Page 29 - Union Budget, 2022

Union Budget, 2022

Rationalisation of Provisions relating to assessment and reassessment
• Sec 148A inserted vide FA 2021, gave powers to AO (before issuing notice u/s 148) to conduct enquiry,
issue show cause notice (SCN) to assessee and then determine upon the need for issuing notice for income
escaping assessment. Further, such enquiry can be made with prior approval of specified authority.

• As per existing Sec 148, notice for income escaping assessment should be issued with prior approval of
specified authority. However, it is proposed to amend the provision to provide that the same is not
required if previously approval was obtained under Sec 148A before enquiry.
• Further, it is now proposed to provide that prior approval is not required for issuing SCN to the assessee
pursuant to enquiry after prior approval under Sec 148A.
• Additionally, it is proposed to provide that such powers in Sec 148A is not exercisable if information was
called or powers exercised under regular provisions (Sec 133, 133B, 133C, 135) as per the process under
Faceless Scheme.
• New Sec 148B is proposed to be inserted to provide that no order of assessment/ reassessment/
recomputation consequent to search, survey and requisition, shall be passed by an AO below the rank of
JC, except with prior approval of AC or AD or JC or JD. Hence, Asst. or Deputy Commissioner and an
Income-tax officer cannot pass the aforesaid orders.
• Exclusion of time period delayed due to search or requisition made, for the purpose of completion of
assessment, is now capped to a maximum of 180 days.
• Re-opening of assessment is possible now in the following instances when AO receives information of:
o Any audit objection
o Any information received from a foreign jurisdiction under an agreement or directions contained
in a Court order
o Any information received under Faceless Scheme
• Notice u/s 148 can be issued after 3 years but not prior to 10 years from the end of relevant AY if income
is represented as following and is Rs.50 lakhs or more:
o Form of asset or
o Expenditure in relation to a transaction, event or occasion and (newly inserted) or
o Entry in books of account (newly inserted)
• Further, if income escaping assessment is in the form of asset or expenditure as aforesaid and the
investment in such asset or expenditure was made or incurred in more than one PYs relevant to the AYs
within the period mentioned above, notice u/s 148 shall be issued for every AY.
• Penalty u/s 271AAB can now be imposed by the AO or CIT(A) if the stipulated amount of tax and interest
(disputed or not) is not made within the specified date for filing ROI, on issue of notice u/s 148.

1 April, 2022
st

The scope of the Revenue audit and inquiry are being expanded so as to keep tax evasion within its limits.
Further, India is also propelling towards a seamless direct tax litigation cycle, thereby reducing compliance
costs and lengthy timelines for crystallization of final tax liability.

Amendment in provisions of Dispute Resolution Committee (DRC)

Sub-section 2A is proposed to be newly inserted in Sec 245MA to enable the AO to pass an order based on
the directions received from the DRC, within 1 month from the end of the month in which order is received
from DRC. A taxpayer would now have an option to choose DRP either under the existing Sec 144C or the

newly inserted Sec 245MA(2A).

AY 2023-24 and subsequent AYs.

The proposed amendment casts the responsibility on the AO to issue the final assessment order in accordance
with the directions issued by DRC, in a time-bound manner.

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