ss.147–152 — Search cases under reassessment (1 April 2021 – 31 August 2024)
The middle regime: a search treated as deemed information, a section 148 notice without any section 148A stage, and the pre-September 2024 text of sections 147 to 151 frozen in place by section 152(3).
Applies to searches and requisitions between 1 April 2021 and 31 August 2024 — and, with one difference noted below, to surveys in that window. The Finance Act 2021 discontinued section 153A for searches from 1 April 2021 and moved those cases into the reassessment machinery; the Finance (No. 2) Act 2024 closed the window from 1 September 2024 by bringing back block assessment. Section 152(3), inserted by the 2024 Act, provides that where a search, requisition or survey (other than under section 133A(2A)) took place in this window, sections 147 to 151 apply as they stood immediately before 1 September 2024 — so the text of those sections as it stood on 31 August 2024 continues to govern these matters, whatever the date of the notice or order.
Income-tax Act, 1961
ss.147–152
Income-tax Act, 2025
No equivalent — window closed 31 August 2024
In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.
In short
For a search initiated under section 132, or a requisition made under section 132A, between 1 April 2021 and 31 August 2024, there is no assessment under section 153A and no block assessment. The case proceeds under the reassessment provisions of the Income-tax Act, 1961, with three features particular to search cases. First, the proviso to section 148A as it stood in that window excludes such cases from that section, so there is no show-cause notice under section 148A(b) and no order under section 148A(d) — the Assessing Officer proceeds directly by notice under section 148. (A survey-origin case is different: Explanation 2 deems the information, but the proviso does not reach surveys, so the section 148A procedure still applied.) Second, Explanation 2 to section 148 deems the Assessing Officer to have information suggesting that income has escaped assessment in the assessee's own search or requisition, in a survey, and, with the approval of the Principal Commissioner or Commissioner, where seized assets belong to or seized material pertains or relates to the assessee. Third, section 152(3), inserted by the Finance (No. 2) Act 2024, provides that sections 147 to 151 apply to these cases as they stood immediately before 1 September 2024. The notice therefore requires the prior approval of the specified authority under the pre-2024 section 151, must be within the time limits of the pre-2024 section 149, and the reassessment order is made under section 147 within the period in section 153(2). No approval under section 153D is required, and penalty on undisclosed income of the specified previous year is under section 271AAB.
What the provision does
Routes searches initiated in a defined three-and-a-half-year window through the reassessment machinery instead of a search-specific scheme, dispensing with the section 148A stage, deeming the search to be the information, and — through section 152(3) — fixing the applicable text of sections 147 to 151 as it stood before the 2024 rewrite.
Threshold questions
- Was the search initiated between 1 April 2021 and 31 August 2024 — earlier searches fall under sections 153A/153C, later ones under block assessment
- Which limb of Explanation 2 to section 148 is invoked — the assessee's own search or requisition, a survey, or seized assets or material of another person — and, for the other-person limbs, was the Principal Commissioner's or Commissioner's approval recorded before the notice
- Was the section 148 notice issued with the prior approval of the specified authority under the pre-September 2024 section 151 — the Principal Commissioner, Principal Director, Commissioner or Director within three years of the end of the relevant assessment year, and the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General beyond that
- Is the notice within the pre-September 2024 section 149 — three years from the end of the relevant assessment year, extendable to ten years only where books, documents or evidence reveal escaped income represented in an asset, expenditure or entries of fifty lakh rupees or more
- For an assessment year beginning on or before 1 April 2021, could a notice under section 148 or section 153A/153C have been issued at all under the law as it then stood — if not, the first proviso to section 149 bars it
- Was the reassessment order made within the period in section 153(2) — and, for any assessment or reassessment already pending when the search was initiated, has section 153(3A) extended that pending proceeding's time limit by twelve months
- Does the addition rest on the seized material, or on an estimate built around it
In practice
The recurring disputes.
A section 148A notice where none was required, or none where one was
The proviso to section 148A turns on facts — whether a search was initiated or a requisition made in the assessee's case, or whether the approval on seized material of another person was actually recorded before the notice. Where the Department has issued a section 148A(b) notice in a search case, it has followed a procedure the Act did not require, and the question is whether anything turns on it; where it has skipped the stage claiming a search nexus that the record does not bear out, the omission goes to jurisdiction.
Sanction from the wrong authority
Because section 152(3) applies section 151 as it stood before 1 September 2024, sanction for a search-origin notice in this window must come from the Principal Commissioner or Commissioner where three years or less have elapsed, and from the Principal Chief Commissioner or Chief Commissioner where more than three years have. Notices issued after 1 September 2024 for searches in the window, sanctioned under the rewritten section 151 by an Additional or Joint Commissioner, are tested against the earlier text.
The ten-year reach and the fifty-lakh threshold
Beyond three years, the pre-2024 section 149 requires books, documents or evidence in the Assessing Officer's possession revealing escaped income represented in the form of an asset, expenditure or entries amounting to fifty lakh rupees or more. Seized material that suggests a pattern, and an extrapolation built on it, is not the same as evidence revealing an asset or expenditure of that value for the year in question — and the threshold is examined year by year.
Deemed information is not deemed escapement
Explanation 2 supplies the information; it does not supply the addition. As originally enacted it deemed information only for the three assessment years preceding the year of search; the Finance Act 2022 removed that limit, leaving section 149 as the outer boundary. The seized material still has to support an escapement of income for each year reassessed, and an addition that treats the search itself as proof of escapement across every year in reach is an estimate dressed as a finding.
No abatement, no section 153D
Unlike section 153A, nothing abates: a pending assessment continues alongside the reassessment, and the two have to be reconciled. Nor is there any approval under section 153D, which attaches only to orders for the years covered by sections 153A and 153C. The safeguard in this window is section 151 sanction for the notice, not approval of the order — and it is the sanction, therefore, that carries the weight of the challenge.