From last year budget there has been a new tendency being apparent in the taxation front very little to mention it is obviously direct tax since the GST matters are mostly in the hands of GST council rather than in domain of budget. In last year budget there had been numerous changes in the direct tax and most of the changes were most vital in nature remoulding many old important sections or introducing many new sections. Unlike the direct tax amendments in the previous year, this year budget appeared to be sterio type neither venturing to the shortcomings of the previously amended sections nor introducing any remarkable sections save dare to play a match with crypto currency in this dull hour of COVID. Now it is better to deliberate about some old and new crucial sections in direct tax and their implications.
Firstly it is better to address the section 147 read with 148. In last year two vital amendments were brought in this section which is the prime arsenal of revenue to tap unaccounted money in the country. Section 148 which deals with procedural matters after reopening of an income tax file u/s 147. Before amendment in 2021 law was that after reopening u/s 147, department will shot off a notice u/s 148 intimating the assessee about such reopening and directing him to file return of income disclosing the escaped assessment. A new section 148A was introduced mandating the AO to initiate reopening only after deriving satisfaction vide an enquiry just like the section 142(2) which is enquiry before assessment u/s 143(3). But after such introduction w.e.f 1.4.21 a self contradictory circular was promulgated empowering the A O to exercise the old power u/s 148 as before 1.4.21 inspite of total procedural change of section 148. Although the object of 148A was to reduce litigations and to rein in rampant using of 147 by the department but that self contradicting step taken by the government generated much more litigation facilitating numerous assesses to obtain quashing orders of 148 notice. Financial and legislative history not only of india but of the universe too never witnessed such tom foolery on legislation which counter acted by one hand rendering maximum reopening notices null and on the other hand sprouting maximum litigations instead of reducing them. Moreover there was no public demand of said amendment but wise ruling dispensation self destroyed the most potent arsenal which not only in future deprive government from the generation of substantial revenue but will help to aggravate income inequality problem. It was expectation that after considering such judicial outcome government will take appropriate step to mend its most foolish act but now it is confirmed acceptance and bold acknowledgement of said grave foolishness. Another amendment of 148 in last year was effected to bring survey and search seizure proceeding within ambit of 148 from the domain of 143 and 153 to give department more teeth. It appeared to me a wisest act, first to pluck all the tooth of department by introducing 148A and then to place cosmetic teeth on the departments mouth to fill the void of original teeth.
Secondly It is crystal clear that government is hell bent to render the most important and prestigious law in the world as a museum of confusion and inoperative. Take the old section of 271(1)(c), penalty on concealment of income. This section was serving the department interest in a remarkable manner. But still master thought to give department more teeth by introducing section 270A and 271AAC for under reporting and misreporting of income as if the nomenclature of these words are different and quite distinct from the word concealment of old section. Now entire world will see in glee that we have luxury of three sections for same offence.
Thirdly thanks to the GOD that we have no another misadventure or circus by introduction of expenditure tax as its possibility of introduction was doing rounds in the medias. If it was introduced then our judiciary would have crumbled with mounting litigations like 148A . so at least for time being we are safe in this merry go round of legislative adventure or misadventure.
Fourthly after undone all pros of direct tax it is now time to play with crypto with 30% tax razor in the year 2022. Now let see who will be the gainer? This wise government or investors or nation.
Author Bio
