In respect of Mr. Naksh, who is engaged in the export of fabrics, information is flagged as per the risk management strategy formulated by the CBDT…

In respect of Mr. Naksh, the Assessing Officer has information suggesting that income has escaped assessment for the purposes of section 148 and 148A, since information has been flagged for the relevant assessment year as per risk management policy formulated by the CBDT. Notice can be issued for A.Y.2023-24, A.Y.2022-23 and A.Y.2021-22, since the three-year time limit from the end of the relevant assessment year has not expired as on April, 2024. Such notice can be issued after conducting an enquiry, if required, with respect to the information suggesting escapement of income; and providing an opportunity of being heard to Mr. Naksh by serving a show cause notice. Thereafter, on the basis of material available on record including the reply of Mr. Naksh, in response to show cause notice, the Assessing Officer has to decide whether or not it is a fit case to issue notice under section 148 by passing an order, with the prior approval of Principal Commissioner or Principal Director or Commissioner or Director. However, notice cannot be issued in respect of A.Y.2020-21, since the three-year time limit from the end of the relevant assessment year (i.e., from 31.3.2021) has since expired on 31st March, 2024. In case of Mr. Ramesh, since search was conducted under section 132 in April 2024, the Assessing Officer is deemed to have information suggesting that income chargeable to tax has escaped assessment. In this case, the Assessing Officer has in his possession certain documents which reveal that income chargeable to tax, represented in the form of an asset, has escaped assessment. Shares are included in the definition of "asset". However, the income chargeable to tax, represented in the form of shares, which has escaped assessment amounts to 49 lakhs (i.e., 28 lakhs + 21 lakhs). Since the amount is lower than 50 lakhs, notice cannot be issued beyond 3 years from the end of the relevant assessment year. In this case, the relevant assessment years are A.Y.2018-19 (relevant to P.Y.2017-18) and A.Y.2019-20 (relevant to P.Y.2018-19). The three-year period for A.Y.2018-19 and A.Y.2019-20 expired on 31.3.2022 and 31.3.2023, respectively. Accordingly, notice cannot be issued under section 148 in April 2024. However, where the income chargeable to tax, represented in the form of shares, which has escaped assessment amounts to 51 lakhs (i.e.,30 lakhs +21 lakhs), an extended period of 10 years from the end of the relevant assessment year (i.e., from the end of 31.3.2019 and 31.3.2020) would be available under section 149 (1) (b) for issue of notice, which has not expired in April, 2024. Therefore, the Assessing Officer can issue notice under section 148 for A.Y.2018-19 and A.Y.2019-20 with the prior approval of specified authority. In this case, the Assessing Officer need not conduct an enquiry and provide opportunity of being heard to Mr. Ramesh as required u/s 148A for the purpose of issue of notice u/s 148. Note - Notice cannot be issued under section 148 in respect of the relevant assessment year beginning on or before 1.4.2021, if on the date of issue of such notice, the time limit prescribed for issue of notice under erstwhile section 153A has expired. In case of Mr. Ramesh, where income represented in the form of assets, being shares, which has escaped assessment amounts to 50 lakhs or more, the time limit for issue of notice under erstwhile section 153A in case of relevant assessment year beginning on or before 1.4.2021, has also not expired in April 2024. Since search had taken place in the P.Y.2024-25 relevant to A.Y.2025-26, the Assessing Officer could have issued notice for ten assessment years immediately preceding A.Y.2025-26 (i.e., from A.Y.2015-16 to A.Y.2024-25) under the erstwhile section 153A.