A reassessment notice has to get through two gates before anybody reaches the figures, and both can be checked from the notice itself on the day it arrives. Gate one is time. Since 1 September 2024 the outer limit is three years and three months from the end of the assessment year — or five years and three months, but only where the officer holds material showing the escaped income is fifty lakh rupees or more. The ten-year door that applied to the larger category closed on 31 August 2024, and most of what is still being repeated about it was written before then. And there are two clocks, not one. The show-cause stage has its own, running three months inside the other — three years for the preliminary notice against three years and three months for the notice that reopens the year. Gate two is what it rests on. The Act now says what information means, and it is a closed list of six things. If the notice does not sit on one of them, that is a question worth putting before any document is collected. One thing that changed quietly. The old seven-to-thirty-day range for your reply is gone; the period is now whatever the notice specifies. Which is why asking for time belongs on day one, not day six.
Almost every conversation about this subject starts badly because two different documents are being called by the same name. People say they have received a 148 notice when what has arrived is a show-cause notice at a stage before that, and the difference decides what is open to them.
The sequence has three documents in it. First a show-cause notice asking why the year should not be reopened. Then an order deciding whether it is a fit case. Then, if the order says it is, the notice that actually reopens the year and requires a return. Three papers, in that order, and a file is in a very different position depending on which of them has arrived.
So the first thing to do with the document in front of you is to read the section printed on it rather than the heading. The heading on a departmental communication tends to be generic. The section number is not.
Why it matters practically. If you are holding the show-cause notice, nothing has been reopened yet and you are at the one stage where what you say can prevent it. If you are holding the notice that reopens the year, that stage has passed, and there should be an order in your papers explaining why. If there is not, ask for it.
Section 148A is headed, in the Act itself, Procedure before issuance of notice under section 148. Its first sub-section says that where the Assessing Officer has information suggesting that income chargeable to tax has escaped assessment, he shall, before issuing any notice under section 148, provide an opportunity of being heard by serving a notice to show cause as to why a notice under section 148 should not be issued.
Read that again and notice the shape of it. The officer is not asking you to prove your innocence of anything. He is asking why a particular step should not be taken. That is a narrower question than it feels like, and a reply that answers the narrower question is a better reply than one that volunteers a defence of the entire year.
Notice also the word shall. The opportunity is not discretionary at this stage, subject to one exception dealt with later on this page. Where the stage applies and has not been given, that is a point.
Section 148 is headed Issue of notice where income has escaped assessment. It provides that before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall, subject to section 148A, issue a notice to the assessee along with a copy of the order passed under section 148A(3), requiring the person to furnish a return of income for the relevant previous year within the period specified in the notice.
Two things in that sentence are easy to miss and both are useful. The notice is to be issued along with a copy of the order, so the order is not something you have to chase separately; it is meant to come with the notice. And the notice requires a return. It is not a questionnaire. The thing it asks you to do is file.
If a notice under section 148 has arrived without the order that is supposed to accompany it, say so in writing immediately and ask for the order. You cannot sensibly answer a reopening whose stated reasons you have not been given, and the Act contemplates that you will have them.
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Between the two notices sits the document that actually matters, and it is the one people pay least attention to. Section 148A(3) provides that the Assessing Officer shall, on the basis of the material available on record and taking into account the reply furnished, if any, pass an order with the prior approval of the specified authority determining whether or not it is a fit case to issue a notice under section 148.
Three features of that are worth holding on to. The order must take the reply into account, which is a reason to file one. It must be passed with prior approval. And what it determines is a single question: fit case or not.
For a reader, the order is the most informative paper in the file. It tells you what the officer actually relied on, which of your points were engaged with and which were passed over, and what the case against you will look like at every later stage. Read it slowly, and read it before deciding what to do next.
People who have been through a scrutiny assessment tend to assume this is the same machinery with a different letterhead, and it is not. Scrutiny examines a return that was filed, within its own time limits, and nobody has to establish anything before it begins. Reassessment reopens a year that had closed, and it begins only if conditions are satisfied.
That difference is the whole reason the two gates exist. A closed year is a settled thing, and the Act does not allow it to be unsettled merely because somebody would like a second look. There has to be information of a defined kind, and the reopening has to happen inside a period.
It also explains why a reply at this stage reads differently from a scrutiny submission. In scrutiny you are explaining your return. Here you are addressing whether the year should be opened at all. Those call for different documents and a different tone, and our income tax notice reply page deals with the ordinary notices that are not this.
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It is also worth separating this from the other things that arrive from the Department and get called the same name at home. An intimation under the processing provision is an arithmetic comparison and is answered on its own intimation reply footing. A mistake apparent on the record is corrected by a rectification application rather than by argument. A default as a deductor is a different notice altogether, usually answered by putting the return of deductions right. None of those reopens a closed year, and none of them carries the two gates described on this page.
Section 147 is the provision under which the assessment is made once the year is open, and section 148 refers to it expressly. What it permits is to assess, reassess or recompute. Three verbs, and they describe three rather different exercises.
To assess is to tax income that was never brought to tax at all. To reassess is to look again at something that was assessed and arrive at a different figure. To recompute is to redo a calculation, which can happen without anybody suggesting that income was concealed.
It is worth knowing which of the three your matter is, because the documents that answer them differ. An assessment of something never declared is answered by showing the receipt was not taxable or was declared elsewhere. A recomputation is answered by showing the working. Confusing the two produces a reply full of indignation and short of arithmetic.
It stops at the preliminary stage. The order under section 148A(3) determines that it is not a fit case, and no notice under section 148 issues. The year stays closed.
It proceeds and ends with no change. The year is reopened, the return is filed, the material is examined and the assessment is completed without an addition. This happens, and it happens more often where the documents were produced early.
It proceeds and ends with an addition. The reassessment results in a demand, and from there the route is an appeal rather than a reply. Our first appeal page deals with that stage.
Nobody can tell you at the outset which of the three you are heading for. What can be said is that the first two become more likely when the reply is complete, supported and in time, and that is the only part of this within your control.
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Every date on this page runs from the end of the assessment year. Not from the date on the notice, not from the day it reached you, and not from the financial year in which the transaction happened. The assessment year.
That single habit prevents most of the confusion in this area. A notice received in one year may relate to a year four back; a person who computes from the envelope gets an answer that is wrong by years. So before anything else, find the assessment year printed on the notice, write it down, and work from it.
A worked example of the counting. Assessment year 2023-24 ends on 31 March 2024. Three years from the end of it runs to 31 March 2027, which is the outer date for a show-cause notice in an ordinary case. Three years and three months runs to 30 June 2027, which is the outer date for the notice that reopens the year. Same year, two dates, three months apart.
