TaxTMI 
TaxTMI 
Modernizing the Reassessment Notice Regime in Indian Income Tax Law : Clause 280 of the Income Tax Bill, 2025 Vs. Section 148 of the Income-tax Act, 1961
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....ax authorities. Objective and Purpose Both Clause 280 and Section 148 are designed to ensure that income which has escaped assessment does not go untaxed. The legislative intent is to strike a balance between revenue interests and taxpayer rights by providing a fair, transparent, and legally sound process for reopening assessments. The provisions aim to: * Enable the tax authorities to correct omissions or errors in original assessments where there is credible information suggesting escapement of income. * Prescribe procedural safeguards to prevent arbitrary or unjustified reopening of assessments. * Incorporate modern risk management strategies and information-sharing mechanisms, including international cooperation and data analytics, as part of the assessment process. * Ensure compliance with principles of natural justice and due process by mandating notice, opportunity to be heard, and, where applicable, higher-level approvals. The historical background of reassessment provisions reveals a continuous legislative effort to adapt to evolving economic realities, tax avoidance strategies, and judicial pronouncements, particularly regarding the requirement of "reason to be....
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....come assessable in the hands of the assessee or any other person. Key Point: The time limit aligns with the need for expeditious proceedings and prevents indefinite reopening. The provision for filing on behalf of another person reflects the principle of representative assessment. 3. Form, Verification, and Consequences of Late Filing Clause 280(2): The return must be furnished in the prescribed form, verified in the prescribed manner, and the provisions of the Act apply as if it were a return u/s 263. Clause 280(3): Any return furnished after the expiry of the period in the notice shall not be deemed to be a return u/s 263. This provision ensures that returns filed in response to reassessment notices are treated with the same procedural rigour as original returns, promoting uniformity and compliance. The consequence of late filing is that such returns do not enjoy the status of a regular return, potentially affecting the assessee's procedural rights. Comparison with Section 148(2): Section 148(2) contains similar provisions, treating returns filed in response to notice u/s 148 as if u/s 139, and denying such status to belated returns. Key Point: This equivalence ensure....
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....274(6); (h) findings or directions in orders by authorities, Tribunal, or courts in appeal, reference, revision, or other law proceedings. This expansive definition codifies various sources of actionable information, reflecting modern tax administration's reliance on risk analytics, audit findings, international cooperation, and judicial directions. Comparison with Section 148(3): Section 148(3) similarly defines "information" to include risk management data, audit objections, information u/ss 90/90A (international agreements), information u/s 135A (centralized schemes), actions required by Tribunal/Court orders, and information from surveys u/s 133A (excluding sub-section (2A)). Key Point: Both provisions reflect a move towards objective, data-driven triggers for reassessment, with Clause 280 expanding the scope to include additional sources (e.g., directions from Approving Panels, findings in proceedings under other laws). 7. Procedural Interlocking with Other Sections Clause 280 is closely interlinked with sections 279 (assessment/reassessment/recomputation), 281 (procedure for reassessment), 263 (original return), 260 (scheme for information), 253 (survey), 159 (inter....
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....onth in which notice issued Same Identical Form and Verification Return to be filed as per section 263 Return to be filed as per section 139 Section reference updated; substantive effect similar Late Return Consequence Late return not deemed u/s 263 Late return not deemed u/s 139 Same consequence; section reference updated Precondition: Information Suggesting Escapement Mandatory Mandatory Substantially similar Prior Approval Requirement Required in cases involving information under scheme, Approving Panel directions, or judicial findings Required for information under scheme; generally required for all notices Clause 280 specifies more scenarios for approval Definition of "Information" Expansive: risk management, audit, international agreements, schemes, surveys, Approving Panel, judicial findings, orders under other laws Similar, but does not refer to Approving Panel or proceedings under other laws Clause 280 broadens the scope Survey Reference Section 253 (excluding sub-section (4)) Section 133A (excluding sub-section (2A)) Section references differ; substantive intent similar Key Observations * Clause 280 updates section re....