According to section 149 of the Income Tax Act, Certain terms and conditions may apply while issuing the notice of tax assessment above six years. Also, the income tax department is liable to reopen a case only when an assessee has failed to provide returns or has not given proper information and documents regarding the tax assessment.
Keeping in mind the concerns of a taxpayer, ITA has launched a long queue of policies which the tax department has to follow before reopening a case, just to make a note that a taxpayer is not unnecessarily disturbed in the process.
An assessing officer can examine the case with the satisfaction of the taxpayer. The most important thing is that a taxpayer has all the rights to question the department’s offer to reopen the assessment
Furthermore, according to the sections of the ITA, reopening of the cases above six years is a very difficult conduct. “This provision has led to unnecessary litigations,” said the officials.
There are even cases of tax officers reopening the case just to expand the range of any ongoing assessment on the basis of non-disclosure of the information by the assessee. Experts suggest that doing away with the extended assessment cases will make sure that the department achieves tax certainty for taxpayers and at the same time it will help the department to increase the chances of tax recovery.
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As per tax experts, “there could be possibilities where an assessee himself is not traceable after a long time, with much advanced analytical tools and a much more proactive department, this reduction in the time period of tax recovery is definitely achievable.”