Government Considering Ordinance on Past Tax Assessment As Income Tax Disputes Rise: Report
New Delhi: The Center is reportedly considering the possibility of enacting an ordinance to resolve the issue of income tax cases to rescheduling notices under old, statute-barred norms.
Recently, several companies and individuals have filed written motions that invalidate the April 1 to 30 old provisions of the Income Tax Act, according to a report in Business Standard.
In addition, more than a dozen assesses in cities such as Delhi, Mumbai and Kolkata received injunctions from the Supreme Courts upon notification from the Ministry.
With reference to two knowledgeable officials, the financial newspaper mentioned that such a remedy could be considered if the court decides against the ministry and wishes to withdraw the decisions issued during this period. You also mentioned that the department is reviewing the interim measures and is also preparing an answer on the relevant matters.
The old tax law, which was changed with the adoption of the Finance Act 2021 and was in force until March 31, 2021, allowed the resumption of the assessments of the last six years. However, the tax office extended its validity to June 30th and accordingly notified thousands of taxed persons between April 1st and June 30th.
It is worth mentioning here that the new regulation that came into force in April shortened the period for issuing new assessment notices from six years from the end of the respective assessment year to three years. Serious tax evasion fraud of Rs 50 lakh or more can open for up to 10 years.
The Tax Department believes taxpayers cannot contest any particular step taken by the department as various tax compliance deadlines have been extended in the wake of a deadly second wave of the Covid-19 pandemic. The Central Office for Direct Taxes (CBDT) had informed about the extension because of the second wave of coronavirus infections.
As a result of the second wave and mini-lock, the center had the reopening date of cases by the 30th. If taxpayers were given the extra time, the government machinery should also be given extra time to review the cases, the publication cited one of the companies two officers.
The government awaited the final verdict from the courts and the matter will now be heard in August and September.