Provision for cases where assessment is in pursuance of an order on appeal,etc.

283(1)

Irrespective of anything contained in sections 280 and 282, the notice under section 280 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to—

• (a) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law; or
• (b) the directions issued by the Approving Panel under section 274(6).

283(2)

The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to a tax year in respect of which an assessment, reassessment or recomputation could not have been made, by reason of any other provisions limiting the time within which any action for assessment, reassessment or recomputation may be taken, at the time when,—

• (a) the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made; or
• (b) the reference from the jurisdictional Principal Commissioner or Commissioner is made to the Approving Panel under section 274(4).

Explanation

Section Summary:

This section, Section 283, deals with the issuance of notices for assessment, reassessment, or recomputation of income tax in cases where such actions are required due to orders passed by appellate authorities, tribunals, courts, or directions from the Approving Panel. It overrides the general time limits specified in Sections 280 and 282 of the Income Tax Act, allowing the tax authorities to issue notices at any time to implement findings or directions from such orders.

Key Changes:

1. Override of Time Limits: Unlike the general time limits for issuing notices under Sections 280 and 282, this section allows notices to be issued at any time if they are based on findings or directions from appellate authorities, tribunals, courts, or the Approving Panel.
2. Scope of Application: The section applies to cases where assessments, reassessments, or recomputations are needed to give effect to orders from appeals, references, revisions, or directions under Section 274(6).

Practical Implications:

1. Extended Timeframe for Notices: Tax authorities can issue notices for reassessment or recomputation even after the usual time limits have expired, provided the notice is based on an order from an appellate authority, tribunal, court, or the Approving Panel.
2. Impact on Taxpayers: Taxpayers may face reassessment or recomputation of their tax liabilities even for older tax years if a higher authority’s order necessitates it. This could lead to additional tax demands or refunds, depending on the findings.
3. Exceptions: The extended timeframe does not apply if the assessment, reassessment, or recomputation relates to a tax year for which such actions were already time-barred when the original order was passed or when the reference to the Approving Panel was made.

Critical Concepts:

1. Finding or Direction: Refers to specific conclusions or instructions in an order passed by an appellate authority, tribunal, or court that require the tax authorities to take further action.
2. Approving Panel: A body under Section 274(6) that issues directions in certain cases, which may necessitate reassessment or recomputation.
3. Time-Barred Cases: If the original assessment or reassessment was already time-barred (i.e., beyond the statutory time limit) when the order was passed, this section does not allow reopening of such cases.

Compliance Steps:

1. Monitor Appellate Orders: Taxpayers should closely monitor any orders passed by appellate authorities, tribunals, or courts that may lead to reassessment or recomputation.
2. Maintain Records: Ensure all relevant records and documentation are maintained, as reassessment notices may require detailed submissions.
3. Respond Promptly: If a notice is issued under this section, taxpayers must respond within the stipulated time to avoid penalties or adverse orders.

Examples:

1. Scenario 1: A taxpayer’s case is appealed, and the appellate tribunal directs the tax authorities to recompute the taxpayer’s income for a specific year. Even if the usual time limit for reassessment has passed, the tax authorities can issue a notice under Section 283 to implement the tribunal’s order.
2. Scenario 2: The Approving Panel issues a direction under Section 274(6) requiring a reassessment for a particular tax year. The tax authorities can issue a notice under Section 283, even if the reassessment would otherwise be time-barred, provided it was not time-barred when the original order was passed.

This section ensures that tax authorities can implement higher authorities’ orders effectively, even if it means bypassing usual time limits, while also safeguarding against reopening cases that were already time-barred.