed return of income under section 139 of the Act or by giving reply to a notice given under section 142(1) or section 148 and has disclosed all the facts required for assessment.
Controversies arising out of some notices:
A vital issue which has been raised since a long time is that whether any writ petition is maintainable against a notice issued by the Assessing Officer beyond the prescribed time period where the assessment has been completed by the officer.
It is commonly observed that the assessing officers are ignoring the provisions of law and issuing notice violating the intention of the statute.
Recently the courts have given orders quashing those notices which are given out of jurisdiction. The Delhi High Court has pronounced a judgment in the case of CIT v. Purolator India Limited ITA No. 489/2011 dated 28.11.11 stating that when the assessee had provided all the necessary information, the Assessing Officer is wrong in issuing notice under section 148 of the Act after 4 years from the end of said assessment year according to the second proviso of section 147 when a regular assessment was already made under section 143(3) of the Act.
