UPSC Prelims Practice Questions — HC quashes tax notices to NDTV founders
Q1. With reference to the reassessment regime under the Income Tax Act, 1961, consider the following statements comparing the pre- and post-Finance Act, 2021 position:
1. Under the pre-2021 regime, a reassessment notice under Section 148 could be issued up to 16 years from the end of the relevant assessment year where the escaped income related to an asset located outside India.
2. The Finance Act, 2021 inserted Section 148A, which mandates a prior inquiry and a reasoned opportunity of being heard before issuance of a reassessment notice.
3. Under the post-2021 regime, a notice beyond three years from the end of the relevant assessment year is permissible only where the escaped income, represented in the form of an asset, amounts to ₹50 lakh or more.
Which of the statements given above are correct?
- Under the pre-2021 regime, a reassessment notice under Section 148 could be issued up to 16 years from the end of the relevant assessment year where the escaped income related to an asset located outside India.
- The Finance Act, 2021 inserted Section 148A, which mandates a prior inquiry and a reasoned opportunity of being heard before issuance of a reassessment notice.
- Under the post-2021 regime, a notice beyond three years from the end of the relevant assessment year is permissible only where the escaped income, represented in the form of an asset, amounts to ₹50 lakh or more.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q2. Under which provision of the Income Tax Act, 1961 is a notice issued to an assessee for the reassessment of income alleged to have escaped assessment?
- A. Section 143(3)
- B. Section 147
- C. Section 148
- D. Section 153A
Q3. In the context of the Income Tax Act, 1961, the expression 'income escaping assessment' as used in Section 147 refers to:
- A. Income earned by a non-resident outside India which is not chargeable to tax in India
- B. Income chargeable to tax which has not been assessed, or which has been under-assessed, in a previously completed assessment
- C. Income on which tax has been deducted at source but the deductor has failed to deposit it with the Government
- D. Income claimed as exempt under Chapter III which the Assessing Officer subsequently disallows in scrutiny
Q4. As per the reassessment regime introduced by the Finance Act, 2021, the maximum number of years from the end of the relevant assessment year within which a notice under Section 148 of the Income Tax Act, 1961 can be issued (in cases where escaped income represented in the form of an asset amounts to ₹50 lakh or more) is:
- A. 4 years
- B. 6 years
- C. 10 years
- D. 16 years
Q5. With reference to the writ jurisdiction exercised by a High Court under Article 226 of the Constitution of India (as was invoked by the Delhi High Court in the NDTV founders' reassessment case), consider the following:
1. Writ of Habeas Corpus
2. Writ of Mandamus
3. Writ in the nature of Quo Warranto
4. Curative Petition
Which of the above are correctly identified as remedies that a High Court is empowered to issue under Article 226?
- Writ of Habeas Corpus
- Writ of Mandamus
- Writ in the nature of Quo Warranto
- Curative Petition
- A. 1 and 2 only
- B. 1, 2 and 3 only
- C. 2, 3 and 4 only
- D. 1, 2, 3 and 4