Almost every account of this subject gives a single number and moves on. The Act gives two, and the reason it gives two is the preliminary stage. Once the law inserted a show-cause step before the reopening, it had to say by when that step must begin as well as by when the reopening itself must happen, because otherwise a show-cause notice could issue on the last permissible day and leave no time for anything to follow it.
So section 149, which is headed Time limit for notices under sections 148 and 148A, now carries both. Sub-section (1) sets the limits for the notice that reopens the year. Sub-section (2) sets the limits for the show-cause notice that precedes it. The second set is shorter by three months in each case.
A person who knows only one of those numbers will compute the wrong answer in half the files. A person who knows both can look at a notice, see which kind it is, and say immediately which of the four dates applies.
| Which notice | Ordinary case | Where fifty lakh or more is shown |
|---|---|---|
| Show-cause notice under section 148A | Three years from the end of the assessment year | Five years from the end of the assessment year |
| Notice under section 148 | Three years and three months | Five years and three months |
The ordinary outer limit for the notice that reopens a year is three years and three months from the end of the relevant assessment year, and that is where most files sit, because most files are not about fifty lakh rupees.
The period is expressed as an elapsed one. No notice shall be issued if three years and three months have elapsed from the end of the relevant assessment year, unless the case falls under the clause dealing with larger amounts. The structure is a prohibition with an exception, not a permission with a condition, and that ordering matters when you are reading a notice that is close to the line.
The practical effect for a reader is that the ordinary limit is the default and the longer one has to be earned. A notice issued beyond the ordinary period is not simply a late notice; it is a notice that can only stand if the officer is in the position the exception describes. That is a question you are entitled to raise rather than assume away.
For the show-cause notice the ordinary limit is three years, and in the larger category five years. Both are measured the same way, from the end of the relevant assessment year, and both are three months inside the corresponding limit for the notice that follows.
This is the limit that does the real work in a live file, because the show-cause notice is almost always the first thing anybody sees. If the show-cause notice itself came after the period available for it, the question arises at the very beginning rather than months later, and it arises on a date you can compute from the notice without collecting a single document.
The first arithmetic to do, in one line. End of the assessment year, plus three years, in an ordinary case. If the show-cause notice is dated after that, put the point before you put anything else, because it does not depend on the facts and the facts take weeks to assemble.
The gap is not arbitrary and understanding it makes the whole scheme easier to hold. The preliminary stage has to be allowed to run. A show-cause notice has to be served, a period has to be given for a reply, the reply has to be considered, an order has to be passed and approval has to be obtained for it. None of that happens in a week.
So the Act stops the preliminary stage three months before it stops the reopening, which leaves exactly that much room for the stage to be completed. The three months are the procedure, expressed as a date.
There is a useful inference in that for anyone reading a notice. The design assumes the preliminary stage takes time. A show-cause notice giving a very short period is therefore not acting under any pressure the statute created, which is worth saying plainly and politely when you ask for more time.
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The longer period is available only where the escaped income amounts to or is likely to amount to fifty lakh rupees or more. That threshold is the single most consequential figure in this area, because it is the difference between a year that closed three years and three months ago and one that stays open for five years and three months.
Two points about how it is applied are worth having clearly. The first is that the test is on the escaped income, not on the turnover, not on the value of a transaction and not on the tax. A property worth a crore does not by itself mean fifty lakh of escaped income. The second is that the statute says amounts to or is likely to amount to, which is a lower bar than proof, and it is honest to say so rather than pretend the threshold is harder to cross than it is.
Where a notice is beyond the ordinary period and the figure asserted is near the line, that is the point on which the matter turns. It is a point of fact, and facts are answered with documents.
The Act does not let the threshold be asserted in the air. The clause requires that the Assessing Officer has in his possession books of account or other documents or evidence related to any asset or expenditure or transaction or entries which show that the escaped income amounts to or is likely to amount to fifty lakh rupees or more.
Read that as two requirements rather than one. There has to be something in the officer possession, and it has to be of a described kind, and it has to be related to one of four described things. A figure arrived at by estimation, without material of that character behind it, is not what the clause describes.
Income-tax Act, 1961, section 149(1)(b), as substituted by Act No. 15 of 2024 with effect from 1 September 2024. No notice under section 148 shall be issued if three years and three months, but not more than five years and three months, have elapsed from the end of the relevant assessment year, unless the Assessing Officer has in his possession books of account or other documents or evidence related to any asset or expenditure or transaction or entries which show that the income chargeable to tax which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more.
Section 149(2) sets the corresponding limits for a notice under section 148A at three years, and at three years but not more than five years where the income, as per the information with the Assessing Officer, amounts to or is likely to amount to fifty lakh rupees or more.
Notice the small difference between the two sub-sections. For the reopening notice the officer must have books, documents or evidence in his possession. For the show-cause notice the test is framed by reference to the information with the officer. The preliminary stage is, by design, the stage at which the position is still being established.
Until 31 August 2024 the limit in the fifty lakh category was ten years from the end of the relevant assessment year. From 1 September 2024 it is five years and three months. Half the period, and more than half the anxiety, removed in a single amendment.
This is the most widely repeated out-of-date fact in the whole subject. It is repeated by people who dealt with a reassessment three years ago and remember what they were told then, and it is repeated in material written before the amendment and never revised. It frightens people into decisions they would not otherwise make.
The staleness test, in ten seconds. Search whatever you are reading for the words ten years. If a page describing the current position still contains them in this context, it was written before September 2024 and has not been looked at since, whatever date appears at the top of it.
The same test is worth applying to advice given in person. It is not that the person is being careless; it is that this provision has been rewritten twice in four years and remembering a number from the last time is a reasonable thing for anybody to do and a dangerous thing to rely on.
A change in the limits does not reach backwards and reopen years that had already closed under the old ones, and it does not close years that were open. Which text governs depends on the year and on when the notice was issued, and the text in force before 1 September 2024 was differently framed.
One feature of that earlier text matters a great deal in old files and has quietly disappeared from the current one. It contained a proviso barring a notice for an assessment year beginning on or before 1 April 2021 where the notice could not have been issued at that time because it was already beyond the limit then specified. In other words, a year that had died under the pre-2021 rules stayed dead.
That proviso is not in the section as it now reads, because the current section does not need it. But it is still the governing provision for the years it was written about, and a file concerning one of those years is read against the superseded text rather than the printed one. If you are looking up the section online and finding nothing that matches your papers, that is usually why.
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You can do this yourself in two minutes and you should, before anybody advises you about anything, because the answer shapes everything that follows.
Write down the assessment year from the notice. Not the financial year of the transaction and not the year on the covering letter.
Write down the last day of that assessment year. It ends on 31 March.
Decide which category the notice puts you in. Under fifty lakh, or fifty lakh and above as asserted by the officer.
