• Apr
  • 25
  • 2012

Assessment or Reassessment Notice U/s 148

Notice for assessment or reassessment U/S 148 of the Income Tax Act, 1961

The power of assessment or reassessment of any income chargeable to tax that have escaped assessment has been provided under section 147 r w s 148 of Income Tax Act of 1961. If the assessing officer has the reason to believe that any income chargeable to tax has escaped assessment then the assessing officer may subject to the provisions of section 147 to 153 assess or reassess such income.

What is reason to believe: Before issuing any notice U/S 148 the assessing officer must have reason to believe that any income chargeable to tax has escaped assessment. Reason to believe can not be a reason to suspect merely. There must be a direct nexus between the material coming to the notice of the assessing officer and the formation of the belief that there has been escapement of income of the assessee from assessment in a particular year. The material for formation of belief must be relevant and not vague. The assessing officer must record reasons in writing before issuing notice u/s 148. Mere a reason recorded that “there is a huge concealment of income’ or ‘For further investigation’ without any specific instance of entries or material relevant to the assessee will not constitute a valid reason as it is vague and general in nature.

To constitute a valid reason to believe there must be some new material coming into light with the assessing officer, merely a change of opinion cannot constitute a reason to believe. If the assessee has disclosed basic and all the true facts during the course of assessment and the assessment is completed. Later on notice u/s 148 can not be issued merely because there is another inference possible from the same documents and the facts placed before the assessing officer during the course of assessment as it will amount to change of opinion. There must be some new material coming into light for action u/s 147/148. But if the assessee has suppressed some relevant facts which leads to concealment of income and later those facts come before the assessing officer the notice u/s 147/48 can be issued validly.

Who can issue notice U/s 148: Section 151(1) provides that in a case where an assessment under sub-section (3) of section 143 or 147 has been made for the relevant assessment year, no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice] :

Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.

In a case other than a case falling under sub-section (1) of section 151, no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.

Time Limit for Issuing of notice u/s 148: Section 149 provides that notice u/s 148 can be issued within 4 years from the end of relevant assessment year if the income escaped does not exceed one lac Rs. If the income escaped is Rs. one lac or more the notice u/s 148 can be issued within 6 years from the end of relevant assessment year subject to the provisions of section 151.

Further first proviso to section 147 provides that if the assessment has been completed u/s 143(3) no action can be taken u/s 147 after the expiry of 4 years from the end of relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.

What to do when notice u/s 148 is received: when a notice u/s 148 is received the assessee is asked to file a return of the relevant assessment year. After filling the return the assessee should ask for the copy of reasons recorded for issue of notice u/s 148 and can file objection to the issuance of notice. The assessee should ask specifically assessing officer to pass a speaking order by disposing off the objections giving reference of the Judgment of Honorable Supreme Court in GKN Driveshafts (India) Ltd vs ITO (2003) 259 ITR 19 (SC). The objections should be filled giving reasons for challenging the legality of the notice u/s 148. All this procedure has been laid down by the Honorable Supreme court in GKN Driveshafts (India) Ltd case. This procedure has been provided by the Honorable Supreme court to enable the assessee to file writ petition before the respective High court challenging the legality of the notice u/s 148 before the assessment is completed.

Evan if the assessment order has been passed and the matter is in appeal the assessee can still file writ petition in the high court challenging the legality of notice u/s 148 and the consequent assessment if the above said procedure as laid down by the Supreme court in GKN Driveshafts (India) Ltd case is not followed. But for that assessee off course will have to show that he asked for the copy of reasons for issue of notice u/s 148 and filled objections to that and asked the assessing officer to pass a separate reasoned order disposing off the objections filled and deciding on the legality of the notice issued u/s148.

Author: Amit Bajaj, Advocate

Email: amitbajajadvocate@hotmail.com

Cell No. : 9815243335


21 Responses to “Assessment or Reassessment Notice U/s 148”

  1. Sanjeev says:

    Sir, I have filed ITR but amount details not filled, can it be revised?? Please guide, if yes then How? and what is other option to rectify the problem?

  2. Vinay Awasthi says:

    My client has received the notice u/s.148 which is connection with the a.y. 2007-8, is it within the time or time barred. please suggest me what further action can be taken

  3. Sachin says:

    Hi Amit,
    I have received notice under section 148 for the income chargeable to tax for the assessment year 2009-2010/10-11/11-12/12-13 has escaped assessment within the meaning of section 147 of the income tax act ,

    I can’t under stand this notice clearly, can you please guide me whats needs to be done now, i am kind of stuck and dont have any clue as what this is all about.

    i have sent all 4 notice attachments to your email id.

    Above that i am currently posted outside of India, so not sure what action i will be able to take now.

    Awaiting your reply.

