Issue of notice under section 148 where income has escaped assessment

CA V.K. Subramani

The Finance (No. 2) Bill, 2024 proposes to substitute sections 148, 148A and 149. The changes are cosmetic but nevertheless have significance to students of law.

Section 148 empowers the assessing officer to issue a notice asking the taxpayer to file an ITR or the ITR of any other person in respect of whom he is assessable under the Act. Previously, the time period for filing the ITR in response to the notice was 3 months from the end of the month in which the notice was issued. Now the proposal says within such period as may be specified in the notice but not exceeding 3 months from the end of the month in which the notice is issued. Therefore, the assessing officer can give time period of less than 3 months to the assessee to file an ITR.

Sub-section (2) of section 148 says that if the return is furnished in response to a notice under section 148(1) such return would be treated as a return furnished under section 139. However, the proviso to section 148(2) of the substituted section says that if the return of income in response to notice under section 148 is filed beyond the time given in the notice, such return will not be treated as a return furnished under section 139. The impact of this is to levy interest under section 234A till the date of assessment and where the return is furnished before the date specified in the notice, such interest levy would be 'nil'.

Sub-section (3) to section 148 deals with 'information' and the substituted provision includes additionally that any information emanating from a survey conducted under section 133A on or after first day of September, 2024 shall be considered. However, survey under sub-section (2A) to section 133A (known as TDS survey) is not to be considered as information to trigger section 148.