DIRECT TAXES
| Conditions for reopening back-assessments Mon, 19 Apr 2010 |
| The Hindu Business Conditions for reopening back-assessments What are the safeguards available for a taxpayer against indiscriminate assumptions of re-assessment jurisdiction? Law lays down rigid condition for reopening a completed assessment. Where an assessee believes that jurisdiction is lacking, he can ask for the copy of the recorded reasons and the approval granted by Deputy Commissioner, Additional Commissioner or Commissioner as the case may be. On receipt of the copy, he can lodge his objections, which is required to be met by the assessing officer in writing in a speaking order. The assessee thereupon may participate in further proceedings under protest, if he is not convinced about the correctness of the assessing officer's response and take up the matter of jurisdiction along with merits in his appeal to the Commissioner of Income-tax (Appeals). He can also file a writ petition questioning jurisdiction before the High Court, after such speaking order is received and not before. This law has been set out by the Supreme Court in GKN Driveshafts (India) Ltd. v ITO (2003) 259 ITR 19 (SC). It may be noted that the law does not permit extension of time limit for filing return in response to the notice till the proceedings relating to jurisdiction are settled. The return may, therefore, have to be filed on due date with the reservation that it is subject to jurisdiction being found to be in order. There is likely loss of revenue because there is no system of scanning the returns for choice of scrutiny, so that potential cases are missed in the present system of random selection or on the basis of external information adopted for such choice. Action under Sec. 148, therefore, becomes necessary, where omissions are spotted later. Where the assessing officers do not follow the strict requirements of conditions to be complied with before issue of notice under Sec. 148, negligence on their part in this regard may cause loss of public revenue, where under-assessment cannot be set right because of the faulty procedure. |
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