Section - 153A and 153C - Rationalisation of the provisions in respect of time limits for completion of search assessment -


When Income Declaration Scheme was launched, section 197(c) of the Finance Act, 2016 provided that in case one fails to make a declaration under the Scheme and it is found that any income has accrued or received or any asset has been acquired out of such income in any year such income shall be deemed to have accrued arisen or received in the year in which notice under section 143(1), 143(2), 148,153A or 153C for assessment was issued. In other words, all the existing limits for reopening of assessments were not applicable and assessment could be made in any year in which notice is issued.


The Finance Bill, 2017 withdraws such provision by omitting clause (c) of section 197 of the Finance Act 2016. However, the provisions of section 153A and 153C are proposed to be amended to provide that where tangible evidence is found during the search and the escaped income is represented in the form of undisclosed investment, notice under section 153A/153C can be issued for an assessment year or years beyond the existing 6 assessment years upto the 10th assessment year. This is subject to the condition that –


a)    AO has in his possession books or documents or any other evidence showing that the amount of escaped income is likely to be Rs.50 lakhs or more in one year.


b)   Such income is represented in the form of asset


c)    The income escaping assessments or part thereof relates to such year or years.


The amendment will be effective from 1st April 2017.