Taxmann Law Relating To Reassessment By D.C. Agrawal , Ajay Kumar Agrawal Edition March 2025

Taxmann New Law Relating To Reassessment By D.C. Agrawal

Taxmann New Law Relating To Reassessment By D.C. Agrawal

Description

Law Relating to Reassessment (5^th Edition) is a well-researched, authoritative treatise that explains the entire framework of reassessment under the Income-tax Act 1961. Over the years, India’s legislative and judicial systems have significantly reshaped reassessment procedures, from the older Section 34 under the 1922 Act to the revised scheme under Sections 147 to 153 in the 1961 Act—and more recently through major amendments brought in by Finance Acts (including 2021, 2022, 2023, and now 2025). The book meticulously covers the rationale behind reopening or reassessing income tax returns—particularly where taxpayers may have unintentionally omitted information or deliberately withheld details, thereby resulting in ‘escaped’ income. In-depth coverage of historical and current provisions and an extensive compilation of case laws and administrative guidelines make this a helpful resource for professionals and taxpayers. Notably, it incorporates the latest changes—especially those concerning Section 148, Section 148A, Section 149, and associated provisions—while contrasting them with previous regimes like block assessments (Section 158BC) and assessments under Sections 153A to 153D in search/requisition scenarios. By weaving together legislative text, case law analysis, and others, this commentary ensures that readers gain a conceptual and application-oriented understanding of reassessment law.

This book is intended for the following audience:

• Tax Professionals & Advocates – Offers an exhaustive roadmap on the legal intricacies and procedures of reopening assessments, serving as a ready reference for representation before Assessing Officers, appellate forums, and courts
• Chartered Accountants & Finance Controllers – Guides practitioners through the minefield of reassessment provisions, enabling them to ensure corporate compliance and advise businesses on best practices to avoid protracted litigation
• Corporate Tax Departments – Equips in-house teams with clarity on emerging scenarios in search, survey, and requisition-based reassessments, ensuring they stay updated with the dynamic contours of tax law
• Academicians & Law Students – Provides comprehensive material on the evolution of reassessment law, helpful for research work and advanced study in taxation
• Senior Management & Entrepreneurs – Enlightens decision-makers on strategies to minimise risks associated with under-reporting or misreporting of income

The Present Publication is the 5^th Edition | 2025, amended by the Finance Act 2025. This book is authored by D.C. Agrawal & Ajay Kumar Agrawal with the following noteworthy features:

• [Historical to Contemporary] Traces reassessment law from Section 25 of the IT Act 1918 to Section 34 of the 1922 Act, culminating in the robust legal framework of Sections 147–153 of the 1961 Act and further amendments up to 2025
• [Explained Through Practical Issues] Examines how taxpayers can inadvertently or intentionally evade taxation—via accounting manipulations, round-tripping, and other tactics—and how revenue authorities address these under the reassessment regime
• [Deep Dive into Search/Survey Cases] Provides a thorough treatment of procedures from the introduction of ‘Block Assessments’ in 1995 to the post-2003 scheme under Sections 153A–153D, and the shift back to Sections 147–153 for post-2021 search and survey cases
• [Focused Discussion on Section 148A] Explains the newly inserted procedure ensuring the taxpayer’s right to be heard before issuance of the notice, its interplay with judicial instructions (e.g., GKN Driveshafts), and practical challenges
• [Case Laws] Integrates landmark Supreme Court and High Court rulings, Tribunal decisions, and relevant references from leading tax journals
• [Practical FAQs] Incorporates a dedicated question-and-answer section addressing frequently encountered queries and operational dilemmas faced by professionals and taxpayers
• [Revisions & Penalties] Delineates scenarios for revision under Section 263, along with penalty provisions for under-reported/misreported income, ensuring comprehensive coverage of both assessment and post-assessment stages
• [User-friendly Format] Headings, paragraphs, and detailed tables offering quick references, with cross-links between provisions and practical scenarios, enabling faster navigation and clarity
• [Expert Authors]
• D.C. Agrawal, Advocate – Former IRS officer and ex-ITAT Accountant Member with deep hands-on experience in complex tax litigation and policy formulation
• Ajay Kumar Agrawal, FCA – A practising CA with extensive exposure to corporate consultancy, tax planning, and litigation, making the book truly practitioner-oriented

The coverage of the book is as follows:

