Tax Publishers

Procedure before issuance of notice under section 148

CA V.K. Subramani

The Finance (No. 2) Bill, 2024 proposes to substitute section 148A and a close look at the provision would show the changes proposed.

As per section 148A(1) where the assessing officer has information which suggests that income chargeable to tax has escaped assessment, he shall before issuing a notice under section 148 provide an opportunity of being heard to the assessee. This is sought to be achieved by serving a show cause notice as to why a notice under section 148 should not be issued by giving information which suggests the income chargeable to tax has escaped assessment for the relevant assessment year.

As per section 148A(2), on receipt of notice referred above, the assessee has to furnish his reply within such period as may be specified in the notice. As per sub-section (3) of section 148A the assessing officer on the basis of material available on record and after taking into account the reply of the assessee furnished in pursuance of notice issued under section 148A(2), pass an order with the prior approval of 'specified authority' determining whether it is a fit case to issue notice under section 148 or otherwise.

The provisions of section 148A would not apply in respect of income chargeable to tax escaping assessment for any assessment year where the assessing officer has received information under the scheme notified under section 135A. Thus, information under the scheme notified under section 135A shall not be sufficient for invoking section 148A.

The 'specified authority' is the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director, for the purpose of approving the order of the assessing officer whether to proceed with the issue of notice under section 148 or not, referred to in section 148A(3).

Readers may note the Faceless collection of information specified in section 135A. In pursuance thereof e-Verification Scheme, 2021 vide Notification S.O. 5187(E), dated 13-12-2021 is now in place.