Today we will discuss how one should go about to respond to Notice under section 148 of Income Tax Act India?
Notice under section 148 can be issued within 4 years from the end of relevant assessment year if the income escaped does not exceed one lakh rupees. If the income escaped is one lakh rupees or more the notice u/s 148 can be issued within 6 years from the end of relevant assessment year subject to the provisions of section 151. The notice under section 148 can be issued within 16 years from the end of the relevant assessment year if the income which has escaped assessment is related to assets ( including stocks, bonds, other digital assests) that is located outside India. You need to ensure that the notice is issued within time lines.
The most important thing to keep in mind here is to not take this notice lightly. If the tax department has sent you the notice u/s 148, please take the following actions quickly:
Check the notice for reasons to believe as recorded by the AO for issue of income escaping assessment notice u/s 148. In case if notice does not have the reasons mentioned in it, then you can request the AO to send you the copy of recorded reasons.
If you are satisfied with the reasons to believe as recorded by AO, file your income tax return as soon as possible. If you had already filed the relevant return, send its copy to the AO.
If you are filing the return in response to the notice issued u/s 148, make sure you file it after due diligence declare all your income and expenses carefully. If you miss reporting the income correctly then it can result in huge penalties.
In case if you feel that the notice is not validly served or the reasons provided by the AO for opening the assessment u/s 147 are not proper then you can challenge the validity of the notice sent to you before the AO or higher authority as the case may be.
If you win this case, the Court will halt the assessment proceedings. However, if the decision goes in the favour of the AO, then he can proceed with the reassessment of your case.