Add the period. Three years or five years for a show-cause notice; three years and three months or five years and three months for a notice reopening the year.
Compare that date with the date on your notice. One of three things is true: comfortably inside, close to the line, or outside.
If the answer is comfortably inside, the time gate is not your point and nothing is gained by arguing it. If it is close to the line, the exact dates of issue and service become important and should be established from the record. If it is outside, that is the first thing your reply says, and it says it before anything about the facts.
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The second gate is what the notice rests on, and this is where the current law is more helpful to an ordinary reader than most people realise. Both sections turn on the officer having information which suggests that income chargeable to tax has escaped assessment, and that expression is not left to ordinary language. Section 148(3) defines it, for the purposes of both sections, and the definition is a list.
Six categories. That is the whole of it. If what the notice rests on is not within one of the six, the foundation the Act requires is not there, and that is a question of law rather than a question about your documents.
This is worth contrasting with how the old provision worked. Under the pre-2021 law the condition was that the officer had reason to believe income had escaped assessment, which is a state of mind rather than a category, and litigating it meant litigating what was in somebody head. A closed list is a different kind of thing. It can be checked.
The question that follows from this, and it is a short one. Which of the six is being relied on. Put it in writing, in one sentence, early. The answer tells you what the case is, and a reply written before you know the answer is a reply to a case you have guessed at.
The first head is any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time. In practice this is the broadest of the six and the one most notices rest on, because it is the head through which material surfacing from the Department own systems and data comes.
Readers often expect to be told what the risk management strategy says. It is formulated by the Board and is not a published rulebook that a taxpayer can read off and apply, and anybody claiming to tell you exactly what triggers it is describing their impression rather than a document. The reliable point is a structural one: this is a defined head, information routed through it has a statutory home, and the officer can be asked to say so.
What this head tends to look like in a real file is an entry about a transaction that the Department has from a third party. A purchase of property, a large cash deposit, a securities transaction. The reply to it is almost always documentary, because the question being asked is not whether the transaction happened but whether it was accounted for.
One failure mode under this head is worth knowing about because it is common and entirely curable. Third-party data is attached to a person by identity, and where identity records do not agree the data attaches to the wrong person or fails to attach to the right one. A name spelt differently on one record, or an identifier that was never linked, is enough. Where that is what has happened, the answer is partly documentary and partly a correction of the record itself, and getting the identifiers linked is worth doing in any event so the same thing does not recur next year.
The second head is any audit objection to the effect that the assessment for the relevant assessment year has not been made in accordance with the provisions of the Act. This is a head worth recognising because a notice resting on it has a very different character from one resting on third-party data.
Here nobody has discovered a new transaction. Somebody auditing the Department work has formed the view that the law was applied incorrectly to material that was already on the record. The dispute is therefore about the treatment of known facts, and the answer to it is usually an argument rather than a document.
If this is the head, the question to work on with your accountant is whether the original treatment was defensible. That is a technical question and it belongs to somebody qualified to answer it; our accounting services and bookkeeping work sits alongside this page rather than inside it.
The third head is any information received under an agreement referred to in section 90 or section 90A of the Act. Those are the provisions under which India enters into agreements with other countries and specified territories, and information flowing under such an agreement is expressly a head.
A notice on this basis usually concerns an asset or an account outside India. The documents that answer it are therefore foreign documents, and the first practical difficulty is almost always obtaining them rather than deciding what to say.
If the information is of this kind, start the document-gathering on the day you read the notice, before drafting anything. Foreign bank confirmations and registry extracts take weeks, and a request for time supported by evidence that you have already applied for the documents reads very differently from one that is not.
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It is also the head about which the least can usefully be said in general terms, because what it covers in a given matter depends on what was actually received rather than on a description that can be printed in advance. So the honest treatment of it on a page like this is structural rather than detailed: know that the head exists, know what follows from it, and ask whether it is the one in play. A page that claimed to tell you more than that would be telling you about its author impressions.
One further point is worth separating out, because it causes confusion. The disapplication attaches to how the information reached the officer, not to how serious the matter is. A small matter can arrive through that route and a large one through another. Nothing about the size of the figure tells you which head you are under.
The fourth head is any information made available to the Assessing Officer under the scheme notified under section 135A. This head carries a consequence the other five do not, and it is dealt with in its own section further down this page, because where the information comes through that scheme the preliminary stage does not apply at all.
It is therefore the head most worth identifying early. If a notice under section 148 has arrived with no prior show-cause notice, the first question is whether this is the reason. If it is, the absence of the preliminary stage is not an irregularity. If it is not, a stage that the Act requires has been skipped.
There is a second reason to obtain the order rather than work from the description of it. An order affecting one assessment year may be said to require action in another, and whether it does is a question of what the order decided rather than of what somebody has concluded from it. A reply that quotes the order back and shows what it does and does not reach is a short reply that is hard to answer loosely.
The fifth head is any information which requires action in consequence of the order of a Tribunal or a Court. The trigger here is an order, and the notice should be able to identify it.
A notice on this footing is often consequential in a narrow sense. Something was decided in one proceeding, and giving effect to it requires a step in another year or in another person assessment. The useful first move is to obtain the order and read it, because the scope of what follows is set by what the order actually says rather than by how the notice characterises it.
Where the order is one in your own matter, you may already have it. Where it is an order in somebody else proceeding, ask for it, and ask for it specifically rather than asking generally for the material.
The sixth head is any information in the case of the assessee emanating from a survey conducted under section 133A, other than under sub-section (2A) of that section, on or after 1 September 2024. Two limits are built into the head itself, and both are easy to miss.
The first is the exclusion of the specified sub-section, so not every survey falls within the head. The second is the date: the head speaks of a survey conducted on or after 1 September 2024. Those are conditions written into the definition, and where a notice rests on a survey it is fair to establish that the survey answers them.
What to check on the papers. Which provision the survey was conducted under, and when. Both are facts, both are in the Department own record, and both are capable of being asked for in a single line.
The current definition is shorter than the one it replaced, and the omission is worth knowing about because it is the kind of thing that makes an older note on the subject misleading.
The superseded version carried a further Explanation which treated searches, requisitions and certain seizures as deemed information. That Explanation is not in the current text. The provisions dealing with those situations exist elsewhere in the Act and this page does not attempt to set them out; the point here is narrower and purely about reading. A list that used to have an additional limb no longer has it, and a comparison drawn from an older commentary will not match the section as it now reads.
The same caution applies to the general requirement of prior approval. Under the superseded text a notice under section 148 required prior approval of the specified authority in every case. In the current text that requirement appears in a narrower form, while the order at the preliminary stage continues to require prior approval. Where approval matters in your matter, read the version of the section that applies to your year rather than the one on the screen.
