Changes related to assessments

1. In Budget 2022, the time limit for summary or scrutiny assessment under section 143 or best judgement assessment under section 144 was reduced to 21 months from the end of the financial year. Earlier, this time limit was 33 months. The reduced time limit is proving insufficient and therefore, the same has been now increased to 24 months from the end of the financial year. The aforementioned time limit relates to assessments for FY 2022 onwards.
2. The time limit for assessment in case of an Updated Return is also increased from 9 months to 12 months from the end of the year in which such a return is filed.
3. The time limit for assessment shall be extended by further 12 months if any search under section 132, or a requisition under 132A is made. These amendments are effective from FY 2023 onwards.
4. On receipt of a notice under section 148, a return has to be filed within 3 months from the end of the month in which such notice is issued. The tax officer may allow a further period on receipt of a request from the taxpayer.
5. Income tax refunds can be adjusted with any outstanding tax, only after providing written intimation mentioning the reasons.
6. Penalty interest in case of Updated Returns will be calculated on the differential tax and not the total tax.
7. Under section 92D, the Assessing Officer can request for transfer pricing report during proceedings. This report will now be required to be submitted within 10 days, instead of 30 days, from the date of receipt of the notice. On application, this period can be extended by 30 days.