Repaly of Section 147A

Section 147A

Section 147 of the Income Tax Act, 1961 provides for the reopening of assessment proceedings. This section gives discretion to the Assessing Officer (AO) to reopen the assessment proceedings when he/she has reason to believe that some of the income has escaped assessment.

Every earning individual is required to file the return to the income tax department if the earning is chargeable to tax. The tax authorities examine your income tax return (ITR) and if necessary, they can seek additional clarifications. This process of examining the return of income is referred to as assessment.

under Section 147 of the ITA

For instance, anything you earned in the financial year (FY) 2023-24 is assessed in the assessment year (AY) 2024-25. After self-assessment, the taxpayer will compute the tax liability and will have to pay that amount and file ITR. Thereafter, the income tax department (ITD) conducts preliminary checking of returns for any arithmetical errors, incorrect claims, etc., which is a fully computerised process. At this stage, there is no detailed scrutiny of ITR filed.

Conclusion

The Income Tax Act, 1961, empowers the Assessing Officer (AO) to reassess income that may have escaped assessment ("IEA") under Sections 147 and 148. While this aims to ensure tax fairness, it can also lead to litigation due to ambiguities and complexities in the provisions. Recent amendments in the Finance Bill 2021 and proposed changes in the Finance Bill 2022 seek to address these concerns and promote a more transparent and efficient IEA process.