December 9, 2016 10:13:06 pm
The CBDT on Friday assured taxpayers that taxman won’t reopen their past cases “merely” on the ground that their current year’s turnover has increased in the wake of spurt of digital payments post demonetisation. The Central Board of Direct Taxes, the policy-making body of the Income Tax department, clarified the position in this regard as it said apprehensions were raised “that increased turnover in the current year may lead to re-opening of earlier year’s cases involving lower turnover, under section 147 of the I-T Act, by the Assessing Officer (AO) causing undue harassment to taxpayers”.
“It is hereby clarified that reopening of cases under section 147 is feasible only when the AO has reason 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. “Mere increase in turnover, because of use of digital means of payment or otherwise, in a particular year cannot be a sole reason to believe that income has escaped assessment in earlier years,” the CBDT said in a circular issued late this evening.
This directive, it added, is to be brought to the notice of all AOs for “necessary and strict compliance”. The directive added that “recent initiatives of the government to curb the black economy in the country has encouraged people to shift towards digital mode of payment while making financial transactions and by adopting this method no financial transactions would remain undisclosed and consequently an enhanced turnover of business might get
reflected in the books of accounts.”
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