CBDT Instructions for issue of notices under section 148 for reassessment

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CBDT issued instructions on selection of cases for issue of notice u/s 148 for AY 2013-14 to 2017-18 

The Central Board of Direct Taxes (CBDT) issued instructions F. No.225/40/2021/ITA-II, dated 04th March 2021, regarding the selection of cases for the issue of notice under section 148 of the Income-tax Act, 1961. The instructions are issued by the CBDT u/s 119 of the Income-tax Act,1961 with an objective of streamlining the process of selection of cases for the issue of notices under section 148 of the Act.
 CBDT Instructions on selection of cases for issue of notice u/s 148 for AY 2013-14 to 2017-18CBDT directed that the following categories of cases be considered as ‘potential cases’ for taking action under section 148 of the Act by March 31, 2021, for the Assessment Year 2013-14 to 2017-18 by the Jurisdictional Assessing Officer (JAO).

i. Cases where there are Audit Objections (Revenue/Internal) which require action u/s 148 of the Act;

ii. Cases of information from any other Government Agency/Law Enforcement Agency which require action u/s 148 of the Act;

iii. Potential cases including:‑

    (a) Reports of Directorate of Income-tax (Investigation),

    (b) Reports of Directorate of Intelligence & Criminal Investigation,

    (c) Cases from Non-Filer Management System (NMS) & other cases as flagged by the Directorate of     Income-tax (Systems) as per risk profiling;

iv. Cases where information arising out of field survey action, requiring action u/s 148 of the Act.

v. Cases of information received from any Income-tax authority requiring action u/s 148 of the Act with the approval of Chief Commissioner of Income Tax concerned.

CBDT also directed that,

  • No other category of cases, except the above, shall be considered for taking action u/s 148 of the Act by the JAO.
  • Action u/s 148 of the Act shall be taken by the Assessing Officer in respect of the above categories of cases after forming a reasonable belief that income chargeable to tax has escaped assessment and ‘reasons to believe’ shall be recorded and required sanction as per section 151 of the Act shall be obtained before issuing notice u/s 148 of the Act.
  • These instructions shall not be applicable to the Central charges and International Taxation charges for which separate instructions are being issued
Clarification dated 12th March 2021:
1. With reference to CBDT’s Instruction dated 04.03.2021 on the above-mentioned subject. it has been decided to clarify as under:
(a) The ‘potential cases’ at Point no.1(iii) mean the cases flagged by the Directorate of Income-tax (Systems) subsequent to 04.03.2021. It is further clarified that the NMS cases flagged earlier will get subsumed in the new list.

(b) With respect to criterion at Point no.1(v), it is clarified that any other Income-tax Authority’ includes the Assessing Officer (A.0.) herself/himself. Further, the information received as per Point no.1(v) shall not include information received from Directorate of Income-tax (Investigation). Central Charges and Directorate of Income-tax (Intelligence and Criminal Investigation) after 01.04.2019.

(c) With respect to the condition at Point no.1(v), that cases are to be considered as potential cases for issue of notice u/s 148 of the Act ‘with the approval of CCIT concerned’, it is clarified that the CCIT shall call for the list of the potential cases along with details and evidences from the Subordinate Authorities and shall, after careful examination, suggest to the A.O., the potential cases to be taken for consideration for action u/s 148 of the Act.

2. Subsequent to the issuance of notice u/s 148 of the Act, the A.O. shall upload all the underlying documents relied upon and satisfaction recorded, in the ITBA Module for all category of cases in Para no.1 of CBDT’s Instruction dated 04.03.2021.

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