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Suppose you ask which head is relied on and the answer, when it comes, does not sit within any of them. What then?
Honestly: it is a point to take, carefully and in the reply, and it is not a point that ends the matter by itself. The officer may describe the same material differently, may identify a head you had not considered, or may be right where you thought he was wrong. What the point does is put the question on the record at the stage where the Act intends it to be raised, which is the stage before the year is reopened.
What it is not is a reason to say nothing else. A reply that takes the foundation point and also answers the substance is stronger than one that stakes everything on a single argument, because if the argument is not accepted the file still contains your explanation. A reply that stakes everything and loses leaves the officer with only the Department version of the facts.
What we will not do with this point. We will take it where the material genuinely does not fit, and we will say so where it plainly does. A foundation objection manufactured for a file that does not support one is a sentence the other side quotes back at you later, and it costs more than it buys.
This is the change nobody announced and everybody feels. Section 148A(2) provides that on receipt of the show-cause notice the assessee may furnish a reply within such period as may be specified in the notice. That is the whole of it. There is no floor and no ceiling in the sub-section.
The provision it replaced was framed differently. It carried a range, seven to thirty days, extendable on application. A person receiving a notice under that version could look at the Act and know that a period shorter than seven days was not permissible. A person receiving one today cannot, because the Act now leaves the period to the notice.
What this means in practice, stated plainly. A short period is not automatically defective. The old reassurance that there must be at least a week is gone. So the response to a short period is not to assume it will be extended; it is to ask for more, immediately, in writing, with the acknowledgement kept.
One qualification belongs here. This is not a claim that a period of any length whatsoever is unobjectionable; what can be said from the text itself is simply that the statutory minimum no longer exists, and that is enough to change what a sensible person does on the day the notice arrives.
If one habit out of this entire page is worth adopting, it is this one. The letter asking for time should go out on the day the notice is read, not after the documents have been looked for and found wanting.
The reason is not politeness. It is that a request made on day one is a request made by somebody who is taking the notice seriously, and a request made on day six is a request made by somebody who has run out of time. Those two letters say different things about the file even when the words are identical, and the person reading them knows the difference.
The request should also say why. Not at length, and without complaint: the documents concern a transaction of a stated year, they are held by a bank or a registry, they have been applied for on a stated date. A reason supported by a fact is a different document from a reason that is an assertion.
Two things in one letter. Ask for the material relied upon and ask for time, in the same letter, on the same day. They belong together: the time you need depends on what the case turns out to be, and saying so is the most natural justification there is for asking.
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A notice sometimes describes the information in a sentence and sometimes encloses it. Where it has not been supplied, ask. The request is ordinary, it is made in writing, and it should identify what is wanted rather than ask generally for everything.
The justification for it is not merely practical. When the Supreme Court ran the 2022 conversion exercise it did not simply direct that assessees should reply; it directed that the officers supply the information and material relied upon, and it set a period for that handover before the period for the reply. The sequence was handover first, answer second.
That ordering is the point to carry into a current matter. It is not an argument that the same periods apply today, because they do not. It is the observation that the Court treated supply of material as logically prior to the answer, and a request framed in those terms reads as reasonable rather than as delay.
The assessment year and the notice reference, at the top. Obvious, and omitted more often than you would expect in replies people write themselves.
A short statement of what the notice says the information is. In your own words, so that it is clear what you understood yourself to be answering.
The answer to that, and nothing wider. If the notice is about one transaction, the reply is about one transaction.
An index of documents, numbered. Each statement in the reply pointing to a number.
What you could not obtain, named. With what you have done about it and when.
Any point on time or on the head of information, stated once and clearly. Not repeated, not argued at length, and not substituted for the explanation.
Length is not a virtue here. A reply of three pages with twenty indexed documents is a better document than one of fifteen pages with none, and the officer reading it has a great many files.
The commonest failure is not dishonesty. It is a reply that answers the wrong thing, at the wrong length, with nothing attached.
The next commonest is a reply that argues about the Department rather than about the year. Complaints about the system, about how long the notice took to arrive, about having been through this before: all of it may be justified and none of it answers the question asked, and it occupies the space where the documents should have been.
The third is a reply written to be impressive. Long sentences, citations to decisions that do not bear on the point, confident assertions about what the law requires. It reads, to somebody who deals with these every day, as a reply with nothing in it, which is usually what it is.
And one that cannot be repaired afterwards. A reply that states something the documents later contradict. Everything on this page about organising documents first exists to prevent that one outcome, because an explanation that changes is worse than an explanation that was incomplete.
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The same discipline applies to the tone. A reply at this stage is not the place to set out everything that is wrong with how the matter has been handled, and a reply that does will be read as a reply with no answer in it. State the position, attach the paper, and leave the rest.
Where something genuinely cannot be confined, say so and explain why in one sentence. If a transaction only makes sense against two earlier years, the reply can say that and produce the two years. That is not ranging widely; that is answering the question properly, and the difference is whether the extra material is needed to make the answer intelligible or has simply been added.
At this stage the question is whether the year should be reopened, and the question is tied to specific information. It is not an invitation to account for everything that happened in that year, and treating it as one is both exhausting and counterproductive.
There is a practical reason for restraint beyond effort. Material volunteered at this stage is material on the record, and a reply that ranges across the whole year can introduce subjects nobody had raised. The discipline is to answer what was asked, completely, and to stop.
That discipline is easier to hold when the file is organised before the drafting starts, which is what our legal file management and file preparation work is for. A person drafting out of a shoebox writes long because they are thinking aloud.
Every sentence in a reply that is not supported by a document is a sentence somebody has to take on trust, and nobody at this stage is obliged to.
The useful exercise is mechanical. Take the draft, go through it line by line, and against each factual statement write the document number that proves it. Where there is no number, either find the document or change the sentence. By the end you will have a reply in which every assertion is anchored, and you will have discovered which parts of your account you cannot actually support, which is far better discovered now than later.
| What the notice says | What answers it |
|---|---|
| A property transaction appears against your name | The conveyance, the bank statements showing each contributor share, and the return for the year if one was filed |
| A cash deposit of a stated amount | The bank statement, the books for the period, and the record of what the receipt was |
| A receipt treated as income | Whatever establishes its character, together with the treatment of it in the accounts |
| A figure differing from the return | The computation, shown step by step, with the source document for each figure |
Where a document has to be verified before it can be relied on, our document verification work does that; where the property itself is the subject, a title verification may be the faster way to establish what actually happened.
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A good proportion of these matters are not about concealment at all. The money moved, everybody agrees it moved, and the dispute is about what it was.
A transfer from a relative treated as income rather than as a gift. A repayment of a loan treated as a receipt. A contribution by a co-owner treated as the purchaser money. In each case the answer is a document establishing the character of the payment, and in each case the absence of that document at the time is why the question arose.
