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FACELESS ASSESSMENT WITH SPECIAL

REFERENCE TO SECTION 148 & 148A

1. The Finance Act 2021 had made a major
shift in reassessment provision. The
Finance Act had lowered the time limit for
reopening of assessment to 3 years from 6
years earlier. While for cases involving
income escaping assessments amounts to
or likely to amount Rs 50 lakh and above,
10 years old cases can be reopened.

T h e S e c o n d m a j o r s h i f t i n t h e
reassessment provision was inclusion of
search assessments. In, significant
changes to the taxation process, among
o t h e r t a x m e a s u r e s , t h e F M
recommended a paradigm change to the Adv. Ajay R. Singh
provisions relating to “Assessment in case
of search or requisition viz. Section 153A to 153D”. The third major change was that “to disclose
fully and truly all material facts” is done away with. The fourth major change was incorporation
of sec 148A provision which is a replica of Guidelines rendered by G K N Drive shaft decisions of Supreme Court
with certain modifications in process to be followed.
Lastly the fifth major change was that reopening shall now be based on “information with the Assessing Officer
which suggests that the income chargeable to tax has escaped assessment”. Explanation 1 to sec 148 provides
meaning to the above phrase.
2. The Chairman of Central Board of Direct Taxes (CBDT), the apex decision making body for income tax, said the
rationalisation of reopening of cases announced in Budget would bring in more certainty to taxpayers. "What
was a heavily litigated area, we have tried to rationalise it to the extent that it is no longer left to the discretion
of assessing officer. It would be more of information-based attempt to reopen the cases. It would be primarily
based on data analytics and risk assessment which the system throws up which would lead to reopening of the
assessment,"
3. Subsequently the Finance Act 2022 insert a new proviso under the first proviso to the effect that approval to
issue notice under the said section 148 shall not be required where the Assessing Officer, with the prior
approval of the specified authority has passed an order under clause (d) of section 148A that it is a fit case to
issue a notice under the said section.
It has also amended Explanation 1 to the said section to provide that for the purposes of the said section and
section 148A of the Act, the information with the Assessing Officer which suggests that the income chargeable
to tax has escaped assessment means, —
A. any information in the case of the assessee for the relevant assessment year in accordance with the risk
management strategy formulated by the Board from time to time; or

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