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.

Read Other Articles from Advocate Amit Bajaj

(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amit@amitbajajadvocate.com, M +919815243335)

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68 responses to “Assessment or Reassessment Notice U/s 148”

  1. sai says:

    sir
    My friend sai work from CA
    He did some mistake Dat is he Forget file Return of one salary person asking he scared file return after due date he filed Income Return by Using U/s 148 notice fake date and notice
    As the return has been filed u/s.148, in response to the notice issued by the Jurisdictional Assessing Officer. he this Notice what he need do Now he was Confused …
    pls Give any Solution’s to him for this notice

  2. H R KAMBIYAVARU B.COM LL.B.(SPL) says:

    DEAR SIR
    IT IS REALLY AMAZING
    AND VERY EDUCATIVE & ENLIGHTEN

    AND FURTHER UPGRADE THE MY KNOWLEDGE
    SIR IT IS REALLY GOOD DEVELOPMENT& CREATIVE SIR REALLY HATS UP YOUR WISDOM SIR THANKING YOU YOURS SINCERELY.

  3. subodh says:

    I have received a notice under section 148 for a property transaction which I never did. What is the best way to respond?

  4. Punit Patel says:

    Received Notice Us 148 Dated 29.03.2018 For Ay 2011-12. it is valid??

  5. Kurella sreenivasulu says:

    Hi I received the notice u/s 148 as follows
    For 2011_12,year. How to proceed please help me

  6. Hira lal says:

    Received us 148 notice for the assessment yr 2011_12 on 117 March. Is it valid

  7. Rupak singh says:

    I received notice under section 148 and was received on 4th April 2017 for AY2010-2011 the notice was dispatched by office on 1st april2017 is it lawful

  8. BHASKAR says:

    PLEASE LET ME KNOW CAN I FILE ITR FOR THE ASSESSMENT YEARS 2014-15,2015-16, AND 2016-17 WHICH COMES UNDER TAX AUDIT, IF SO WHAT IS THE PROCEDURE
    REGARDS
    BHASKAR R

  9. Sunny Arora says:

    We have received a section 148 notice for the assessment year 2010-1011. We have not filled any return for the said year. Now, this Pvt Ltd company is closed and we don’t have any documents/ expenditure details. Pls guide.

  10. mahesh chand khandelwal says:

    i received one notice u/s 148 of i.t.act. for A.Y. 2010-11 ON DATED 01/04/2017 . can i request to drop the proceeding u/s 148 for reassessment.

    • Punit says:

      Yes any one receiving notice after 6 assessment years u/s 148 read with section 147 can ask for drop of assessment as time barred.

      • ASHISH says:

        AS PER QUERY NOTICE IS RECEIVED ON 01/04 SO IT MEANS IT WAS ISSUED BEFORE APPEAL. AS PER SECTION 148 OF THE I.T. ACT, 1961 NOTICE U/S. 148 SHOULD BE ISSUED BEFORE 4 YEAR. SINCE THE NOTICE IS ISSUED IN MARCH SO THE NOTICE IS GOOD IN LAW.

    • L N Kapoor says:

      If first notice u/s 148 is undelivered and second notice is received after time limitation then whether notice will be valid

  11. SATISHBHAI PATEL says:

    very good and give guidance for filing objection and asking for speaking order

  12. Khemchand.Boolchandani says:

    I have Received a notice under section n 148 for A.Y 2010/11,I have not received any reasons,But I have not filled return for financial year 2009/10 A.Y2010/11due to my Income was not taxable,Now pl Now pl.Let me know what to do

  13. Rashmi says:

    Dear sir,

    As at 26 December 2016, how many previous assessments can be opened by the assessing officer? We have filed returns up to 31 March 2010 (AY 10-11), which is the year in which i retired.

  14. Rajesh patel says:

    Sir, can a assessing officer issue notice u/s 148 for AY 2009-10 (FY 2008-2009)before 31/03/2016.pls send reply immediately.

  15. Poulami says:

    I received a notice u/s 148 but did not reply till a show cause notice u/s 144 was sent to us. after we received the show cause notice we have filled a revised return for that period. Now the IT department has issued notice u/s 142(1) of income tax. What to do next? please advice. mail id poulami.poly@gmail.com

  16. A Chaudhuri says:

    On receipt of notice u/s 148, Assessee re-computes tax and finds a claim for refund can be raised in the Return to be filed in response to the notice u/s 148. What is to be done, then?

  17. OFFICE HRD says:

    Sir

    I have filled my return on March 2014 for the Assessment year 2013-14. and after that I have file a letter to I T Department for decalared the other income not shown in said return. I have not paid the I Tax till date and the department have issued one notice u/s 148 and they insist to re assessment and hold my bank accounts. What are the process when the assesse admit the tax and I will not able to revised return for the said period. Kindly advice me.

  18. Sourav banerjee says:

    Sir

  19. Dhanasekaran says:

    Correct for the above assessment years provided approval from the CIT is necessary for AY 2009-10 &2010-11

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