This is the strongest argument for writing things down when they happen rather than when they are questioned. A gift deed executed at the time answers the first in a line. A loan agreement answers the second. Neither can be created afterwards, and an attempt to do so is the worst thing that can be put in one of these files.
Sometimes the honest answer is that something was missed. A receipt was not declared, an entry was wrong, a figure was understated. The question then is not how to avoid saying so but how to say it properly.
Saying so properly means stating what it was, how it arose, what the correct position is, and what has been done about it, with documents. It does not mean apologising at length, and it does not mean volunteering a characterisation of your own conduct that nobody has asked for.
Before any such reply goes anywhere, two things have to happen. The computation has to be worked out by somebody qualified, because an admission with a wrong figure in it is worse than no admission. And you have to understand what follows from it, which is a conversation to have before the reply is signed rather than after. We will raise both, and we will not file an admission that has not been through them.
There is no general rule that admitting something improves a matter, and anybody who offers you one is guessing. What can be said is narrower: an incomplete explanation that the documents later contradict is the single most damaging thing in one of these files, and it is entirely avoidable.
Where the assessee is a charitable institution rather than an individual, there is usually a prior question sitting underneath the notice about the standing of the institution itself, and that question has its own machinery and its own dates. Our trust registration page deals with that side of it; this page deals with the notice.
Once the reply is in, or the period for it has passed, the officer passes the order. The sub-section says he shall do so on the basis of the material available on record and taking into account the reply furnished, if any, and that the order determines whether or not it is a fit case to issue a notice under section 148.
The phrase taking into account the reply is doing real work and is worth noticing. It is an obligation, and it is the statutory reason a reply is worth filing even where you expect the outcome to go against you. A reply that is on the record is a reply the order has to engage with.
Read the order when it comes, and read it against your reply. The useful question is not whether it agreed with you but whether it dealt with what you said. An order that recites that the reply was considered and then does not touch any of it is a different document from one that engages and disagrees, and the difference matters at every later stage.
The order is to be passed with the prior approval of the specified authority, and the Explanation to section 148A tells you who that is: the specified authority referred to in section 151.
Two words there are worth separating. Prior means the approval comes before the order, not afterwards as a ratification. Approval means an application of mind by the authority named, not a signature appended to a file.
What to ask, in one line. Whether the order was passed with the prior approval of the specified authority, and which authority gave it. It is a condition the sub-section imposes on the order itself, and it is a fair question to put.
This page does not set out the ranks named in section 151 or how they vary with elapsed time, because that is a provision worth reading in the version applicable to your year rather than summarised at second hand. What it does say is that approval is part of the order rather than paperwork around it.
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Section 148A(4) provides that the provisions of the section shall not apply to income escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A.
That is a complete disapplication, not a relaxation. Where it operates there is no show-cause notice, no reply at the preliminary stage and no order determining a fit case, because the section creating all three does not apply.
The practical consequence is one of the most useful things on this page. If a notice under section 148 has arrived and you have never seen a show-cause notice, do not assume a stage was skipped. Ask whether the information was received under that scheme. If it was, nothing irregular has happened and the energy is better spent on the return and the substance. If it was not, a stage the Act requires has been missed and that is a different conversation.
Income-tax Act, 1961, section 148A(4). The provisions of this section shall not apply to income chargeable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A.
Section 148, second proviso, correspondingly provides that in such a case no notice under that section shall be issued without the prior approval of the specified authority. The safeguard moves rather than disappearing: where the preliminary stage falls away, approval attaches to the notice itself.
Where the notice under section 148 does issue, it requires a return within such period as may be specified in it, not exceeding three months from the end of the month in which the notice is issued. So the officer sets the period, and the Act sets the outer boundary of what he may set.
Notice how that is measured. From the end of the month of issue, not from the date of issue and not from the date of service. A notice issued on the 2nd and a notice issued on the 28th of the same month share the same outer date.
This is a provision in your favour and it is worth knowing about, because a notice specifying a shorter period is specifying a period the officer has chosen rather than one the Act requires. Whether more can be obtained is a separate question, but the request is better made knowing what the statutory ceiling is.
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Section 148(2) provides that a return furnished after the expiry of the period specified in the notice shall not be deemed to be a return under section 139. That is a short sentence with real consequences attached to it, because a great deal in the Act is built on a return being one under section 139.
The practical instruction that follows is simple and worth following even when it is uncomfortable. File within the period. If the figures are not finally settled, file on the best basis available and deal with the refinement afterwards, rather than holding the return back until everything is perfect and losing its character in the process.
Where the filing is itself the obstacle, that is its own job, and our return filing page covers it. What should not happen is the return being delayed while somebody decides what to say in the reply. They are different documents with different deadlines.
Once a year is reopened the Department does not have unlimited time to complete the exercise. Where the notice under section 148 was served on or after 1 April 2019, the assessment, reassessment or recomputation is to be made within twelve months from the end of the financial year in which the notice was served.
Two extensions are recorded. Where a reference is made to the Transfer Pricing Officer, the period is extended by twelve months. Where the stated search situations apply, it is likewise extended by twelve months.
Why a reader should care about an outer limit on the Department. It tells you the shape of the year ahead. A matter that must be completed within a defined period is a matter in which silence for months is normal rather than ominous, and in which the activity tends to come in bursts near the end. Knowing that prevents a lot of unnecessary worry.
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Alongside the reply at the preliminary stage and the return after the notice, a third kind of document turns up in these files: objections. These are the written points taken against the reopening itself, and in the matters arising out of the earlier regime they have a particular status.
When the Supreme Court disposed of the batch in October 2024, one of the two directions it gave was that assessing officers are to dispose of the objections in terms of the law laid down by the Court. That makes the objections a document with an obligation attached: somebody has to deal with them.
So in a file of that kind, the objections are not a formality to be got through. They are the paper the next stage will be built on, and the order disposing of them is the paper that will be read against it. That is a reason to take trouble over the drafting and to attach to them whatever documents the points rest on.
Section 151A, headed Faceless assessment of income escaping assessment, empowers the Central Government to make a scheme for assessment, reassessment or recomputation under section 147, for the issuance of notice under section 148, and for conducting the procedure under section 148A. The stated objects are greater efficiency, transparency and accountability, by eliminating the interface between the income-tax authority and the assessee to the extent technologically feasible, by optimising resources through economies of scale and functional specialisation, and by introducing a team-based approach with dynamic jurisdiction. A proviso records that no direction shall be issued after 31 March 2022.
What that means for somebody answering a notice is less dramatic than the word suggests, but it is not nothing. There is no counter to attend and no officer to explain things to. The record is the reply, and whatever is not in it is not available to be relied on afterwards.
