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New Substituted Section 147 for Reopening/Reassessment and Search Assessments

new-substituted-section-147-for-reopening-reassessment-and-search-assessments

While presenting the Union Budget 2021-22 on 01.02.2021, the Finance Minister said that presently, an assessment can be re-opened up to 6 years and in serious tax fraud cases for up to 10 years. As a result, taxpayers  have  to  remain  under  uncertainty  for  a  long  time. Therefore, it is proposed to  reduce  this  time-limit  for  re-opening  of assessment to 3 years from the present 6 years. In serious tax evasion cases too, only where there is evidence of concealment of income of Rs. 50 lakh or more in a year, can the assessment be re-opened up to 10 years. Even this reopening  can  be  done  only  after  the  approval  of  the  Principal  Chief Commissioner,  the  highest  level  of  the  Income  Tax  Department. For this, Section 147 is substituted with a new section 147 of the Income Tax Act, 1961 (“Act”).


In  order  to reduce  compliance  burden,  the time-limit for  re-opening  of  assessment  is being reduced to 3 years from the current 6 years  from  the  end  of  the relevant assessment year.  Re-opening up to 10 years is  proposed  to  be  allowed  only  if  there  is evidence of undisclosed income of Rs. 50 Lakh or more for a year. Further, it is proposed to completely  remove  discretion  in  re-opening and henceforth re-opening shall be made only in cases flagged by the system on the basis of data analytics,  objection of  C&AG  and  in search/survey cases. 


Income escaping assessment and search assessments


Under the Act, the provisions related to income escaping assessment provide that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess or re- compute the total income for such year under section 147 of the Act by issuing a notice under section 148 of the Act. However, such reopening is subject to the time limits prescribed in section 149 of the Act. 



In cases where search is initiated u/s 132 of the Act or books of account, other documents  or  any  assets  are  requisitioned  under  section  132A of  the  Act, assessment is made in the case of the assessee, or any other person, in accordance with the special provisions of sections 153A, 153B, 153C and 153D, of the Act that deal specifically with such cases. These provisions were introduced by the Finance Act, 2003 to replace the block assessment under Chapter XIV-B of the Act. This was done due to failure of block assessment in its objective of early resolution of search assessments. Also, the procedural issues related to block assessment were proving to be highly litigation-prone. However, the experience with this procedure has been no different. Like the provisions for block assessment, these provisions have also resulted in a number of litigations.


Due to advancement of technology, the department is now collecting all relevant information related to transactions of taxpayers from third parties under section 285BA of the Act (statement of financial transaction or reportable account). Similarly, information is also received from other law enforcement agencies. This information is also shared with the taxpayer through Annual Information Statement under section 285BB of the Act. 


Department uses this information to verify the information declared by  a  taxpayer  in  the  return  and  to  detect  non-filers or or  those  who  have  not disclosed  the  correct  amount  of  total  income.  Therefore,  assessment  or reassessment or re-computation of income escaping assessment, to a large extent, is information-driven.    


In view of above, there is a need to completely reform the system of assessment or reassessment  or  re-computation  of  income  escaping  assessment  and  the assessment of search related cases. 


The Finance Bill, 2021 proposes a completely new procedure of assessment of such cases. It is expected that the new system would result in less litigation and would provide ease of doing business to taxpayers as there is a reduction in time limit by which a notice for  assessment  or  reassessment  or  re-computation  can  be  issued.  The  salient features of new procedure are as under:-


(i) The provisions of section 153A and section 153C, of the Act are proposed to be made applicable to only search initiated under section 132 of the Act or books of accounts, other documents or any assets requisitioned under section 132A of the Act, on or before 31st March 2021. 


(ii) Assessments or reassessments or in re-computation in cases where search is initiated under section 132 or requisition is made under 132A, after 31st March 2021, shall be under the new procedure.


(iii) Section 147 proposes to allow the Assessing Officer to assess or reassess or re-compute any  income escaping assessment for any  assessment  year (called relevant assessment year).


(iii) Before such assessment or reassessment or re-computation, a notice is required to be issued under section 148 of the Act, which can be issued only when there is information with the Assessing officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year. Prior approval of specified authority is also required  to  be obtained  before  issuance  of  such  notice  by  the  Assessing Officer. 


