Budget 2021- Allowing prescribed authority to issue notice under clause (i) of sub-section (1) of section 142

Section 142 of the Act provides for conduct of inquiry before assessment. Clause (i) of sub section (1) of the said section gives the Assessing Officer the authority to issue notice to an assessee, who has not submitted a return of income, asking for submission of return. This is necessary to bring into the fold of taxation non-filers or stop filers who have transactions resulting in income. However, this power can be currently invoked only by the Assessing Officer.

The Central Government is following a conscious policy of making all the processes under the Act, where physical interface with the assessee is required, fully faceless by eliminating person to person interface between the taxpayer and the Department. In line with this policy, and in order to enable centralized issuance of notices etc. in an automated manner, it is proposed to amend the provisions of clause (i) of the sub-section (1) of the section 142 to empower the prescribed income-tax authority besides the Assessing Officer to issue notice under the said clause.

This amendment will take effect from 1st April, 2021.

[clause 33]

Text of the Relevant Clause of the Finance Bill 2021

Clause 33 of the Bill seeks to amend section 142 of the Income-tax Act relating to inquiry before assessment.

Clause (i) of sub-section (1) of the said section empowers only the Assessing Officer to serve notice to an assessee requiring him to file return of income.

It is proposed to insert a second proviso in the said clause so as to empower the prescribed income-tax authority also to serve notice under clause (i) of sub-section (1) of the said section for the purposes of that clause.

This amendment will take effect from lst day of April, 2021.

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