Two habits follow from that. Write for a reader who has never heard of you and has nothing except the file. And keep every acknowledgement, because the only proof that something was filed on a date is the acknowledgement that it was.
The phrase dynamic jurisdiction in the section is worth noticing for one practical reason: the person dealing with your matter may not be the person whose designation appears on the first letter. Address correspondence to the reference on the notice rather than to an individual, and keep the reference consistent on everything you send.
A reader who has just been handed a notice in the present year may wonder why anything that happened five years ago should matter. It matters because the reassessment provisions were rewritten with effect from 1 April 2021, rewritten again with effect from 1 September 2024, and in between produced one of the largest volumes of litigation the income-tax jurisdiction has seen in a generation. A notice relating to an old year may still be travelling through that litigation, and the rules that decide it are not the rules printed in the Act today.
The short history is this. Until 31 March 2021 the Department reopened an assessment under a provision that required the officer to have reason to believe that income had escaped assessment, and there was no stage at which the person was told in advance and invited to respond. From 1 April 2021 that changed: a new preliminary stage was inserted, so that before any notice reopening the year could issue, the person had to be given a show-cause notice and an opportunity to answer it.
What then happened is the part that generated the litigation. A very large number of notices were issued after 1 April 2021 in the old form, without the new preliminary stage, on the footing that pandemic-era relaxations kept the old provision alive. Those notices were challenged across the country, and High Courts quashed them in large numbers. The matter reached the Supreme Court, which did something unusual rather than simply letting the quashings stand.
The Supreme Court did not hold the old-form notices good, and it did not let them die either. It converted them. Each notice was deemed to be a notice under the new preliminary provision, and treated as a show-cause notice under it. A document issued as one thing became, by order of the Court, a different thing, and the procedure then restarted from that point.
This is worth pausing on, because it explains a confusion that still turns up in files. Somebody looks at the notice in the file, sees the old section and the old form, and concludes that the whole proceeding must be bad. It is not bad; it was converted. The question in such a file is not whether the notice looked wrong when it was posted, but whether what followed the conversion was done correctly.
If your papers contain a notice in the old form issued after 1 April 2021, followed some months later by a letter enclosing material and inviting a reply, you are almost certainly looking at the conversion working itself out. Those two documents belong together, and reading either one alone gives a misleading picture.
The decision is Union of India & Ors. v. Ashish Agarwal, decided on 4 May 2022 by M. R. Shah and B. V. Nagarathna JJ, on appeal from the Allahabad High Court. The Court recorded in terms that the order was passed in exercise of its powers under Article 142 of the Constitution, and that it was to apply PAN India, governing pending writ petitions in other High Courts raising the same point.
Two features of that are worth noticing by anyone reading the judgment for the first time. The first is that Article 142 is the power to do complete justice, and a court reaching for it is signalling that an ordinary application of the law would produce a result it is unwilling to accept. The second is the PAN India direction, which is why a decision on appeals from one High Court governs a notice issued anywhere in the country.
Union of India v. Ashish Agarwal, 4 May 2022. The impugned notices were to be deemed to have been issued under the preliminary provision as substituted with effect from 1 April 2021, and to be construed or treated as show-cause notices under its show-cause clause. The assessing officers were to provide the respective assessees, within thirty days, with the information and material relied upon. The assessees were to reply within two weeks thereafter. The requirement of conducting any enquiry with the prior approval of the specified authority was dispensed with as a one-time measure, the Court adding that such an enquiry is not mandatory in any event. All defences available to the assessees, including those available under the limitation provision, were kept open, along with all rights and contentions of both sides. The officers were then to pass orders under the ordering clause and could thereafter issue a fresh notice under the substituted provisions.
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The two periods in that direction are worth separating, because people in these files frequently remember one and not the other. Thirty days was the time the officer had to hand over the material. Two weeks was the time the person then had to answer. The second period ran from the handover, not from any date on the original notice.
Those periods were set by the Court for that one conversion exercise. They are not the periods that govern a fresh notice issued today, and quoting them in a current matter will simply confuse whoever reads your reply. Their relevance now is historical and evidential: in an old file, they tell you what ought to have happened and when, and a departure from that order is something to record.
They also carry a drafting lesson that has outlasted the exercise. The Court took it as obvious that a person cannot sensibly answer a case until the material behind it has been supplied, and it fixed the handover before the answer rather than leaving them to run together. That ordering is the reason a request for material, made early and in writing, reads as reasonable rather than obstructive.
The direction expressly preserved all defences available to the assessee, including those available under the limitation provision. That sentence did a great deal of work in the years that followed, because it meant the conversion did not cure a notice that was out of time; it only saved the notice from being struck down for having used the wrong form.
So the structure of an old-regime argument is layered. The conversion answered the form question. It left the time question exactly where it was. And it left every substantive answer on the facts untouched. A reply in such a file that argues only about the form is arguing the one point that has already been decided against it.
The useful consequence. In a converted file the time point is still live, and it is still the strongest point available, because it does not depend on persuading anybody about the facts. Work out the outer date under the law that applied to that year before spending a single sentence on the merits.
It is worth noticing what kind of question that is, because it shapes how an old file is argued. It is not a question about the person or the transaction. It is a question about whether one statute reaches into another, and the answer is the same for everybody whose year falls in the same position. That is why these matters moved in batches and why a decision in one of them governs thousands.
Running underneath all of this was a pandemic-era statute extending time limits. Where an action fell due between 20 March 2020 and 31 March 2021 and had not been completed, the time for doing it was extended to 30 June 2021. The Revenue said that extension carried the reassessment time limits with it; the assessees said it could not revive a year that had already closed.
The conversion decision of 2022 did not answer that. It said so: the question whether the notices fell within the time limits read with the extension statute was not decided there. That left a very large number of matters with the form question settled and the time question open, which is how the issue came back to the Supreme Court two years later.
The second decision is Union of India & Ors. v. Rajeev Bansal, Civil Appeal No. 8629 of 2024 with a large batch of connected appeals and transfer petitions, reported as 2024 INSC 754 and decided on 3 October 2024. The judgment was delivered by Dr Dhananjaya Y. Chandrachud, Chief Justice of India, for a Bench comprising himself, J. B. Pardiwala J and Manoj Misra J.
The two questions the Court framed were whether the pandemic-era extension statute applies to reassessment notices issued after 1 April 2021, and whether the notices issued in the months following the conversion exercise were valid. The provision at the centre of the time question was the proviso which barred a notice for an assessment year beginning on or before 1 April 2021 where the notice could not have been issued at that time under the old limitation rules.
Note what that proviso does and does not do. It is not a general rule about old years. It asks a single, closed question: on the day the new regime began, had the old clock already run out for that year? If it had, nothing in the new regime brings the year back.
