s.148A — Procedure before issuing a reassessment notice

Currently operative

Two texts. The section was inserted by the Finance Act 2021 with clauses (a) to (d) and a proviso, and substituted by the Finance (No. 2) Act 2024 with effect from 1 September 2024 as sub-sections (1) to (4). The 2021 text still governs every notice issued before 1 September 2024 and — by section 152(3) — every case originating in a search, requisition or survey between 1 April 2021 and 31 August 2024. Under that text the proviso excluded search and requisition cases from the section altogether; the current text contains no search exclusion, because searches from 1 September 2024 are assessed under Chapter XIV-B instead, and its only carve-out is sub-section (4) for information received under the section 135A scheme.

Income-tax Act, 1961

s.148A

Income-tax Act, 2025

s.281

In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.

In short

Section 148A of the Income-tax Act, 1961 requires the Assessing Officer, before issuing a notice under section 148, to provide the assessee an opportunity of being heard by serving a show-cause notice accompanied by the information suggesting that income chargeable to tax has escaped assessment, to consider the reply, and to pass an order — with the prior approval of the specified authority under section 151 — determining whether it is a fit case to issue a notice. In the current text, in force from 1 September 2024, the show-cause is under sub-section (1), the reply under sub-section (2) within the time the notice specifies, and the order under sub-section (3). In the text in force from 1 April 2021 to 31 August 2024 the same steps were clauses (b), (c) and (d), the reply period was not less than seven and not more than thirty days, and the order had to be passed within one month from the end of the month in which the reply was received. The order must engage with the objections raised rather than merely record that they have been considered. Under the 2021 text the proviso excluded cases originating in a search or requisition on or after 1 April 2021, so that the notice under section 148 issued directly on the information deemed by Explanation 2 to that section; section 152(3) preserves that position for every search in the window. The corresponding provision in the Income-tax Act, 2025 is section 281.

What the provision does

Interposes a mandatory enquiry and hearing stage between the information suggesting escapement and the issue of a reassessment notice — in the 2021 text, in cases other than those originating in a search or requisition.

Threshold questions

Which text applies — the 2021 text for notices before 1 September 2024 and for every search, requisition or survey between 1 April 2021 and 31 August 2024 (section 152(3)); the current text otherwise
Under the 2021 text, is this a search case at all — if the reassessment originates in a search or requisition on or after 1 April 2021, section 148A does not apply and the challenge lies against the section 148 notice itself
Was a show-cause notice served, and did it disclose the information relied on
Was adequate time given to reply — not less than seven days under the 2021 text — and was the reply actually considered
Does the order deal with the objections, or merely recite them
Was approval of the specified authority obtained at the right stage and by the right authority — and under the right text of section 151
Is the notice within the limitation prescribed, including the monetary threshold for the extended period

The recurring disputes.

Non-disclosure of the underlying information

A show-cause notice that asserts information exists without disclosing what it is deprives the reply of any purpose. Requests for the underlying material should be made in writing at that stage, since the refusal is far easier to argue later when it appears on the file.

Orders that do not engage with the reply

An order under section 148A(3) — section 148A(d) in the 2021 text — which reproduces the notice and adds that the reply is not acceptable is challenged as showing no application of mind.

Sanction of the specified authority

Who granted approval, at what stage, and on what material, remains a fertile ground. Under the 2021 text the rank of the sanctioning authority depended on how many years had elapsed; under the current section 151 it is the Additional or Joint Commissioner or Director. Section 152(3) applies the earlier text to search-window cases.

Search cases wrongly routed through section 148A — or wrongly denied it

Where a search took place between 1 April 2021 and 31 August 2024, the Department sometimes issues a section 148A(b) notice anyway; where no search took place, it sometimes skips the stage claiming a search nexus that the record does not bear out. Which side of the proviso the case falls on is a question of fact about the search, the requisition, or the satisfaction recorded about seized material, and it decides whether the absence of a section 148A order is fatal or irrelevant.

Frequently asked.

Does section 148A apply where a search has taken place?

For a search initiated, or a requisition made, between 1 April 2021 and 31 August 2024, no. The proviso to section 148A as it then stood excluded such a case — in the assessee's own case or, with the approval of the Principal Commissioner or Commissioner, where seized assets belong to or seized material pertains to the assessee — and the Assessing Officer proceeded directly by notice under section 148, the search being deemed information under Explanation 2 to section 148, subject to sanction under section 151 and the section 149 time limits. Section 152(3) keeps that text applicable to every search in the window. A survey-origin case was not within the proviso: the information was deemed, but the section 148A procedure applied. For searches on or after 1 September 2024 the search years are assessed under the block scheme, and the current section 148A contains no search exclusion.

What is the procedure under section 148A?

Before issuing a reassessment notice under section 148, the Assessing Officer must serve a show-cause notice accompanied by the information suggesting that income has escaped assessment, give the assessee an opportunity to reply within the time specified, consider that reply, and pass an order — with the prior approval of the specified authority — determining whether it is a fit case for issue of a notice. Under the text in force to 31 August 2024 the reply period was seven to thirty days and the order was due within one month from the end of the month in which the reply was received.

Can an order under section 148A(3) be challenged?

Yes — as can an order under section 148A(d) of the 2021 text — ordinarily by writ petition, on grounds including that the information relied on was never disclosed, that the reply was not considered, that the order shows no application of mind, or that approval was not obtained from the authority competent to grant it.

Am I entitled to see the information relied on in a section 148A notice?

The notice is required to be accompanied by the information suggesting escapement, and a reply cannot meaningfully be made without it. Where it is not supplied, the request should be made in writing during the proceedings so that the refusal forms part of the record.