The post-2021 reassessment regime fundamentally altered reopening proceedings by inserting Section 148A, mandating a prior enquiry, opportunity of hearing, consideration of reply, and a reasoned order before issuing a reassessment notice. The reform aimed to curb arbitrary reopenings, shifting focus from subjective “reason to believe” to procedural fairness. However, practical experience shows that these safeguards are often treated as ritualistic. Notices under Section 148A(b) are frequently accompanied by voluminous third-party material with minimal response time, no independent enquiry, and orders under Section 148A(d) that merely reproduce allegations without addressing objections. Statutorily, “consideration of reply” requires genuine application of mind and a speaking order. Judicial scrutiny, including by the Supreme Court of India and various High Courts such as the Bombay High Court, has emphasised that ignoring objections renders the process vulnerable. Jurisdiction to reopen now hinges on the quality of compliance with Section 148A, making procedural lapses a primary ground of challenge.
Brief Background
After the 2021 amendment, reassessment procedure changed completely. Section 148A introduced a mandatory pre-notice enquiry and opportunity of hearing before issuing notice under section 148.
The intention was clear. Reduce arbitrary reopening.
But in practice, the safeguard is often reduced to a formality.
Practical Difficulty Faced in Litigation
In one of my recent matters, the assessee received a notice under section 148A(b) along with annexures running into 150 pages. Time granted to respond was seven days.
The material relied upon was third-party data. No independent enquiry was conducted.
A detailed reply was filed pointing out factual errors. However, the order under section 148A(d) reproduced the notice and concluded that income had escaped assessment.
There was no discussion of objections raised.
The question arises — is this compliance or ritual?
Legal Position (Essential Extract)
Section 148A requires:
(a) Conduct of enquiry, if required, with prior approval
(b) Providing opportunity of being heard
(c) Consideration of reply
(d) Passing a speaking order deciding whether it is a fit case to issue notice
The phrase “consideration of reply” is not ornamental.
It requires application of mind.
Judicial Position
The Supreme Court of India in Union of India v. Ashish Agarwal treated old regime notices as show cause under section 148A(b), emphasizing procedural fairness.
High Courts, including the Bombay High Court, have examined whether 148A(d) orders reflect independent application of mind. Where objections are ignored or reproduced without reasoning, courts have interfered.
The emphasis is not on length of order. It is on reasoning.
If reply is not dealt with, the order becomes vulnerable.
My Professional Stand
Section 148A is not meant to be a checkbox exercise.
If the order under section 148A(d):
- Merely repeats allegations
- Does not deal with objections
- Ignores factual clarifications
- Shows no independent enquiry
Then the notice under section 148 deserves challenge.
Jurisdiction now hinges on procedural compliance.
Earlier, litigation centered on “reason to believe.”
Now, it often centers on “quality of 148A process.”
That shift is significant.
Practical Takeaways for CAs
1. Always request underlying material relied upon.
2. File structured reply, point-wise.
3. Specifically record factual errors.
4. Compare objections with findings in 148A(d) order.
5. If objections are ignored, challenge immediately.
Do not argue merits first.
Attack procedural non-compliance where it exists.
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