Notice Under Section 148 and 148A: Income Tax Reassessment Explained

Reassessment lets the department reopen a past year's assessment if it has information suggesting that income chargeable to tax escaped assessment. Typical examples: a property purchase or sale not explained by your returns, large cash deposits, unreported capital gains, or information from a search on someone else.

Since 1 September 2024 the process has two stages: a show-cause notice under section 148A, and then, only if your reply doesn't satisfy the officer, a notice under section 148. From 1 April 2026 the Income-tax Act, 2025 carries these provisions under new section numbers, but the steps are the same.

Check the dates first. A notice issued after these limits can be challenged on that ground alone.

1. Information and approval. The Assessing Officer receives information, for example from your AIS, a bank or another proceeding, and gets approval from the specified senior authority.
2. Show-cause notice under section 148A. You receive the notice together with the information relied on and are asked why the year shouldn't be reopened.
3. Your reply, within the time given: between 7 and 30 days. You can ask for more time with reasons.
4. Order. The officer considers your reply and passes a reasoned order. If satisfied, the matter ends there.
5. Notice under section 148, if the officer decides to proceed, asking you to file a return for that year.
6. Reassessment, a detailed assessment of the reopened year, which can end in additional tax, interest and penalty.

• High-value transactions in the AIS with no return filed, or a return showing much lower income: property purchases or sales, large cash deposits, big mutual fund or share purchases.
• TDS deducted but no return filed, which shows the department you had taxable receipts.
• Capital gains not reported, especially on property sales, where the buyer's TDS statement names you as the seller.
• Information from another proceeding, such as a search or survey on a business you dealt with.
• Foreign assets or income reported to India under information-exchange agreements but missing from your return.

• Read the information supplied. It tells you exactly what the department thinks escaped. Often it is a single transaction from your AIS.
• Check the time limit and the approval. Note any procedural defect in your reply.
• Explain the transaction with documents. Show that it was already taxed, wasn't income (a loan, a gift from a relative, the sale of a capital asset already reported), or belongs to someone else.
• Quantify. If the escaped amount is below ₹50 lakh and the year is more than three years old, say so: the extended limit doesn't apply.
• Reply on the portal under e-Proceedings, before the deadline, and keep the acknowledgement. A section 148A reply is also the place to point out if the income was already shown in your ITR for that year.

The reply at the 148A stage is your best chance to stop the reopening. Once a section 148 notice is issued, the year is reassessed in full.

1. File the return for that year within the time stated in the notice, even if you filed one originally. Include everything you now know to be correct.
2. Ask for the reasons and the order passed at the 148A stage if you don't already have them.
3. Respond to every question in the reassessment with documents, and keep copies of everything submitted.

Reassessment involves several years' records and deadlines that can't be missed. TaxQue's income tax notice resolution team handles the 148A reply and the reassessment that follows. For property-related reopenings, see our guide to the income tax notice after buying property. For other notices, see our notice guide.