In a circular, the Central Board of Direct Taxes has advised assessing officers not to reopen past assessments in cases merely on the grounds the current year’s turnover has increased.
It said an apprehension has been raised that increased turnover in the current year might lead to reopening of earlier years’ cases involving lower turnover by the assessing officer, causing undue harassment to taxpayers, the circular said.
“It is hereby clarified that reopening of cases is feasible only when the assessing officer has reasons to believe that any income chargeable to tax has escaped assessment for any assessment year and not merely on the basis of any reason to suspect,” it clarified. Mere increase in turnover, because of use of digital means of payment or otherwise, in a particular year cannot be the sole reason to believe income has escaped assessment in earlier years, it clarified.
Vikas Vasal, Partner, Grant Thornton India, said, “This would allay the fear of small and medium businesses that if their turnover for the current year is higher in comparison to earlier years, their tax returns for the past years can be automatically re-examined.”
Source: Business Standard