AMIT BAJAJ ADVOCATE

The power of assessement or reassessement of any income chargable to tax that have escaped assessement has been provided under secton 147 r w s 148 of Income Tax Act of 1961.If the assessing officer has the reason to believe that any income chargabale to tax has escaped assessement then the assessing officer may subject to the provisions of section 147 to 153 assesse or reassess such income.

What is reason to believe: Before issuing any notice U/S 148 the assessing officer must have reason to believe that any income chargable to tax has escaped assessement. Reason to believe can not be a reason to suspect merely. There must be a direct nexus between the material coming to the notice of the assessing officer and the formation of the belief that there has been escapement of income of the assessee from assessment in a particular year. The material for formation of belief must be relevent and not vague. The assessing officer must record reasons in writting before issuing notice u/s 148. Mere a reason recorded that "there is a huge concealment of income' or 'For further investigation' without any specific instance of entries or material relevent to the assessee will not constitute a valid reason as it is vague and general in nature.

The Delhi High Court has declared the service tax on renting of immovable property as ultra vires of the finance act. in case of Home Solution Retail India Ltd & ors vs union of India & ors. Evan Though the matter is pending before the SC by special leave petition filed by the central Govt seeking relief against the said order but the said judgement will havefar reaching effects.

GST i.e. Goods and Service Tax will be applicable in India from 01-04-2010 onwards replacing existing system of VAT, service tax, excise and other indirect taxes. There was a debate whether a single GST or a dual GST will be more feasible and doable in India in the present taxation scenario. But In this regard, the announcement that was made sometime ago by the Empowered Committee of State Finance Ministers was that it had accepted the recommendation of the Working Group that there should be a dual GST applicable.