The Supreme Court, while giving a major decision, has said that under the Taxation and Other Laws (Exemption and Amendment of Certain Provisions Act) (TOLA), notices can be issued even after April 1, 2021.
After the Supreme Court’s decision, 90 thousand revaluation notices will be affected. These revaluation notices are from 2013-14 to 2017-18 and involve quantum of thousands of crores.
In the provision of the IT Act implemented on April 1, 2021, it was said that the department can do reassessment up to 6 years from the relevant assessment year. For this, the foregone income should be Rs 1 lakh or more.
At the same time, after the decision of the Supreme Court, the Income Tax Department will be able to issue notice under the old law also.
In the 2021 amendment, this deadline was changed to say that IT can also take action on cases going back three years for hidden income up to Rs 50 lakh.
Apart from this, if this amount is more than Rs 50 lakh then cases up to 10 years ago can also be opened. The 2021 amendment added a new provision under Section 148A stating that the Income Tax Department will also have to issue a show cause notice before sending the reassessment notice.
Apart from this, taxpayers were also given the right to be heard in this provision.
During Covid 19, the government sent notices as per the old law. Notices were sent as per the old rules between April 1, 2021 and June 30, 2021. In such a situation, now the Supreme Court had to decide whether the relief given in the limitation period under the TOLA Act will be implemented or not.
The main issue was whether the notices sent under the old law would be applicable even after the implementation of the new law and provision.
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