TaxTMI 
TaxTMI 
The Changing Landscape of Reassessment Notices in Indian Tax Law : Clause 282 of Income Tax Bill, 2025 Vs. Comparative Analysis with Section 149 of the Income-tax Act, 1961
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....collection with taxpayer certainty. The time limits for issuing reassessment notices are critical, as they directly affect the finality of assessments and the ability of the Revenue to reopen concluded matters. Understanding the evolution of these time limits, the rationale for their structuring, and the implications of the proposed changes is essential for all stakeholders-taxpayers, tax professionals, and the tax administration alike. The following analysis provides a comprehensive examination of Clause 282, situates it within the broader legal framework, and compares it in detail with the existing regime u/s 149. Objective and Purpose The legislative intent behind prescribing time limits for issuing notices of income escaping assessmen....
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....r Notices u/s 280 This sub-clause provides as follows: * General Time Limit: No notice u/s 280 shall be issued for the relevant tax year if four years and three months have elapsed from the end of the relevant tax year, unless the case falls under clause (b). * Extended Time Limit for Substantial Escapement: If four years and three months but not more than six years and three months have elapsed from the end of the relevant tax year, a notice can be issued only if the Assessing Officer possesses books of account, documents, or evidence showing that the income escaping assessment amounts to or is likely to amount to fifty lakh rupees or more. Key features: * The standard limitation period is four years and three months, slightly long....
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....d, likely to ensure that the regular assessment process is completed before reassessment is initiated. * This is a novel feature not explicitly present in Section 149, and may reflect a policy choice to avoid premature reopening of cases. 3.5. Observations and Potential Issues * The increase in the limitation period (from five to six years, and from three to four years) may be seen as tilting the balance in favor of the Revenue. * The uniform threshold of Rs. 50 lakh for substantial escapement is consistent with recent amendments, but may be considered high for certain classes of taxpayers. * The cooling-off period is a welcome step for taxpayer certainty, but could delay legitimate investigations in rare cases. * The absence of ....
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....cases (such as foreign assets), may need further guidance. 5. Comparative Analysis with Section 149 of the Income-tax Act, 1961 5.1. Section 149: Key Provisions (Current as of 2024) Section 149, as amended, provides the time limits for issuing notices u/s 148 (reassessment) and 148A (show cause before reassessment): * Three Years and Three Months: No notice u/s 148 after three years and three months from the end of the assessment year, unless the case falls under the extended period. * Five Years and Three Months (Earlier: Up to Ten Years): If three years and three months but not more than five years and three months have elapsed, notice can be issued only if the Assessing Officer has evidence that income escaping assessment is or is....
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....ion Special Provisions for Foreign Assets Not specified Earlier included up to 10 years; now generally omitted 5.3. Analysis of Differences and Policy Shifts * Extension of Time: The Bill extends both the standard and the extended limitation periods by one year each, providing the Revenue more time for investigation and action. This may be justified by the increasing complexity of financial transactions and the need for more thorough investigation, especially in high-value cases. * Uniformity in Threshold: The Rs. 50 lakh threshold is retained, reflecting a policy choice to focus extended limitation on significant cases only. Earlier, lower thresholds (as low as Rs. 1 lakh or Rs. 25,000) were used, but these were found to be admi....