Page 83 - DHC Budget Book 2021-22 Final

information available with him from various specified sources and is now not required to have a reason to believe that Income has escaped assessment.
— Earlier, AO was restricted to initiate reassessment proceedings only with respect to issues other than income involving matters which are subject matter of any appeal, reference or revision. However, the said restriction has also been removed in the amended provisions.
— Unlike earlier provisions, no separate provisions has been made in amended section in respect to income escaping assessment in relation to any foreign asset or financial interest outside India or issuance of notice to an agent representing non-resident u/s 163 of the Act. Hence, the time limit for the same has now been reduced to 3/10 years instead of 16 years.
— Assessment in consequence to search u/s 132 or u/s 132A or Survey u/s 133A or requisition
— Hitherto, Sec. 143(1)(a), amongst others, provided for disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return of income. Now, it is proposed to also make adjustment for increase in income reported in audit report but not considered in computing total income.
— Further, Sec. 143(1)(a) provided for disallowance of deduction claimed u/s 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return of income is furnished beyond the due date specified u/s 139(1). Vide Finance Act 2018 Sec. 80AC was amended to provide that no deduction under any provisions of part C of Chapter VI-A shall be allowed if the return of income u/s furnished beyond the due date specified u/s
proceedings shall now be completed u/s 147 w.e.f 01-04-2021.
— As per 1st proviso to amended Sec 149(1)(b), time limit shall be extended from 3 years to 10 Years, if income chargeable to tax, in the form of asset, has escaped assessment amounting to H 50 lacs or more in that year. However, the term “in the form of asset” has not been defined in the said section although from the definition as provided in Explanation 2 to 4th Proviso to Sec 153A indicates that the same relates to search cases.
But on perusal of Budget Speech it seems that the intension is to cover only serious tax evasion cases where there is evidence of concealment of income of H 50 lakh or more in a year. Due to this anomaly and in absence of definition, it is likely that there shall be dispute on above front as to whether evasion is of concealment of income or is in relation to concealment in the form of asset.
139(1). Now, consequential amendment is being proposed in Sec. 143(1)(a) for disallowance
of deduction under any provisions of Part C
of Chapter VI-A, if the return of income u/s furnished beyond the due date specified in Sec. 139(1).
— It has also been proposed to amend the provisions of Sec. 143(1) to reduce the time limit of issuing the intimation from 1 year to 9 months from the end of the FY in which the return is furnished.
— Time limit for issue of notice u/s 143(2) of the Act has also been proposed to reduce from 6 months to 3 months from the end of the FY in which the return is furnished.
7.4
Expanding the scope and reduction of time limit for processing return of income [Sec. 143(1)] [w.r.e.f. AY 2021-22]
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Others Direct Tax 81