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Time-limit for completion of assessment under section 147

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Time-limit for completion of assessment under section 147

As per Section 153, the time limit for making assessment under section 147 is:-

  • Within 9 months from the end of the financial year in which the notice under section 148 was served (if notice is served before 01-04-2019).
  • 12 months from the end of the financial year in which notice under section 148 is served (if notice is served on or after 01-04-2019).

Note:- If reference is made to TPO, the period available for assessment shall be extended by 12 months.

Assessment under section 147

This assessment is carried out if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year

Scope of assessment under section 147

The objective of carrying out assessment under section 147 is to bring under the tax net any income which has escaped assessment in original assessment.

Original assessment here means an assessment under sections 143(1), 143(3), 144 and 147 (as the case may be).

In other words, if any income has escaped (*) from being taxed in the original assessment made under section 143(1) or section 143(3) or section 144 or section 147, then the same can be brought under tax net by resorting to assessment under section 147.

* In the following cases, it will be considered as income having escaped assessment:

Where no return of income has been furnished by the taxpayer, although his total income or the total income of any other person in respect of which he is assessable during the previous year exceeded the maximum amount which is not chargeable to income-tax.

Where a return of income has been furnished by the taxpayer but no assessment has been made and it is noticed by the Assessing Officer that the taxpayer has understated the income or has claimed excessive loss, deduction, allowance or relief in the return.

Where the taxpayer has failed to furnish a report in respect of any international transaction which he was required to do under section 92E.

Where an assessment has been made, but:

  1. income chargeable to tax has been under assessed; or
  2. income has been assessed at low rate; or
  • income has been made the subject of excessive relief; or
  1. excessive loss or depreciation allowance or any other allowance has been computed;

   Where a person is found to have any asset (including financial interest in any entity) located outside India.

Where a return of income has not been furnished by the assessee and on the basis of information or document received from the prescribed income-tax authority under section 133C(2), it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax.

Where a return of income has been furnished by the assessee and on the basis of information or document received from the prescribed income-tax authority under section 133C(2), it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return.

Procedure of assessment under section 147

For making an assessment under section 147, the Assessing Officer has to issue notice under section 148 to the taxpayer and has to give him an opportunity of being heard. The time-limit for issuance of notice under section 148 is discussed in later part.

If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, then he may 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. He is also empowered to re-compute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned.

Items which are the subject matters of any appeal, reference or revision cannot be covered by the Assessing Officer under section 147




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