(iv) It is proposed to provide that any information which has been flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board shall be considered as information which suggests that the income chargeable to tax has escaped assessment.  The  flagging would  largely  be  done  by  the  computer  based system.


(v) Further, a final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been in accordance with the provisions of the Act shall also be considered as information which suggests that the income chargeable to tax has escaped assessment.


(vi)  Further,  in  search,  survey  or  requisition  cases  initiated  or  made  or conducted, on or after 1st April, 2021, it shall be deemed that the Assessing officer has information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or requisition is made or any material is seized or requisitioned or survey is conducted.


(vii) New Section 148A of the Act proposes that before issuance of notice the Assessing  Officer  shall conduct  enquiries,  if  required, and  provide  an opportunity of being heard to the assessee. After considering his reply, the Assessing Office shall decide, by passing an order, whether it is a fit case for issue of notice under section 148 and serve a copy of such order along with such notice on the assessee.  The Assessing Officer shall before conducting any such enquiries or providing opportunity to the assessee or passing such order obtain the approval of specified authority. However, this procedure of enquiry, providing opportunity and passing order, before issuing notice under section 148 of the Act, shall not be applicable in search or requisition cases.


(viii) The time limitation for issuance of notice under section 148 of the Act is proposed to be provided in section 149 of the Act and is as below:


(a) in normal cases, no notice shall be issued if three years have elapsed from the end of the relevant assessment year. Notice beyond the period of three years from the end of the relevant assessment year can be taken only in a few specific cases.


(b) in  specific  cases  where  the  Assessing  Officer  has  in  his  possession evidence which reveal that the income escaping assessment, represented in the form of asset, amounts to or is likely to amount to fifty lakh rupees or more, notice can be issued beyond the period of three year but not beyond the period of ten years from the end of the relevant assessment year;


(c) Another restriction has been provided that the notice under section 148 of the  Act  cannot  be  issued  at  any  time  in  a  case  for  the  relevant assessment year beginning on or before 1st day of April, 2021, if such notice  could  not  have  been  issued  at  that  time  on  account  of  being beyond the time limit prescribed under the provisions of clause (b), as they stood immediately before the proposed amendment. 


(d) Since the assessment or reassessment or re-computation in search or requisition cases (where such search or requisition is initiated or made on or before 31st March 2021) are to be carried out as per the provision of section  153A,  153B,  153C and  153D  of  the  Act,  the  aforesaid  time limitation shall not apply to such cases.


(e) It  is  also  proposed  that  for the  purposes  of  computing  the  period  of limitation  for  issue  of  section  148  notice,  the  time  or extended  time allowed to the assessee in providing opportunity of being heard or period during which such proceedings before issuance of notice under section 148 are stayed by an order or injunction of any court, shall be excluded. If after excluding such period, time available to the Assessing Officer for passing order, about fitness of a case for issue of 148 notice, is less than seven days, the remaining time shall be extended to seven days.


(ix)  The  specified  authority  for  approving  enquiries,  providing  opportunity, passing order under section 148A of the Act and for issuance of notice under section 148 of the Act are proposed to be —


(a) Principal  Commissioner  or  Principal  Director  or  Commissioner  or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;


(b) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.


(x)  Once  assessment  or  reassessment  or  re-computation  has  started  the Assessing officer is proposed to be empowered (as at present) to assess or reassess the income in respect of any issue which has escaped assessment and which comes to his notice subsequently in the course of the proceeding under this procedure notwithstanding that the procedure prescribed in section 148A was not followed before issuing such notice for such income.


These amendments will take effect from 1st April, 2021.


For this purpose, Finance Bill, 2021 has proposed the following amendments in the Income Tax Act, 1961 related to Reopening of assessment or Reassessment under section 147 and in case of search and seizures cases vide Clauses 35 to 40 and 42 to 43 of the Bill-


Substitution of new section for section 147.


35. For section 147 of the Income-tax Act, the following section shall be substituted, namely:—


Income escaping assessment.


“147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and  in  sections  148  to  153  referred  to  as  the  relevant assessment year). 


Explanation.—For  the  purpose  of  assessment  or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently  in the  course  of  the  proceedings  under  this section, irrespective of the fact that the provisions of section 148A have not been complied with.”. 