• Legislative Evolution & Key Concepts
• A solid grounding in how and why reassessment provisions have evolved over decades—crucial for interpreting current rules
• Formation of ‘Belief’ & Requirement of Tangible Material
• Detailed exploration of the benchmark for validly reopening an assessment, covering ‘reasons to believe’ and the shift to ‘information suggesting escapement’
• New Regime vs. Old Regime
• Comparative insights into pre/post-1 April 2021 frameworks, including transitional issues, challenge to notifications, and the ramifications of Supreme Court judgments
• Search, Seizure & Survey Provisions
• Clarifies the concepts of ‘deemed information,’ block assessment, incriminating material, limitation periods, and the pivotal role of Section 149 in defining scope and timelines
• Procedural Safeguards
• Lays out how taxpayers can respond to notices (Section 148A(b)), the nature of inquiry under Section 148A(a), mandatory approvals under Sections 148B and 151, and ramifications of non-compliance
• Penalties & Revision
• Discusses the interplay between under-reported income, penalties under various Sections (271AAD, 271AAB, etc.), and the Commissioner’s revisionary powers under Section 263
• Drafting & Defence Strategies
• Offers recommendations on how taxpayers and professionals can draft replies to reassessment notices, mount objections, and ensure procedural adherence to minimise litigation risks

The structure of the book is as follows:

• Introduction – Legislative background and evolution of reassessment provisions
• Reopening under Old Law – Basic Principles – Foundational concepts and the conditions for valid reopening
• Reopening under Old Law – Specific Propositions – Borrowed satisfaction, change of opinion, limitation, etc.
• Income Escaping Assessment – Section 147 – Core analysis of new/old provisions
• Issue of Notice – Section 148 – Detailed commentary on notice requirements and procedures
• Opportunity under Section 148A – Conducting inquiry, providing taxpayers with an opportunity
• Role of Section 135A – Linking technology & risk management with reassessment
• Deemed Information – Conceptual coverage of information presumed to be available after search/requisition
• Time Limit for Notice – Section 149 – Threshold limitations for reopening older assessments
• Books of Account & Evidence – Evidentiary standards and the significance of documents, loose papers, etc.
• Issue & Service of Notices – Valid service, addresses, digital communications, and common pitfalls
• Approval of Additional Commissioner (Section 148B) – Procedure and significance
• Approval for Issue of Notice (Section 151) – Safeguards against arbitrary reopening
• Validating Notices (Sections 292B & 292BB) – Legal cures for technical/procedural defects
• Assessment in Search/Survey Cases – Transition from block assessment to new provisions
• Revision of Reassessment Orders (Section 263) – When and how higher authorities can revise.
• Penalties – Detailed interplay with misreporting and under-reporting.
• Miscellaneous Escaped Income – Typical scenarios (cash deposits, bogus purchases, etc.)
• Aggregation of Escaped Income (Section 149(1A)) – How multiple items might push escapement over thresholds
• Validity of Notices under Old vs. New Law – The legal controversies post–1 April 2021
• Response Strategies – How taxpayers can respond to notices effectively
• Developments Post–Ashish Agarwal’s Case – Judicial interpretation of transitional provisions
• Enhancement in Reassessment – Scope and power of enhancement by appellate authorities
• Theory of ‘Travel Back in Time’ – Constitutional challenges and notification-based time extensions
• Amendments by Finance (No. 2) Act 2024 – Latest legislative shifts
• FAQs – Quick resolutions to common queries

About the author

D.C. Agrawal

D.C. Agrawal, Advocate, has vast experience in the field of taxation. He served in Income Tax Department as an IRS officer for about 30 years. After that, in 2005, he was elevated to Income Tax Appellate Tribunal, where he served as Accountant Member till his superannuation in July 2011. Apart from being IRS, he holds a master’s degree in science. He is Law Graduate and is also a qualified Cost and Works Accountant. As an Accountant Member of the Income Tax Appellate Tribunal, he has authored several landmark judgments published in leading Tax journals. He has also written two books, ‘Basic concepts of International Taxation’ and ‘Taxation of Cash Deposits & Deposits after Demonetisation’, published by Taxmann. He has also authored more than 200 Articles on various topics in Direct Taxes, particularly carrying analysis of judgements rendered by the Hon’ble High Courts and Income Tax Appellate Tribunal. These articles are published in leading journals such as Corporate Professional Today. Currently, he is practising as an Advocate and Consultant.

Ajay Kumar Agrawal

Ajay Kumar Agrawal, FCA, is a science graduate and fellow chartered accountant in practice for over 26 years. Ajay has been in continuous practice, mainly in corporate consultancy, litigation in Direct and Indirect laws, Regulatory Law, and commercial law, besides the Auditing of Corporates and Banks. He has wide experience in a variety of consulting matters of corporates and multinationals in the field of mergers & acquisitions, corporate restructuring across sectors, domestic and international taxation, FEMA and FDI laws.