Section 148 Income Tax Act 1961 of India as Amdnended by Finance Act 2022
Section 148 Income Tax Act is for Issue of notice where income has escaped assessment.
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Summary of Section 148 Income Tax Act
- Section 148 Income tax is used for issue of notice where income has escaped assessment.
- The Assessing Officer shall, before issuing any notice under section 148, conduct the enquiries and provide the opportunity of hearing to the taxpayer as per Section 148A Income Tax Act w.e.f 01.04.2021.
- Section 148 Income Tax Act is substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section 148 is given in Notes 1 below.
- For Section 148 Income tax You also needs to refer
- Order F.No. 225/40/2021/ITA II, dated 4-3-2021 (Instruction regarding selection of cases for issue of notice u/s 148) and
- Order F.No. 225/40/2021-ITA II, dated 15-3-2021 (Instruction regarding selection of ‘Potential cases’ for issue of notice under section 148 and rationalisation of workload in International Taxation Charges).
- Second Provisio in Section 148 of Income tax is Inserted by the Finance Act, 2022, w.e.f. 1-4-2022.
- In Explanation No 1 of Section 148 Income Tax , Clauses (ii) to (v) substituted for clause (ii) by the Finance Act, 2022, w.e.f. 1-4-2022. Prior to its substitution, clause (ii) was as given in Note 4 below .
- In Explanation No 2 of Section 148 Income Tax, in Clause (ii) Words “or sub-section (5)” omitted by the Finance Act, 2022, w.e.f. 1-4-2022.. Refer Note 5 below.
- In Explanation No 2 of Section 148 Income Tax, Words “where ” is Substituted for “for the three assessment years immediately preceding the assessment year relevant to the previous year in which” by the Finance Act, 2022, w.r.e.f. 1-4-2021. Refer Note 6 below.
Section 148 Income Tax Act
1[Issue of notice where income has escaped assessment.
148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:
Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice:
2[Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section.]
Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—
| (i) | any information 3[***] in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; | |
| 4[(ii) | any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or | |
| (iii) | any information received under an agreement referred to in section 90 or section 90A of the Act; or | |
| (iv) | any information made available to the Assessing Officer under the scheme notified under section 135A; or | |
| (v) | any information which requires action in consequence of the order of a Tribunal or a Court.] |
Explanation 2.—For the purposes of this section, where,—
| (i) | a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or | |
| (ii) | a survey is conducted under section 133A, other than under sub-section (2A) 5[***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or | |
| (iii) | the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or | |
| (iv) | the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, |
the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee 6[where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.
Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.]
Notes on Amendment in Section 148 Income Tax Act
- Substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section 148, as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989, Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989, Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1989, Finance Act, 2006, w.r.e.f. 1-10-1991 and Finance Act, 2006, w.r.e.f. 1-10-2005, read as under :
“*148.** Issue of notice where income has escaped assessment.—(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve† on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be††, apply accordingly as if such return were a return required to be furnished under section 139 :
Provided that in a case—
(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case—
(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.
(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.”
- Inserted by the Finance Act, 2022, w.e.f. 1-4-2022.
- Word “flagged” omitted by the Finance Act, 2022, w.e.f. 1-4-2022.
- Clauses (ii) to (v) substituted for clause (ii) by the Finance Act, 2022, w.e.f. 1-4-2022. Prior to its substitution, clause (ii) read as under:
“(ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act.”
5.Words “or sub-section (5)” omitted by the Finance Act, 2022, w.e.f. 1-4-2022.
6. Substituted for “for the three assessment years immediately preceding the assessment year relevant to the previous year in which” by the Finance Act, 2022, w.r.e.f. 1-4-2021.
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