India: Budget 2012: Highlights - Assessment

Last Updated: 11 December 2012
Article by Anil Harish

Return of Income

Sec. 139: This Sec. relates to persons required to furnish a return of income and those exempted. The Finance Bill, 2012 has proposed to insert a new proviso that a person who is a resident and is not required to furnish a return of income and who has any asset (including any financial interest in any entity) located outside India or is a signing authority in any account located outside India shall furnish a return of its income or loss in the previous year.

Self-assessment tax

Sec. 140A: This Sec. provides that an assessee shall be liable to pay the amount of tax payable on the basis of any return required to be furnished. However, such tax shall be computed after taking into account the amounts mentioned in Sec. 140A(1)(i) to (v). The Finance Bill, 2012 has proposed an amendment to Sec. 140A(1)(v) to include any amount of Alternate Minimum Tax paid u/s 115JD. Corresponding amendments have also been proposed to be made in Sec.s 140A(1A)(i)(e) and in clause (iv) in the Explanation to Sec. 140A(1B). This amendment shall come into effect from 1st April, 2013.


Sec. 143(1D): Sec. 143 provides the manner of assessment and processing of the return of income of an assessee. The proposed insertion which will be effective from 1st July, 2012, provides that the processing of a return shall not be necessary if the assessee has been served a notice of explaining any loss, exemption, deduction, allowance or relief claimed in the return of income.

Application of GAAR

Sec. 144BA: This new Sec. has been proposed to be introduced w.e.f. 1st April, 2013 to provide that at any stage of assessment or reassessment, if the Assessing Officer is of the opinion that any particular arrangement is for the avoidance of tax and could fall within the ambit of Chapter X-A (GAAR), he may refer such a case to the Commissioner of Income tax.

Dispute resolution panel

Sec. 144C: This Sec. provides for the manner of referring an order of an AO to the Dispute Resolution Panel. The Finance Bill, 2012 has made a proposed amendment to sub-Sec.s (4) and (13) to include Sec. 153B along with Sec. 153 (search and seizure). This amendment shall come into effect from 1st October, 2009.

An Explanation is being added to sub-Sec. (8) to say that the power of the Dispute Resolution Panel to enhance the variations in a draft order shall extend to any matter arising out of the assessment proceedings, whether or not such matter had been raised by the eligible assessee. This amendment shall come into effect from 1st April, 2009. New sub-Sec. (14A) is proposed to be inserted to provide that the provisions of this Sec. shall not apply to any order of assessment or reassessment passed under Sec. 144BA(12). This amendment shall come into effect from 1st April, 2013.

Reopening of assessment to last 16 years w.r.t foreign assets

Sec. 147: This Sec. provides for the manner in which any income which has escaped assessment can be brought to assessment upon the same coming to the notice of the AO. A new proviso has been proposed to be inserted which will be effective from 1st July, 2012 to provide that the limitation period of four years for the end of the relevant assessment year, shall be extended to 16 years if any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year.

It is further explained that the provisions of this Sec. as proposed to be amended shall also apply to any assessment year beginning on or before 1st April, 2012.

A similar amendment has also been made to Wealth tax assessment procedure.

Notice for reopening of assessment:

Sec. 149: Consequently Sec. 149 has been amended, so that notice for reopening of assessment may be issued as far back as sixteen years from the end of the relevant assessment year. Notice of reopening of assessment u/s 148 may be served on an agent of a non-resident u/s 163 as far back as six years from the end of the relevant assessment year.

Assessment or reassessment in search cases:

Sec. 153A: This Sec. provides for assessment and reassessment of cases where a search is initiated or books of accounts or any assets are requisitioned. A new proviso has been proposed to be introduced whereby the Central Government may notify the class or classes of cases where the Assessing Officer shall not be required to issue notice under this section. New Sec. 153C also empowers the Central Govt. to specify classes when such money and documents belongs to any other person.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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