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The order pronounced that day allowed the appeals filed by the Revenue in terms of the signed judgment, disposed of the assessees’ appeals in accordance with the reasons given in it, and disposed of the transfer petitions. It then gave two directions that matter to anyone whose file is still open.
The first was to assessing officers: they are to dispose of the objections in terms of the law laid down by the Court. The second was to assessees: after that has been done, those who remain aggrieved may pursue all their rights and remedies in accordance with law, save and except on the issues concluded by the judgment.
Read together, those two directions describe a live process rather than a closed one. The officer has an obligation to deal with the objections, and dealing with them is not the same as reciting that they have been considered. And the person retains everything except the questions the judgment itself settled. If your file is in this category, the practical consequence is that the objections you file are the document the next stage will be built on, which is a reason to take trouble over them.
You do not need to read either judgment to work out which world your matter sits in. Three facts on the papers settle it, and they are all on the first page.
| What to look at | What it tells you |
|---|---|
| The assessment year named in the notice | Whether the year is one of those caught by the transitional litigation at all |
| The date the first notice was issued | Whether it falls before 1 April 2021, between then and 31 August 2024, or after |
| The section printed on that first notice | Whether it was issued in the old form and therefore belongs to the conversion exercise |
Where all three point to the transitional period, the file is a historical one and the questions are those described above. Where the first notice is recent, the history is background and the live questions are the two gates. Either way the work begins by fixing the year and the dates, and that is the reason the notice itself is what we ask for, rather than a description of it.
Finally, the habit this page describes is not confined to income tax. The indirect-tax side works on the same two-stage shape: a show cause notice first, an order after it, and an appeal from the order. Different statute, different periods, same discipline. Read the notice, fix the dates, ask what it rests on, answer that and nothing wider.
This service is listed at ₹7,999 with a turnaround of 7 – 21 days, and that is for the work described on this page: reading the notice and the material, fixing the dates, settling which gate questions arise, assembling the documents, and drafting the reply or the objections for your signature.
It does not include anything done before a court. If the matter goes to a writ petition, an appeal or any proceeding requiring appearance, that is advocacy and it is charged by the advocate who does it.
Court work is for your advocate, whose fee is engaged and paid by you directly; we do not quote, collect or share it
Nor does it include the opinion of a chartered accountant on the tax treatment of a transaction. Where the real question is whether a receipt was taxable at all, or how a gain should have been computed, that is a question for your accountant, and we would rather tell you so at the start than produce a reply that reads confidently about something nobody has actually worked out.
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| Stage | What happens | Who does it |
|---|---|---|
| Reading | The notice, the enclosures and the assessment year are read before anything is discussed, and the outer dates are computed from the year rather than from the date on the envelope | Us |
| Asking | Where material has not been supplied, a written request goes out at once, together with a request for time where the period given is short | Us, for your signature |
| Gathering | The documents that answer the specific information are listed and collected; what cannot be obtained is identified early rather than at the end | You, with our list |
| Drafting | The reply is written to the information, with the documents indexed and referred to by number | Us |
| Checking | You read it, correct anything that does not match your own knowledge, and sign it | You |
| Filing | The reply is filed by the route the notice specifies, and the acknowledgement is kept | Us, in your account |
| After | The order is read when it comes, and you are told plainly which of the two outcomes it is and what follows | Us |
Nothing in that sequence involves telling you what to say. The facts are yours. What we do is make sure the facts are answered in the form the provision expects, supported by paper, and sent in time.
A reply asserting a fact you have not told us is true. The reply goes in your name and you carry it. If an explanation is being constructed rather than stated, the file stops there.
Any paper bearing a date on which it was not in fact sent. No letter is dated earlier than the day it is written, and no acknowledgement is described as obtained when it has not been.
A reply that invents a source for money. Where the origin of a credit is genuinely not remembered or not documented, the honest reply says what can be shown and what cannot. The alternative is an explanation that collapses the first time anybody tests it.
An argument that the notice is bad because it is inconvenient. We will take a time point where the dates give one and a foundation point where the information does not fit. We will not manufacture either.
A reply for somebody who has not read it. You sign it, which means you read it first, and we would rather lose a day to that than have you discover its contents later.
Since 1 April 2026 the Income-tax Act, 2025 has been the Act in force, the Income-tax Rules, 2026 having been notified on 20 March 2026, and it replaces the Income-tax Act, 1961. Every section number on this page is a 1961 Act number, and that is deliberate, because the papers in a reassessment matter will carry those numbers.
The transition is governed by section 536 of the 2025 Act, and the Income Tax Department has published its own reading of it. Under section 536(2)(c), a proceeding pending at commencement, an appeal included, continues under the 1961 Act for a tax year beginning before 1 April 2026. Anything the specific savings do not reach is covered by section 536(4), which applies section 6 of the General Clauses Act, 1897.
What that means for an ordinary reader is simple enough. If your reassessment relates to a year before the changeover, it runs under the Act whose numbers are on your notice, and it will go on doing so. We tell you in writing which Act your own matter runs under before we start, and we do not substitute a 2025 Act number for a 1961 Act number unless the Department has published that mapping.
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Everything on the departmental side of this is documentation. A reply to a show-cause notice, objections, a return filed in response to a notice, a request for material, a request for time: these are papers prepared, signed and filed, and that is the work described here.
The moment a matter leaves that side it becomes advocacy. A writ petition challenging the notice, an appeal against the order of reassessment, an application before a tribunal, any appearance at all: those are conducted by an advocate, and they are engaged and paid by you directly. We will say when we think the line has been reached, and we would rather say it early than let a file drift across it unnoticed.
Court work is for your advocate, whose fee is engaged and paid by you directly; we do not quote, collect or share it
None of that is small print. It decides what happens in the file on an ordinary working day. Where the right next step is a petition or an appeal, we will say so and say it early, and we would rather hand a file across in good order than keep it and do a slightly wrong thing with it well.
That the notice will be dropped. Whether it is a fit case to proceed is decided by the officer on the material and your reply. A reply can be complete and well supported and the officer can still decide to go on.
That no demand will follow. Reassessment can end in no change, and it can end in an addition. Which it is depends on facts, not on drafting.
That an extension will be granted. Time may be asked for. Whether more is given is not in your hands or ours, which is exactly why the asking should happen on day one rather than on day six.
That a particular officer will see it a particular way. Anybody offering you that is selling something that does not exist.
A figure for what you will end up paying. That depends on the computation, and the computation depends on documents that have not been seen yet.
If a notice is in front of you now, two things are worth doing today and neither of them requires a decision about anything else.
Write and ask for the material relied upon, if it has not been supplied, and in the same letter ask for time if the period given is short. Keep the acknowledgement. That letter costs nothing, takes twenty minutes, and afterwards it does more work than anything else in the file, because it fixes the day on which you asked.
