Income Tax Department may reopen big old cases
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CBDT has asked tax officers to ensure uniform practice as per an order of the Supreme Court in April. It states that those cases will not be reopened in which the final decision of the Appellate Authorities has come. This has brought relief to some taxpayers but many big cases can be opened in the coming days. Supreme Court advocate Deepak Joshi said that the good thing about the CBDT’s direction is that at least those cases where no appeal is pending will not be disturbed. But there is no change in the situation for the rest.
Supreme Court’s decision
The Supreme Court had delivered its verdict in the Abhisar Buildwell case in April. In this, the Supreme Court had made it clear that under Section 153-A of the IT Act, the Income Tax Officer cannot make any addition to the income of a taxpayer during the assessment process. For this, they should have concrete evidence. However, the court had also said that the reassessment can be restored under sections 147 and 148 of the IT Act. The CBDT has recently issued guidelines to Income Tax officials after the Supreme Court’s decision.
Joshi said that only a few taxpayers have got relief but the situation has not changed for the rest. That means they may have to be stuck in litigation for many years. Under section 148 (old system) the IT officer can open six years old cases. 10 years old cases can be opened under section 148A added in the Finance Act, 2021. But for this the annual income should be more than Rs 50 lakh. According to CBDT, this limit will be applicable while opening old cases. That is, cases with less annual income of Rs 50 lakh will not be opened.
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