The deadline for filing ITR is over, now there will be a flood of income tax notices!
IT Notice: The deadline for filing ITR ended on July 31. There may be a flood of income tax notices during the next one month. New rules will come into effect from September 1. After this, tax officers cannot open cases older than three years.
The deadline to file ITR for assessment year 2024-25 ended on July 31. But there may be a flood of income tax notices in the next one month. It is feared that due to the new rules of reassessment, many people may be out of the tax net. The new rules will come into effect from September. Revenue officials have warned the central officials that it will be almost impossible to reopen old tax returns of the last few years before September 1, 2024. According to the revised rules announced in the budget, if the hidden amount is more than Rs 50 lakh, then the tax officer can re-examine the five-year old record of the taxpayers. Till now this period was ten years. Similarly, if the hidden amount is less than Rs 50 lakh, then the tax officer can investigate only the three-year old case.
Usually, the tax office used to send reassessment notices for the previous year around March. Now, the maximum period for reassessment has been reduced to five years in the budget, so tax officials have only till August 31, 2024, to send notices. The income tax department prepares reassessment cases based on inputs from banks, property registrars and investigation wings. They will have to sift through the data for tax and income mismatch for financial years 2013-14 to 2017-18 in the next few weeks. This is because income tax returns for these years will not be reopened from September 1.
Problem of tax officers
An association of tax officers in a memorandum to the chairman of CBDT said that it would be a huge task to issue notices under section 148 (or 148A) in a large number of cases within a period of one month. Notices for reassessment are sent under sections 148 and 148A. The law gives the taxpayer the right to present his case. Most people believe that this process cannot be completed by the end of August. The officers have requested the CBDT to extend the date of implementation of the new rules.
However, this suggestion will not be liked by corporate and rich taxpayers. Mitil Chokshi, partner of CA firm Chokshi & Chokshi, said that limiting the period of reassessment to five years was a good decision. This will reduce the hassle and litigation of taxpayers. If the department feels that this can lead to a real loss of revenue, then the government can think about strict parameters. In this, some cases can be allowed to be reopened. Ashish Mehta, partner of law firm Khaitan & Co, said that there may be a flood of reassessment notices in August. These notices can be for assessment year 2018-19 and before.