In this article I will focus on a most remarkable amendment in a most potent law in the universe which occasioned by the FINANCE ACT, 2021 and this is the thorough amendment of section 147 as well as introduction of section 148A which will go down in taxation history of the world as a most epoch making event. But now the question is why? The answer is confined to simple two reasons. Firstly by thorough amending the section 147, mandarins of North block has gifted the officers of the department a new and first intercontinental ballistic missile (ICBM) with wide range of 16000 km to detect and destroy any tax evasion attempt in future. What is amazing that although the body of ICBM is the same but it has undergone massive technological upgradation internally to hit the target at any distant of its wish. From 2021, section 147 has been upgraded with followings mechanism as such, (1) to do away the reason to believe which had colossal onus upon the A.O, (2) to bring survey and search seizure proceeding within the operation of u/s 147. These two changes are sufficient to upgrade the range of ICBM from 5000 to 16000 km or more. Not only this, unlike the previous, survey action is not confined to survey year but it is entangled with compulsory reopening u/s 147 of preceding three years and same mandate is for search action too. Secondly, bringing of a new section 148A which is enquiry before reopening u/s 147. Why this new section? The answer is that it is the masterpiece of legislation to plug the tax evasion. Yes it is fact. The plausible reason for this new enactment rest on government hard lesson of circumvention of 147 proceeding by the assesses by challenging them before jurisdictional High Courts directly thus bypassing the department and assessees were often successful to obtain quashing order of 147 proceeding. As a result revenue became worst sufferer. Now this new section 148A has shifted the power of enquiry about the legality of reopening from the realm of High Courts to the department and assessee is precluded to challenge the u/s 148 notice now and then like before in the High Courts. As a result most of reopening will fall flat no more by judicial interference and coffer of government will swell definitely.
Now in view of said factual deliberation question may come naturally in our mind why these drastic changes? Answer is that by long studying of income tax history, mandarins in North block is rightly convinced that to enlarge the tax base and to tap the unaccounted money in the fast developing economy no law or regulation are least potent in comparison with 147 and its immediate upgradation by giving it the invincible striking power is badly needed to combat the budgetary deficit particularly in such tough years post of COVID. That’s why this missile has been transformed in to an ICBM with indefinite range to strike the target. Not only this, our mandarins are conscious of giving department absolute power in all proceedings under the law to bring them within the umbrella of this section and also closing the way of judicial escapement route by snatching the power of judging legality of initiation of reopening proceeding from the hands of HC to the department. Although under writ jurisdiction court is empowered to entertain the petition u/s 148 still now but it is clear fact that High Courts will not like previous interfere or entertain these writs in view of parallel enquiry proceeding by the department, particularly our Hon’ble judges in HC are alive to fact that the Hon’ble apex court has already given stamp of approval on this new section.
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