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Section 148 of Income Tax Act

Section 148 of Income Tax Act (Guide)

Many times we hear that a corporation or a person has got a notice from the income tax department to disclose about their investments done in any country or for a deal that happened 5 years back or so. 

It is because the Income Tax Department can not only assess your ITR for the current financial year but also reassess the previously filed ITR in cases of suspected irregularities in tax and expense shown. This is possible due to Section 148 of Income Tax Act.

What is the meaning of section 148?

An amendment was made in the Finance Act, 2012 through section 148, for the removal of any doubts incurred at the time of assessment by the assessment officer. The assessing officer can send a notice, demanding clarification for any discrepancies that occurred while the reassessment was done under section 147 of the Finance Act.

Under section 147, if the Assessing Officer while conducting the assessment has a reason to believe that any income chargeable to tax was not assessed properly or missed for any assessment year, he can assess or reassess such income or any other income chargeable to tax which was missed during the course of proceedings. The AO can recalculate the loss incurred for the concerned assessment year.   

An escaped income or wrongly assessed income under section 147 can be

1. Where no ITR was filed by the assessee for his total income or the total income of another person, for which he is assessable under this act during the previous year, and has exceeded the maximum amount which is exempted from tax.

2. Where ITR was filed but no assessment was made for the income. The AO notices that the assessee has shown less income or claimed more loss, deduction, allowance, or relief in his/her return.

3. Where the assessee does not furnish any report for any transaction involving foreign income.

4. Other reasons where an assessment has been made, but:

  • The taxable income was not assessed properly, or
  • The taxable income was taxed at low rates than defined, or
  • The taxable income was given more relief under this act, or
  • There is excessive loss or depreciation allowance or any other allowance under this act was calculated.

5. When a person is found to have any property outside India or holds a financial interest in any foreign entity.

Issuing Notice Under Section 148 A

An amendment was introduced under section 148 A which states that, before sending out a notice to the assessee, the AO must conduct suitable inquiries to cross check and correct any fault that might occur during the proceedings of assessment or reassessment for the income in question.

This can be done by setting up an inquiry and giving an opportunity to the assessee to explain and present any document if necessary, before issuing a notice.

Before sending out any notice, the assessee officer must get the approval of the authority on the notice and on a copy of such order, under section 148 of the Act. 

Although, in cases of search or requisition, the notice can be sent without any inquiry or giving an opportunity to the assessee for hearsay purposes.

What is the time limit for issuing notice under section 148?

The time limit for issuing notice under section 148 is carried out as per the provisions of section 149 of the Finance Act. They are as follows:

In most cases, no notice is sent to the assessee if it’s been more than 3 years than the concerned assessment year. 

In some cases, the notice can be sent where it’s been more than 3 years than the concerned assessment year. These cases can be:

1. If the AO finds evidence that suggests a missed asset of more than INR 50 Lakh, a notice can be issued even if the period is more than 3 years, but not beyond 10 years from the end of the concerned assessment year.

2. In cases of search and requisition, the assessment and reassessment is carried as per the provisions of section 153A, 153B, 153C and 153D of the Act, the above time limit is not applicable to them.

3. No notice can be issued under section 148 in a case where the concerned assessment year begins on or before 1st April 2021, if such notice was not issued at that time on account of being beyond the time frame described under clause b, because they occurred just before the new amendment proposed.

4. If there was any stay order passed by any court during the time allowed to the assessee in giving the opportunity of being heard or during the period before issuance of the notice, then the time limit for the AO to pass an order about the fitness of the case for the issue of notice under section 148 will be extended to 7 days.

Reopening Income Tax Assessment Cases

The Assessee Officer can reopen the income tax assessment cases in which the concerned assessment year is not more than 3 years.

Although, in the case of big tax evasion cases involving income of more than 50 Lakh the assessment can be reopened until 10 years.

How do I answer section 148 of Income Tax Act?

Section 148 of the Finance Act provides an opportunity to the assessee of being heard. The assessee can respond to the notice within a 7 to 30 days period of receiving the notice. 

Go through the notice carefully. If you have reason to believe that the claims made under the notice are false. Show the proof to the assessee officer. 

You can also ask the concerned assessee officer to send a copy of the recorded order. 

The assessee can challenge the notice in court for validation and even ask for a stay on such an assessment case.

But, if the assessee is satisfied with the reasons disclosed in the notice, you can file the income tax return and deposit the required tax for the escaped income in question.

What is self assessment under section 148?

SAT or self-assessment tax is the tax paid by the taxpayers on their requisite income, over the TDS and advance tax for the relevant financial year.

SAT is calculated at the end of a financial year and can be filed online through challan no 280.

How do I reply to notice us 148 online?

You can reply to any notice received from the income tax department through their online portal. Upload all the necessary information correctly and precisely.

  1. Go to www.incometax.gov.in or the e-filing portal then login to your account with your PAN card and password. 
  2. Head to the e-proceedings menu. 
  3. Here you can view and submit the response along with attachments by uploading the same on the e-Filing portal.

Also note, if your proceeding status is open, you can submit a response 7 days prior to the proceedings limitation date, until 6 pm.

FAQs: Section 148 of Income Tax Act

1. Can 148 notice be issued twice?

Yes, if the AO doesn’t receive any reply after sending out the first notice from the Assessee, the AO will issue another notice within 2 months with a response time of 30 days.

2. Who can issue notice under section 148?

The Assessing Officer can send a notice under section 148 if he finds any type of income missed/escaped from assessed, or wrongly assessed in an assessment year. 

3. What happens if I don’t respond to the notice within 30 days?

In case the assessee does not respond to the notice within 30 days of receiving it, he will be charged with a penalty of a late return filing fee. Also, he will receive another notice within two months again with a response time of 30 days.

4. Can return under section 148 be revised?

Yes, the Assessing officer can revise the ITR filed through the provisions of section 148 of the Finance Act.

5. What is the time limit for rectification?

The time limit to respond to notice received under section 148 of the Finance Act is 30 days from the day notice was received.


Section 148 of Income Tax Act allows the Assessee Officer to investigate any unassessed or escaped income during the assessment of the previously filed ITRs by the assessee. The reason for this is that most of the time the taxpayers try to hide their extra sources of income and investments from the IT department.

It’s shown in the ITR with less evaluation, loss or depreciation or allowances received or foreign incomes as gifts etc. This falls under tax evasion, as paying fewer taxes than required causes a loss of revenue to the government. However, the taxpayers get a fair chance to respond and clarify any claims made by the AO under the notice sent u/s 148. The reply can be sent online through the e-filing portal or in hand within 30 days of issuing such notice. 

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