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I-T Debt Reopening Old Tax Assessments Based on Algorithm

The unsetting letters from the tax office have started arriving, The Income Tax (I-T) department has begun the process of reopening old assessments, albelt with a difference this year: Tax officials across the country are busy tracking ‘INSIGHT’, the portal that spews out the names of tax dodgers following an algorithmic scanning of a mountain of data that has been fed in,

The new rule, which came into effect from 2021-22, is simple: till the machine throws up a name, the taxman’s hands are tied -unlike before when he could slap notice to reopen a past tax assessments as long as there was some information that a slice of income in a certain year had escaped tax.

“The system has a degree of randomness, So, it’s possible that if there is evasion for four years, the system may show for one year when we know there are grounds to reopen all the years, Also, it takes a while after all the information is uploaded before a name is thrown up,” said a tax officer, who is trying to beat the March 31,2022 deadline, after which many cases will become time-barred.

Besides awaiting a go-ahead from INSIGHT, the I-T department has to follow a more elaborate process, It has to send a preliminary letter under the newly introduced section 148A of the I-T Act that has assessee’s information has been flagged for a certain assessment year;

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