Amendment of section 149.
62. In section 149 of the Income-tax Act, with effect from the 1st day of July, 2012,—
(A) in sub-section (1),—
(i) in clause (a), after the word, brackets and letter “clause (b)”, the words, brackets and letter “or clause (c)” shall be inserted;
(ii) after clause (b), the following clause shall be inserted, namely:—
“(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.”;
(B) in sub-section (3), for the words “two years”, the words “six years” shall be substituted;
(C) after sub-section (3), the following Explanation shall be inserted, namely:—
“Explanation.—For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or efore the 1st day of April, 2012.”.
Notes on Clauses:
Clause 62 of the Bill seeks to amend section 149 of the Income-tax Act relating to time-limit for notice.
The existing provisions of sub-section (1) of the aforesaid section 149 provide that the time limit for reopening an assessment on account of income escaping assessment is six years where the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year.
It is proposed to insert a new clause (c) to the aforesaid sub-section so as to provide that if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.
The existing provisions of sub-section (3) of the aforesaid section 149 provide that if the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or re-computation to be made in pursuance of the notice is to be made by him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant assessment year.
It is proposed to amend the aforesaid sub-section to substitute the words “two years” with the words “six years” so as to provide that the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year.
The provisions of section 149 are procedural in nature. However, it is clarified by inserting a new Explanation to the aforesaid section that the provisions of sub-sections (1) and (3) of this section as amended by the Finance Act 2012, shall also be applicable to the proceedings initiated under this section for any assessment year beginning on or before 1st April, 2012.
These amendments will take effect from 1st day of July, 2012.
