I-T department set to complete 170,000 reassessments by next March 2025
Income Tax department could complete by March 2025 reassessments of 170,000 notices issued between March 2021 and March 2024 for undisclosed income in past assessment years.
Central Board of Direct Taxes (CBDT) had reopened cases of about 600,000 individuals during the said 3-year period for a mismatch in income disclosed in tax returns versus information available with the department. Of this, assessments have been completed in about 430,000 notices and orders have also been passed on them, a senior official with direct knowledge of the matter told.
The amount involved could not be ascertained though rough estimates indicate that it could be over a thousand crores of rupees.
These notices are for different assessment years, from 2014-15 to 2022-23. Some of these were getting time-barred also,” the official said on condition of anonymity.
The aforementioned notices were issued under Section 148 of the Income Tax Act that deals with reopening of past assessment. Majority of the total reassessment notices were issued to individuals with income above Rs 50 lakh, he added.
Under Section 148, an I-T officer could review cases of income evasion going back six years. Under Section 148A (added by the Finance Act, 2021), cases that have been over a decade old can be reopened, provided that the income that has escaped assessment exceeds Rs 50 lakh.
However, for cases below Rs 50 lakh, notices cannot be issued if three years have passed since the end of the relevant assessment year. According to the guidelines provided by the CBDT, the existing financial limitations would remain in place when reopening evaluations from prior years.
Following the issuance of reassessment notices, an assessing officer reassess a taxpayer's I-T return, if s/he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. In 2022, the Supreme Court ruled in favour of the I-T department and upheld all reassessment notices issued on/after April 1, 2021 — reopening assessments going back up to six years.
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