Then find the assessment year on the notice and work out, from the year rather than from the date you were handed the paper, which of the outer limits applies and when it fell or falls. You may find the answer helps you. You may find it does not. Either way you will be arguing from a date rather than from an impression, and so will whoever advises you next.
What to send us. The notice and every enclosure, as they are, without a covering explanation. The assessment year. The date you received it and how. And the return for that year, if one was filed. Four things, and the view comes back from those.
Forward the notice and its enclosures as they are. You will get the assessment year, the outer dates, and a straight view on which of the two gate questions is actually open in your matter, before a word of reply is written.
Was it in time, and what does it rest on. Those are the questions this page has been about, and they come first not because they are clever but because they are the only two that can be answered from the notice itself, on the day it arrives, before anybody has gathered a single document.
The money question is real and it will have to be answered. It is simply the third one.
This page is built on the reassessment provisions of the Income-tax Act, 1961 as substituted by Act No. 15 of 2024 with effect from 1 September 2024, read with the decisions of the Supreme Court on the earlier regime. Section 148 is headed Issue of notice where income has escaped assessment and provides that before making the assessment, reassessment or recomputation under section 147 the Assessing Officer shall, subject to section 148A, issue a notice to the assessee along with a copy of the order passed under sub-section (3) of section 148A, requiring him to furnish, within such period as may be specified in the notice, not exceeding three months from the end of the month in which the notice is issued, a return of his income or the income of any other person in respect of which he is assessable. By the first proviso no notice shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee. By sub-section (2), a return furnished after the expiry of the period specified in the notice shall not be deemed to be a return under section 139.
On what the Act treats as information, section 148(3) states that for the purposes of section 148 and section 148A, information which suggests that income chargeable to tax has escaped assessment means any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of the Act; any information received under an agreement referred to in section 90 or section 90A; any information made available to the Assessing Officer under the scheme notified under section 135A; any information which requires action in consequence of the order of a Tribunal or a Court; and any information in the case of the assessee emanating from a survey conducted under section 133A other than under sub-section (2A) of that section, on or after 1 September 2024.
On the stage before the notice, section 148A is headed Procedure before issuance of notice under section 148. By sub-section (1), where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment, he shall, before issuing any notice under section 148, provide an opportunity of being heard to the assessee by serving a notice to show cause why a notice under section 148 should not be issued. By sub-section (2) the assessee may furnish a reply within such period as may be specified in the notice. By sub-section (3) the Assessing Officer shall, on the basis of the material available on record and taking into account the reply furnished, if any, pass an order with the prior approval of the specified authority determining whether or not it is a fit case to issue a notice under section 148. By sub-section (4) the section does not apply where the Assessing Officer has received information under the scheme notified under section 135A. The Explanation provides that specified authority means the specified authority referred to in section 151.
On time, section 149 is headed Time limit for notices under sections 148 and 148A. Sub-section (1) provides that no notice under section 148 shall be issued for the relevant assessment year if three years and three months have elapsed from the end of that year, unless the case falls under clause (b); and under clause (b), if three years and three months but not more than five years and three months have elapsed from the end of that year, unless the Assessing Officer has in his possession books of account or other documents or evidence related to any asset or expenditure or transaction or entries which show that the income chargeable to tax which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. Sub-section (2) sets the corresponding limits for a notice under section 148A at three years, and at three years but not more than five years where the income as per the information with the Assessing Officer amounts to or is likely to amount to fifty lakh rupees or more. The text in force before 1 September 2024 was differently framed and included a proviso barring a notice for an assessment year beginning on or before 1 April 2021 where the notice could not have been issued at that time on account of being beyond the limit then specified.
On the faceless scheme and on completion, section 151A is headed Faceless assessment of income escaping assessment and empowers the Central Government to make a scheme for the purposes of assessment, reassessment or recomputation under section 147, for the issuance of notice under section 148, and for conducting the procedure under section 148A, so as to impart greater efficiency, transparency and accountability by eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible, by optimising utilisation of resources through economies of scale and functional specialisation, and by introducing a team-based approach with dynamic jurisdiction; a proviso to sub-section (2) provides that no direction shall be issued after 31 March 2022. On completion, the Department records that where a notice under section 148 was served on or after 1 April 2019 the assessment, reassessment or recomputation is to be made within twelve months from the end of the financial year in which the notice was served, with the period extended by twelve months where a reference is made to the Transfer Pricing Officer and in the stated search situations.
On the earlier regime, in Union of India & Ors. v. Ashish Agarwal, decided on 4 May 2022 by M. R. Shah and B. V. Nagarathna JJ, the Supreme Court directed that notices issued in the old form after 1 April 2021 be deemed to have been issued under section 148A as substituted by the Finance Act, 2021 and be construed or treated as show-cause notices under section 148A(b); that the Assessing Officers provide the respective assessees with the information and material relied upon within thirty days, the assessees replying within two weeks thereafter; that the requirement of conducting any enquiry with the prior approval of the specified authority be dispensed with as a one-time measure; and that all defences available to the assessees including those available under section 149 be kept open. The order was expressly passed in exercise of the powers under Article 142 of the Constitution and was stated to be applicable PAN India. In Union of India & Ors. v. Rajeev Bansal, Civil Appeal No. 8629 of 2024 and connected matters, 2024 INSC 754, decided on 3 October 2024 by a Bench of Dr Dhananjaya Y. Chandrachud, Chief Justice of India, J. B. Pardiwala J and Manoj Misra J, the Court took up whether the pandemic-era extension statute applies to reassessment notices issued after 1 April 2021 and whether the notices issued thereafter were valid; the appeals of the Revenue were allowed in terms of the signed judgment, the assessing officers were directed to dispose of the objections in terms of the law laid down, and aggrieved assessees were left free to pursue their rights and remedies in accordance with law save on the issues concluded by the judgment.
On which Act governs, the Income-tax Act, 2025 has been in force since 1 April 2026, the Income-tax Rules, 2026 having been notified on 20 March 2026. Section 536 of the 2025 Act carries the repeal and savings, and the Income Tax Department records in its published transition material that under section 536(2)(c) a proceeding pending on commencement, including an appeal, continues under the 1961 Act for a tax year beginning before 1 April 2026, and that section 536(4) applies section 6 of the General Clauses Act, 1897 to anything the specific savings do not reach.
Three things are left off this page on purpose. no figure is given for any tax, interest or penalty, no computation is offered for any assessment year, and no section number of the Income-tax Act, 2025 is substituted for a section number of the 1961 Act. The first two depend on facts and documents that differ in every matter. The third awaits a published mapping, and guessing at it would put a wrong number into a reply.
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