(1) If in view of any audit, assessment of tax or any proceedings taken under this Act or on specific information obtained from any other source, the Deputy Commissioner of Taxes has reason to believe that a taxpayer in any tax year under this Act has evaded payment of any amount due, the Deputy Commissioner of Taxes shall issue notice to such taxpayer in the form prescribed by the Board:

(a) shall ask for filing of returns and applicable statements and documents for the relevant tax year within the period specified in the notice; and

(b) Ask for payment of the amount of tax evaded at or before the filing of the return.

(2) The Deputy Commissioner of Taxes-

(a) Send an acknowledgment of return if the following conditions are met, namely:-

(i) file the return within the period specified in the notice issued under sub-section (1) and in compliance with the provisions of the said sub-section;

(ii) payment of the amount evaded at or before the filing of the return; and

(iii) clearly mention in the return the issue for which payment of tax has been evaded;

(b) If any of the conditions mentioned in clause (a) is not fulfilled, shall proceed for assessment of tax under section 183 or, as the case may be, section 184.

(3) The Deputy Commissioner of Taxes shall obtain the approval in writing from the Inspecting Additional Commissioner of Taxes, before issuing a notice under sub-section (1), in which case-

(a) the return for the relevant tax year has been filed in compliance with the provisions of sub-section (1) of section 180; or

(b) the assessment of tax for the relevant tax year has been completed under any other provision of this Act.

(4) The Deputy Commissioner of Taxes may issue a notice under sub- section (1).

(a) at any time if no return is filed and no tax assessed in the relevant tax year;

(b) in other cases, from the tax year in which the notice is issued to the sixth preceding tax year:

Provided, that-

(i) if the tax is redetermined afresh in any tax year under any provision under this Act, the period referred to in this section shall commence from the end of the year in which the tax is redetermined afresh;

(ii) where any undisclosed assets of a person has been acquired year.

(5) In computing the period of limitation for the purpose of assessing tax or taking any other proceedings under this Act, if the Court, Tribunal or any other authority suspends the assessment of tax or any other proceedings for any period, such period shall be excluded from the calculation.

(6) Notwithstanding anything contained in sub-section (4), where any assessment of tax or any order abrogated, rejected suspeded or modified, the income tax authority may initiate proceedings from the stage of abrogation, rejection or modification & shall not be required to re-issued, resupply or resubmits any notice already issued.

(7) The assessment of tax under sub-section (2) for the relevant tax year of any such taxpayer whose tax assessment has already been completed shall be limited to the issues mentioned in the notice issued under sub-section (1).

(8) The mere fact that proceedings under sub-section (2) have already been completed in a tax year shall not preclude the Deputy Commissioner of Taxes from taking proceedings under this section for that tax year.

(9) For the purposes of this section-

(a) the payment of any sum payable under this Act shall be deemed to have been evaded, if-

(i) the assessment of tax on any income or part thereof has been evaded;

(ii) the amount of income is understated;

(iii) additional losses, deductions, allowances or discounts are claimed in the return;

(IV) has understated or misrepresented the liability of tax or any other amount by concealing or understating any income or by concealing or misrepresentating any asse, liability or expenditure in the return filed under section 167 or 168;

(v) the taxable income is under-assessed, or the income is taxed at a lower rate the actual rate of tax; taxable income treated as tax exempted income; (vii) assessed income by allowing excessive deduction or loss or depreciation allowance or any other allowance under this Act; or

(viii) the tax or other amount payable under this Act is under has been calculated or under-paid due to under estimation of basis;

(b) the relevant tax year is the tax year in respect of which any amount payable by a taxpayer under this Act has been avoided.