The Tax Publishers

Sanction for Issuance of Notice

1. Introduction

Section 147, which corresponds to section 34 of the 1922 Act, provides the procedure for bringing to charge the income which may have escaped assessment. Accordingly, if the assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess such income and also any other chargeable income which may have escaped assessment and which came to his notice subsequently. Section 147 also provides the time limit during which such action may be taken by the assessing officer. This is the present form of section 147.

Before substitution by the Direct Tax Laws (Amendment) Act, 1987 and Act 1989, w.e.f. 1-4-1989, the language of section 147 was, however, entirely different. The above provisions of section 147 are subject to sections 148 to 153 of the Act.

Reassessment provisions are an important instrument in the hands of revenue to bring to tax incomes which, for reasons which may or may not be attributable to the assessee, had escaped assessment. In other words, reassessment provisions are for the benefit of the revenue and not for the benefit of the assessee. The provisions are aimed at ensuring that an assessee cannot get away by wilfully making a false or untrue statement at the time of the original assessment and when that falsity comes to notice, to turn around and say you accepted my lie, now your hands are tied and you can do nothing.

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