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The Income-tax department scrutinizes the return of income for its correctness. The process of reviewing the return of payment by the Income-tax department is known as assessment. The assessment also includes reassessment and judgment assessment under section 144.
Assessment in remand proceedings
The remand proceeding is an essential provision under the Income Tax Act. Suppose an income, which otherwise would have been chargeable to tax has, due to some reason, disappeared from assessment for a particular assessment year. The proceedings undertaken by the assessing officer against the assessee is termed as reassessment proceedings.
The authority to initiate reassessment proceedings has been given to the assessing officer under section 147 of the Income-tax Act, 1961, which deals with the income escaping assessment. To make out a case for initiating a reassessment proceeding against the assessee, the assessing officer must comply with the four vital essential conditions, as laid down in section 147. These include:
If the assessing officer believes that some income has disappeared assessment, then the assessing officer ought to record the reason which led to the formulation of such a belief. Post documenting the cause and describing the link, the assessing officer shall seek in writing important satisfaction from the authorities as defined in and mandated by section 151 of the Act if the reassessment is initiated after four years. After obtaining the required sanctions under section 151 of the income tax act, the assessing officer proposes a notice under section 148 of the Act to the assessee, thereby initiating a reassessment proceeding.
Through various judgments, courts across India have stated that the reasons jot down by the assessing officer in order to commence reassessment proceedings should be provided to the assessee along with the notice under 148 of the Act. However, the approach adopted by the revenue department is very different. Generally, a message under section 148 of the Act concerns the outset of reassessment proceedings sent to the assessee without the causes recorded by the assessing officer. With the receipt of notice under section 148 of the Act, the assessee can communicate to the assessing officer and examine a copy of the assessing officer’s reasons.
Objections raised by the assessee
The Supreme Court laid down a proper procedure for the revenue and the assessee to be accompanied while dealing with the initiation of reassessment proceedings. An assessee may object to the reasons formed by the assessing officer. The assessing officer must note these objections and have to dispose of the same before commencing reassessment by passing an order.
Thus, when a notice under section-148 is issued, the proper course of action is to file a return and seek reasons for issuing notices. The following points must be noted concerning the supply of a copy of reasons:
Remedies available to an assessee
If procedures are not followed while dealing with preliminary objections, in such cases, courts are being approached where the assessing officer passes an order without disposing of the initial objections raised by the assessee has provided benefit to the assessee by doing either of the following two things:
At AJSH, we assist our clients in dealing with various income tax compliances including income tax assessments, ITR Filings, TDS returns, tax advisory and other related services by providing them adequate support and guidance from our end. If you have any questions or wish to know more about Remand proceedings, kindly contact us.