Substitution of new section for section 148. 


36. For section 148 of the Income-tax Act, the following section shall be substituted, namely:— 


Issue of notice where income has escaped assessment.


“148. Before making  the  assessment,  reassessment  or recomputation  under  section  147,  and  subject  to  the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed,  if  required,  under  clause  (d)  of  section  148A, requiring  him  to  furnish  within  such  period,  as  may  be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this  Act  during  the  previous  year  corresponding  to  the relevant assessment year, in the prescribed form and verified in  the  prescribed  manner  and  setting  forth  such  other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: 


Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice. 


Explanation  1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,— 


(i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; 


(ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. 


Explanation   2.—For the purposes of this  section, where,— 


(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or  


(ii) a survey is conducted under section 133A in the case of the assessee on or after the 1st day of April, 2021; or 


(iii) the Assessing Officer is satisfied, with the prior approval  of  the  Principal  Commissioner  or Commissioner,  that  any  money,  bullion,  jewellery  or other valuable article or thing, seized or requisitioned in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or  


(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that  any  books  of  account  or  documents,  seized  or requisitioned in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, 


the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. 


Explanation.3—For  the  purposes  of  this  section, specified authority means the specified authority referred to in section 151.”


Insertion of new section 148A


37. After section 148 of the Income-tax Act, the following section shall be inserted, namely:— 


Conducting inquiry, providing opportunity before issue of notice under section 148.


“148A. The Assessing Officer shall, before issuing any notice under section 148, — 


(a) conduct any enquiry, if required, with the prior approval  of  specified  authority,  with  respect  to  the information which suggests that the income chargeable to tax has escaped assessment; 


(b)  provide  an  opportunity  of  being  heard  to  the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case  for  the  relevant  assessment  year  and  results  of enquiry conducted, if any, as per clause (a); 


(c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause  (b); 


(d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order,  with  the  prior  approval  of  specified  authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: 


Provided that the provisions of this section shall not apply in a case where,— 


(a) a search is initiated under section 132 or books of  account,  other  documents  or  any  assets  are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or


(b) the Assessing Officer is satisfied, with the prior  approval  of  the  Principal  Commissioner  or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or 


(c) the  Assessing Officer is satisfied,  with the prior approval of the  Principal  Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee. 


Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.”. 


Substitution of new section for section 149.


38. For section 149 of the Income-tax Act, the following section shall be substituted, namely:–– 


Time limit for notice. 


“149. (1) No notice under section 148 shall be issued for the relevant assessment year,—  


(a) if three years have elapsed from the end of the relevant  assessment  year,  unless  the  case  falls  under clause (b);  


(b) if three years, but not more than ten years, have elapsed from the end of  the relevant assessment year unless the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year: 


Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of  being  beyond  the  time  limit  specified  under  the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021: 


Provided further that the provisions of this sub-section shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021: 


Provided also that for the purposes of computing the period  of  limitation  as  per  this  section,  the  time  or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded: 


Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation in  sub-section  (1)  shall be deemed to be extended accordingly. 


(2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.”. 


Substitution of new section for section 151. 


39. For section 151 of the Income-tax Act, the following section shall be substituted, namely:— 


“151. Specified authority for the purposes of section 148 and section 148A shall be,— 


(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years  have  elapsed  from  the  end  of  the  relevant assessment year; 



(ii)  Principal  Chief  Commissioner or Principal Director General or where there is no Principal Chief Commissioner or  Principal  Director  General,  Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.”. 


Amendment of section 151A


40. In section 151A of the Income-tax Act, in sub-section (1), in the opening portion, after the words and figures “issuance of notice under section 148”, the words, figures and letter “or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A” shall be inserted.


Amendment of section 153A.


42. In section 153A of the Income-tax Act, in sub-section (1), in the opening portion, after the words, figures and letters “after the 31st day of May, 2003”, the words, figures and letters “but on or before the 31st day of March, 2021” shall be inserted. 


Amendment of section 153C.


43. In section 153C of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted, namely:— 


“(3)  Nothing  contained  in  this  section  shall  apply  in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021.”. 


Amended Provisions Explained


Clause 35 of the Bill seeks to amend section 147 of the Income-tax Act relating to income escaping assessment. 


