1. Notice for assessment or reassessment under section 148 of 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.

Assessment or Reassessment Notice Us 148

2. What is reason to believe for issue of notice under section 148

Before issuing any notice under section 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 under section 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.

3. Who can issue notice under Section 148:

Section 151(1) provides for sanction of issue of notice:

(i) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice.

(ii) In a case other than a case falling under part (i), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint 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.

(iii) For the purposes of part (i) and (ii) ,, the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.

4. Time Limit for Issuing of notice under section 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.The notice u/s 148 can be issued within 16 years from the end of the relevant assessment year if the income which has escaped assessment is related to assets( including financial interest in entity) is located outside India.

Further first proviso to section 147 provides that if the assessment has been completed u/s 143(3) or u/s 147 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.

Second proviso to section 147 states that nothing mentioned in first proviso shall apply in a case where the income which has escaped assessment is related to assets ( including financial interest in entity) is located outside India.Time Limits for Issuance of Notices, Orders under Different Sections of Income Tax Act, 1961

5. 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.

Even 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/s. 148.

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

Read Other Articles from Advocate Amit Bajaj

(Republished With Amendments)

More Under Income Tax

75 Comments

  1. Santosh says:

    Dear Sir,
    Please assist me when I got notice u/s 148,
    i am filling ITR 2 form in that i have to select original or revise return.

  2. MAHESH KASHYAP says:

    SIR MERA ITR 2014-2015 KA HAI JIS ME MERE EMPLOYER NE MERI SALARY KA TDS KATA THA USKE AGAINST AB ME ITR BHAR RAHA HU TO ITR FILL NHI HO RAHA HAI.
    PLZ SOLUTION

  3. 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

  4. 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.

  5. 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

  6. 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

  7. 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.

  8. 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.

    1. 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.

      1. 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.

  9. 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

  10. 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.

  11. 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

  12. 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?

  13. 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.

  14. D.D.Gupta says:

    I had sold my commercial property on 03.01.2009 and purchased fdr from nationalised Bank under capital gain for the capital gain amount. I had not purchased any residential property in the prescribed period of 2-3 years. Information has been sought by the department under section 133(6) and the same has been replied. Now what further action can be taken by the department & whether notice under section 148 can be issued to me for the relevant period. Reply please.

  15. PRADEEP KUMAR says:

    Respected Sir
    I have received a notice U/S 148 for the years 2009-10,2010-11,2011-12,2012-13. The notice issued by the income tax officer to a wrong address, but the assessee’s name was correct. The letter addressed to a wrong address and it has been redirected after a long time and accepted by the assessee’s wife.
    Can we defend the ‘service of notice served not to the correct address of the asssessee?’

  16. Bhatt says:

    Sir I have not file my ITR FOR THE ASSESMENT YEAR 2013-14, IS IT POSSIBLE THAT I WILL FILE MY RETURN IN THIS AY FOR THE AY 13-14. IF YES HOW & IN WHICH SECTION

  17. PAWAN KUMAR says:

    sir. can a assessing officer issue notice u/s 148 for the A Y 2008-09(FY 2007-08) After 31/03/2015 if yes then what is time barring of the case please send reply immediately : Regard PAWAN KUMAR

    1. Ca Rajeev Kumar Inani says:

      NOTICE U/S CAN NOT BE ISSUED AFTER 31/03/2015 FOR F.Y.: 2007-08, BUT IF IT IS ISSUED BEFORE 31/03/2015 & DISPATCHED THROUGH REGISTERED / SPEED POST ON OR BEFORE 31/03/2015 BUT SERVED AFTER 31/03/2015, IT WILL BE CONSIDERED AS VALID.

  18. Dhiren says:

    Notice for re-opening u/s 148 issued for two assessment year 2010-11 & 2011-12 in March, 2014.
    Fresh notice for assessment received in 2014-15 came, a reply stating return filed u/s 139 be treated as return filed in response to notice u/s 148 and we requested the AO to provide reasons for re-opening.
    AO did not give any reasons and 31.03.2015 passed away. AO did not pass order till 31.03.2015 under any section.
    Now AO Has issued notice again in July 2015 for same two assessment year giving reasons along with notice and has asked to make submissions

    My question is not the assessment time barred as notice for re-opening was issued in March 2014.
    Secondly can he re-issue the notice to re-open the assessment for the same assessment year again since he did not complete the assessment and that still there is a time frame to re-open the assessment as per the provisions of section 147.

  19. Pushkar Apte says:

    Whether reason to believe includes notes provided by audit party on the basis of which assessing officer issued notice u/s. 148?
    Please help

  20. raji says:

    i have received sec 148 notice for a.y:2008-09, sale of aggre land, amt more 5 lakhs, market value 10 lakhs, which section i rectified this notice…?

  21. DEEPAK MITTAL says:

    Respected Sir,

    We have done some transaction of between rs 15000 to 25000 depositing and withdrawal for a year 2010-11. This amount is approx Rs 10 lac of depositing and withdrawal. But there is not negative cash during this transaction and maximum balance in account is rs 35000.00. For this we have received Income tax notice 148. Please Give the solution to withdraw this problem

  22. Sandip Patil says:

    sir. can a assessing officer issue notice filing of return of income A.Y.- 2010-11 9-10 (FY 2009-10) before 04/05/2015 if yes then what is time barring of the case please send reply immediately : Regard Sandip Patil

    1. vivek says:

      Dear sir ,I have received an notice under section 148 for financial year 2009-10.
      The bulider from whom we purchased flat in 2009-10 was raided in 2013 and he had put in his computer that i paid him cash .for this my books are being opened.
      Please guide.

  23. GOPAL RAI says:

    sir. can a assessing officer issue notice u/s 148 for the A Y 2009-10 (FY 2008-09) before 31/03/2015 if yes then what is time barring of the case please send reply immediately : Regard Gopal Rai

  24. 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?

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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 ?

  30. 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.

  31. 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.

  32. 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

  33. 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 ?

  34. 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 !

  35. 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

  36. 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….????

  37. 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

Leave a Comment

Your email address will not be published. Required fields are marked *