GCCI Advocates for Statutory Minimum Response Time in Finance Bill 2026
The Gujarat Chamber of Commerce and Industry (GCCI) has identified a significant oversight in the Finance Bill, 2026 that could potentially expose taxpayers to arbitrary timelines set by individual assessing officers. In a formal communication addressed to Finance Minister Nirmala Sitharaman, the prominent business organization has strongly recommended the incorporation of a mandatory minimum 30-day response period into the legislation.
Addressing the Discretionary Power Concern
According to the GCCI, the current wording of the bill grants excessive discretionary authority to assessing officers regarding the timeframe allowed for taxpayers to submit updated returns in response to reassessment notices. Without a legally defined minimum period, taxpayers are left vulnerable to potentially unreasonable deadlines that could hinder their ability to comply voluntarily and effectively.
Jainik Vakil, Chairman of the Direct Tax Committee at GCCI, elaborated on this critical issue in a comprehensive post-budget memorandum. He emphasized that while the Finance Bill, 2026 aims to expand the updated return framework to reduce litigation and promote voluntary compliance, the absence of a statutory minimum response window undermines these objectives.
Specific Legislative Amendments Proposed
The chamber has pinpointed two key sections of the Income Tax Act that require amendment:
- Section 263(6)(b) of the Income Tax Act, 2025: This section would be modified to permit the filing of an updated return following a notice under Section 280, but currently specifies "within the time period specified in that notice."
- Section 139(8A) of the Income Tax Act, 1961: Similarly, this section allows for an updated return in response to a notice under Section 148, again using the phrase "within the period mentioned in the notice."
Vakil highlighted that the problematic wording "within such period as specified in the said notice" essentially places unchecked power in the hands of assessing officers, with no legal safeguard ensuring adequate time for taxpayer response.
GCCI's Concrete Recommendation
To address this regulatory gap, the Gujarat Chamber of Commerce and Industry has formally proposed that both Section 139 of the 1961 Income Tax Act and Section 263 of the 2025 Income Tax Act be amended to guarantee a statutory minimum of 30 days from the date of service of any reassessment notice. This amendment would apply regardless of whatever alternative period an assessing officer might specify, thereby establishing a consistent and fair baseline for all taxpayers.
The chamber argues that this change is essential to eliminate uncertainty and create a more predictable, equitable tax compliance environment. By implementing a mandatory minimum response window, the government can better achieve its stated goals of reducing legal disputes and encouraging voluntary adherence to tax regulations.