It is proposed to substitute the said section so as to provide that if any income chargeable to tax, in the case of an assessee,  has escaped assessment for any assessment year, the Assessing officer may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for such assessment year. 


This amendment will take effect from 1st April, 2021. 


Clause 36 of the Bill seeks to amend section 148 of the Income-tax Act relating to issue of notice where income has escaped assessment. 


It is proposed to substitute the said section so as to provide that before making the assessment,  reassessment  or  recomputation  under  section  147,  and  subject  to  the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice along with a copy of order passed under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139, provided that no notice under the said section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and prior approval of the specified authority to issue such notice has been obtained by the Assessing Officer. 


The proposed Explanation 1 to the said section provides for the purposes of the said section and section 148A, that information which suggests that the income chargeable to tax has escaped assessment means any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time or any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. 


The proposed Explanation 2 provides that where -


(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April,2021, in the case of the assessee; or 


(ii) survey is conducted under section 133A in the case of the assessee; or 


(iii) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or 


(iv) the Assessing officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, 


the Assessing officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. 


The proposed Explanation 3 provides that the “specified authority” shall mean the specified authority referred to in section 151. 


This amendment will take effect from 1st April, 2021.


Clause 37 of the Bill seeks to insert a new section 148A in the Income-tax Act relating to Conducting inquiry, providing opportunity before issue of notice under section 148. 


It is proposed to insert a new section 148A, which seeks to provide that the Assessing Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show- cause notice referred to in clause (b); and (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires, provided that the provisions of this sub-section shall not apply in a case, where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021 or the Assessing officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or the Assessing officer  is  satisfied,  with  the  prior  approval  of  the  Principal  Commissioner  or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relates to, the assessee. Explanation 3 to the said section provides that “Specified authority” shall mean specified authority referred to in section 151. 


This amendment will take effect from 1st April, 2021. 


Clause 38 of the Bill seeks to amend section 149 of the Income-tax Act relating to time limit for notice. 


It is proposed to substitute the said section so as to provide that no notice under section 148 shall be issued for the relevant assessment year -


(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); 


(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. 


Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit prescribed under the provisions of clause (b), as they stood immediately before the commencement of the Finance Act, 2021.


Further, the provisions of this section shall not apply to cases where a notice under section 153A or section 153C read with section 153A is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or before the 31st day of March, 2021 and for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice under clause (b) of section 148A; or the period during which the proceeding under section 148A is stayed by an order or injunction of any court shall be excluded and also where immediately after the exclusion of such period, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation in sub-section (1) shall be deemed to be extended accordingly. 


This amendment will take effect from 1st April, 2021. 


Clause 39 of the Bill seeks to substitute of a new section for section 151 relating to sanction for issue of notice. 


It is proposed to substitute the said section so as to provide that for the purpose of section 148,  specified authority shall be (i) Principal Commissioner of Income-tax or Principal Director of Income-tax or Commissioner of Income-tax or Director of Income-tax, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner of Income-tax or Principal Director General of Income-tax, or where there is no Principal Chief Commissioner of Income-tax or Principal Director General of Income-tax, Chief Commissioner of Income-tax or Director General of Income-tax, if more than three years have elapsed from the end of the relevant assessment year. 


This amendment will take effect from 1st April, 2021. 


Clause 40 of the Bill seeks to amend section 151A of the Income-tax Act relating to faceless assessment of income escaping assessment. 


It is proposed to amend the said section so as to provide that conducting of enquiries or issuing show-cause notice or passing order under section 148A (before issuance of notice under section 148) in the scheme to be notified as specified under the said section.  


This amendment will take effect from 1st April, 2021.


Clause 42 of the Bill seeks to amend section 153A of the Income-tax Act relating to assessment in case of search or requisition.  


It is proposed to amend the said section so as to provide that the search or requisition shall only apply where search or requisition is made on or before 31st March, 2021. Consequently, assessments under section 153A and 153C shall not be made in respect of a search or requisition made on or after 1st April, 2021. 


This amendment will take effect from 1st April, 2021. 


Clause 43 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person.  


It is proposed to amend the said section so as to insert sub-section (3) therein to provide that nothing contained in the said section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after 1st day of April, 2021. 


This amendment will take effect from 1st April, 2021.



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