s.148A — Procedure before issuing a reassessment notice
The show-cause stage that must precede a notice under section 148, what has to happen in it, how the 2021 and the current texts differ, and which of them applies to a given notice.
Two texts, and the differences between them decide cases. The section was inserted by the Finance Act 2021 (Act No. 13 of 2021) with effect from 1 April 2021 as clauses (a) to (d) with a proviso, and substituted with effect from 1 September 2024 as sub-sections (1) to (4) with an Explanation. The 2021 text still governs two classes of case, under two different sub-sections of section 152: by section 152(3), every case originating in a search under section 132, a requisition under section 132A or a survey under section 133A other than one under section 133A(2A), between 1 April 2021 and 31 August 2024; and by section 152(4), any other case in which a notice under section 148 was issued, or an order under section 148A(d) was passed, before 1 September 2024. Under the 2021 text the proviso excluded search and requisition cases from the section altogether. The current text carries no such exclusion, because a search initiated on or after 1 September 2024 is assessed under Chapter XIV-B and not through sections 147 and 148 at all; its only carve-out is sub-section (4), for information received under the section 135A scheme. Sourcing: both texts were read on the Department's own pages, the current one on the Year 2025 edition, which is the latest traced. That page carries no footnote naming the amending Act or its date. The 1 September 2024 commencement is taken from section 152(3) and (4), both of which name the Finance (No. 2) Act 2024 in terms, and from the footnote on section 152(3), "Ins. by Act No. 15 of 2024, w.e.f. 1-9-2024".
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 give the assessee an opportunity of being heard by serving a show-cause notice, to take any reply into account, and to pass an order, with the prior approval of the specified authority under section 151, determining whether or not it is a fit case to issue a notice. In the current text those are sub-sections (1), (2) and (3); sub-section (1) also requires the notice to be accompanied by the information suggesting escapement, and sub-section (4) excludes a case where that information came through the scheme notified under section 135A. In the text in force from 1 April 2021 to 31 August 2024 the same steps were clauses (b), (c) and (d). Five things differ between the texts: the enquiry limb, the stages at which approval is needed, the reply period, the deadline for the order, and the proviso. Each is taken up in the questions below. Both texts require the order to be passed on the material on record and taking the reply into account, and orders that reproduce the show-cause and add that the reply is not acceptable are challenged, often successfully, as showing no application of mind. Under the 2021 text the proviso excluded a case originating in a search or requisition on or after 1 April 2021, so the section 148 notice issued directly, and from the Finance Act 2022 it also excluded a case where the information came through the section 135A scheme; section 152(3) preserves that position for the search window and section 152(4) for other cases already begun before 1 September 2024. The counterpart in the Income-tax Act, 2025 is section 281, which precedes the notice under section 280. It follows the current text closely, with the requirement that the show-cause be accompanied by the information moved into sub-section (2), and it likewise leaves the reply period to the notice without a floor or a ceiling. Its exclusions are wider: besides information received under the scheme notified under section 260, the section does not apply where the Assessing Officer has received directions of the Approving Panel under section 274(6), or a finding or direction contained in an order of any authority, Tribunal or court.
What the provision does
Interposes a mandatory show-cause and consideration stage between the information suggesting escapement and the issue of a reassessment notice, and fixes who must approve what before the notice goes out. Under the 2021 text it did not apply to a case originating in a search or requisition, which the proviso excluded; the current text carries no such exclusion, because a search on or after 1 September 2024 is assessed under Chapter XIV-B and not through sections 147 and 148 at all.
Threshold questions
- Which text applies, by section 152(3) for a case originating in a search, requisition or survey other than one under section 133A(2A) between 1 April 2021 and 31 August 2024, and by section 152(4) for any other case in which a section 148 notice was issued or a section 148A(d) order passed before 1 September 2024. A non-search case in which a clause (b) show-cause had issued before 1 September 2024 but no order and no notice followed by that date is within the words of neither, and the point appears to be open
- Is the notice within the limitation in section 149 as it applies to this case, the preserved text where section 152(3) or 152(4) carries it and the substituted text otherwise, and where the extended period is relied on, is the fifty lakh rupee threshold crossed on the footing the applicable text requires, possession of books, documents or evidence related to an asset, expenditure, transaction or entries under the current text and income represented in the form of an asset, expenditure or an entry under the preserved one. Limitation is jurisdictional and can end the file before the procedure is reached
- Who issued the notice and the order, and under what authority. Where they issued from the Jurisdictional Assessing Officer rather than through the scheme notified under section 151A, the objection is jurisdictional and has to be taken at the earliest and in terms
- 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 the section does not apply and the challenge lies against the section 148 notice itself
- Was a show-cause notice served, did it disclose the information relied on, and was the period allowed to reply workable on the facts. Not less than seven days under the 2021 text, extendable on an application; under the current text whatever the notice specifies, which sets no floor but does not displace the requirement in sub-section (1) to provide an opportunity of being heard
- 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. As the 2021 text stood at repeal it required approval for the clause (a) enquiry where one was conducted and for the clause (d) order, the Finance Act 2022 having removed it from the show-cause; the current text requires it only for the order
In practice
The recurring disputes.
Non-disclosure of the information, and the time to answer it
A show-cause notice that asserts information exists without disclosing what it is deprives the reply of any purpose, and the point has sharpened under the current text, which sets no minimum reply period at all, so a short period and an undisclosed record compound each other. The Revenue's answer is that sub-section (1) requires the notice to be accompanied by the information which suggests escapement, not by the whole investigation record, that the stage is a show-cause and not an assessment, and that Parliament removed the minimum period deliberately, so a short period is not of itself bad in law. The force of the point therefore depends on what was withheld and on what the reply could not address because of it. Ask for the material in writing, and ask for time in writing: both refusals are far easier to argue later when they appear 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. The Revenue's answer is that the provision requires the officer only to take the reply into account and to form a view on whether it is a fit case, not to decide the issue, so brevity is not of itself fatal and the merits remain open in the reassessment. The question on any given order is therefore which objection was passed over: an order silent on a limitation or jurisdictional objection stands differently from one silent on quantum.
Sanction of the specified authority
Who granted approval, at what stage and on what material remains a fertile ground, and the two texts ask different questions. As the 2021 text stood at repeal, approval was required for the clause (a) enquiry where one was conducted and for the clause (d) order, the Finance Act 2022 having removed it from the show-cause stage, and the rank of the authority depended on how many years had elapsed, so an approval by the wrong rank is no approval. Under the current text it is required once, for the order, and under the current section 151 the specified authority is the Additional Commissioner, the Additional Director, the Joint Commissioner or the Joint Director. The assessee's point is usually that approval was granted on a proforma, in bulk and without the material; the Revenue's answer is that section 151 requires satisfaction and not a speaking order, and that a court will not go behind a recorded approval without material showing it was not applied.
Who may issue the notice, and the section 151A scheme
Section 151A lets the Central Government notify a scheme for the issue of notice under section 148 and for the procedure under section 148A, on a team-based approach with the interface eliminated to the extent technologically feasible. A substantial body of High Court writ litigation turns on whether a notice issued by the Jurisdictional Assessing Officer, rather than through the notified scheme, is therefore without jurisdiction. The Revenue's answer is that the scheme allocates work between officers rather than removing the Assessing Officer's statutory jurisdiction. The decisions are not set out on this page and should be checked before the point is argued; what matters procedurally is that the objection is jurisdictional, so it is not cured by participation, and it belongs in the reply rather than first in the writ.
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.