Income Tax Department cannot give notice in income tax cases older than three years, this court ordered

Income Tax: The court of this state has ordered the Income Tax Department that even after 3 years, it can issue reassessment order only where the alleged hidden income is more than Rs 50 lakh.

Delhi High Court: Delhi High Court has given an important order on this Monday i.e. 20th November. Delhi High Court has said that the Income Tax Department cannot reopen any income tax related case after more than 3 years have passed.

Reassessment order can be issued even after 3 years only in those cases in which the alleged concealed income is more than Rs 50 lakh. The Income Tax Department has a time of up to 10 years in cases of concealment of income of more than Rs 50 lakh and serious fraud cases in which it can issue a reassessment order.

When can tax reassessment orders older than 10 years be issued?

According to Live Law, it has been reported that the extended time period of 10 years for re-opening of income tax assessment should be applicable only if income amounting to more than Rs 50 lakh has been concealed with the intention of evading tax.

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Normal timeline for IT assessment is 3 years – Delhi High Court

During the hearing of an important case in the Delhi High Court, the bench of Justice Rajiv Shakdhar and Justice Girish Kathpalia said that there was no intention to issue the notice ‘in normal cases’ three years after the end of the assessment year.

The court said that only in certain special cases, reassessment notice can be issued even after 3 years. These cases are those in which either the amount of hidden income exceeds Rs 50 lakh or the case of income tax evasion or fraud is very serious.

The court made this comment on Section 148 of the Income Tax Act

The Delhi High Court had to decide the validity of the notice issued to the petitioner under Section 148 of the Income Tax Act. In this connection, the court made this important comment.

Since under the old system of Section 148, the Income Tax Officer can open cases up to 6 years old. At the same time, 10 year old cases can also be opened but for this the annual income of the taxpayer should be more than Rs 50 lakh.

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