Deemed escapement of income on the basis information obtained by the Income-tax authorities [Section 147]
Related amendment is section: 133C
Effective from: 1st June, 2016
(i) Section 133C empowers the prescribed income-tax authority to issue notice calling for information and documents for the purpose of verification of information in its possession.
(ii) For the purpose of expediting verification and analysis of the information and documents so received, sub-section (2) has been inserted in section 133C to provide that where any information or document has been received in response to a notice issued under section 133C(1), the prescribed income-tax authority may process such information or document so obtained and make the outcome thereof available to the Assessing Officer, for necessary action, if any.
(iii) Thus, this amendment provides sufficient legislative backing for processing of information and documents so obtained and making the outcome thereof available to the Assessing Officer for necessary action, if any.
(iv) Explanation 2 to section 147 specifies certain cases where income chargeable to tax is deemed to have escaped assessment. Clause (ca) has been inserted in Explanation 2 to provide the circumstances where income shall be deemed to have escaped assessment in the cases mentioned in (1) and (2) hereunder:
| Case | Deemed escapement of income | |
| (1) | Where a return of income has not been furnished by theassessee | On the basis of information or document received from the prescribed income-tax authority, under section 133C(2), it is noticed by the Assessing Officer that the income of the assessee exceeds the basic exemption limit |
| (2) | Where a return of income has been furnished by the assesse | On the basis of information or document received from the prescribed income-tax authority, under section 133C(2), it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or,relief in the return |
Since income is deemed to have escaped assessment in such cases, the Assessing Officer can reopen the assessment on the basis of the information so received.