    Thanking you

    Yours Sincerely
    Sachin

  4. Ganesh says:

    Sir,
    I am employee for Pratiksha Industries Pune as accountant sir, we have received Income tax notice under section 148 for the income chargeable to tax for the assessment year 2009-2010 has escaped assessment within the meaning of section 147 of the income tax act ,

    sir,i can’t under stand for this notice please guide me properly wht’s the process,what can i do this is very urgent so waiting your reply ,,,,
    9552634042

  5. HARDEV SINGH says:

    Respected Sir

    I have sale my ancestral house of Rs. 1340000/-. I deposited Rs. 999000/-, 49900/- and 100000/- in my saving account. Income tax department issued notice in my name Sub:- Non filing of Income Tax Return. 2010-11, 2011-12, but my income is Rs. (NIL) 0/- then issued the notice of Sec- 142(1) for the AY. 2010-11, 2011-12 & 2012-13. I have not given reply against Notice u/s 142(1)to ITD. Then I have received notice U/s Sec. 148. Kindly I request to You please guid me satisfy the ITD.

    Thanks

    Hardev Singh

  6. JAYESH SHAH says:

    My client were served Notice u/s 148 in April-2012. Before asseement proceedings stars, asseesse expired on Aug-2013. what coluld be corsre of action ? Can action u/s 148 be dropeed ?

  7. Nirav says:

    Notice us 148 is issued with some others PAN no and address but name is mine. I don’t know how delivery boy came to my address and my wife accepted that notice. what should I do now please advice. my mail id is niravndoshi@hotmail.com

  8. sunil bhansali says:

    can 148 be issued twice for the same AY

  9. Rashmi says:

    can assessment under section 147 be continued for reasons other than reasons recorded in writing??

  10. Rashmi says:

    can an assessment under section147 be droped?

  11. sneha says:

    can an assessement of section 147 be dropped??

  12. amar agarwal says:

    yes boss, AO has right to re-open and assessement may be done.

  13. amar agarwal says:

    Assessee has to challenge aganist 148 directly high court or CIR/DRP also and only after concluded by AO which seems not favarable to assessee.

  14. dr.g.balakrishnan says:

    vague assumptions based Notice u/s 148 surfaces, you as the officer to pass a speaking order that you can take as an exhibit when you file writ before HC, for necessary appreciation of guidelines refer GKN Driveshaft (India) Ltd v ITO (2003)289 ITR 19(SC), that will be a helpful guidance as you find in this artice.

  15. dr.g.balakrishnan says:

    any vague assumptions of AO u/s 148 is a defective notice and as per SC one need to file writ against such vague notices,as such notices invariably not necessarily based on exact facts then it can be contended if not relevant superior authority not granted necessary permission, if no such superior officer permission is not there then necessarily it is on some vague conjectures. if one finds some vague charges are in that notice then he can certainly move HC under awrit

  16. mohanish shaw says:

    i have just opened a new company which is just started on october 2012 , but i have recieved a letter from income tax department as per asking me too furnish report as to why i should not be charged with section u/s 142(1) and 148.

    what should i do ?

  17. Surrender says:

    143(3) order dated 15.12.2009 for A Y 2007-08, having been modified partially by CIT(A) on 22.09.2011 and then, finally by ITAT, on 02.08.2012, deleting entire (disputed) disallowed part of depreciation, car expenses and telephone expenses, ITO has since issued notice u/s 148 on 29.08.2012, stating it to be “after obtaining the necessary satisfaction of the CIT”, but without disclosing any of “reasons to believe”; It may simply be ‘change of opinion on some assessed income or allowance which may not be covered under 148, as per expert Advocate Mr. Amit Bajaj, author of the above well-reasoned article;
    What could be the course of action and / response of the Individual Assessee to such notice u/s 148, that too, after over 4 and a half years of end of Asstt. Year 2007-08 ??
    Proceedings under section 154/155, barred by limitation, were objected to on 29.03.2012 and have still not been finalised, before issue/service of such notice u/s 148 !

  18. santosh says:

    sir after we get 148 notice and if we dont respond for the same then whta is the next step taken by assesing officer,my mail id sms543696@gmail.com , i have an order passed in my favour on jan 10th 2012,but the assesing officer before giving affect to the same has issued me 148 notice

  19. VARUN says:

    Can an assessment be re opened twice u/s 148 for the same Assessment year . Please help

  20. ASHIT says:

    what to do when notice u/s. 142 is issued for A. Y. 2006-07 stating that to file ROI for that year…??? But assessee has already filed the same at that time…!!! now, we dont want to file new ROI and request AO to consider the same filed in previous year…. can AO make reassessment for that year ?? can we have to be ready to receive the notice u/s.148 for reassessment..?? what to do….????

  21. arun kumar agrawal says:

    if a contractor case has been assessed on % of total turnover under 143(3) than case can be reopen u/s 148 on the basis of cash credit in bank a/c

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