Income Evasion Analysis

Income that has been excluded from the income tax assessment of a certain taxpayer is referred to as income evading assessment. The income tax department may start the legal procedures in a case of income evasion if specific incomes have been exempt from taxation, assessed at a lower rate, or disproportionate losses or allowances have been made.

The evaluating officer is allowed to evaluate the assessment for the pertinent assessment year in such a case. An evaluating officer should depend on strong evidence before starting processes rather than acting only on hearsay or supposition. The evaluating officer must act honestly throughout his activities. The notion of income-escaping assessment is covered in this article.

There is a good topic on an section 12a of income tax act.

The income-escaping assessment must be finished nine months after the fiscal year in which the notice of invoicing was delivered came to an end. This will be in place until the 2019–20 fiscal years, after which the deadline for completion will be 12 months.

Within four years after the conclusion of the applicable assessment year, and six years if the amount that was evaded is greater than one million rupees, a notification announcing the conduct of an assessment may be provided to the concerned assessee. On the other hand, a term of 16 years may be permitted if the fled income is connected to a specific asset located outside of Indian boundaries.

Despite identifying reasons for reassessing a specific assessment if it is up for revision or appeal, the assessing officer must not do so. The assessing officer may reconsider the income if they believe that any additional provisions, outside the items of escaping revenue, have been left out for assessment. Reassessment actions may be taken more than once, but not while an assessment is still being completed.

If the taxpayer has not submitted a return of income, even though there has not been an assessment notwithstanding the assessee's total income, or if the total income of any other person for whom the concerned person is subject to assessment under this Act during the preceding year exceeds the basic deductible limit. The assessing officer notices that the assessee has either underestimated his income or has asserted an excessive loss, deduction, allowance, or relief after the taxpayer has submitted his return of income. If the scrutiny/best discretion evaluation was not done, this would qualify for the income-escaping assessment.

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