A reassessment notice reopens an assessment year that has already been closed, on the ground that income has escaped assessment. Reassessment can lead to substantial additions, interest and penalty for years you thought were settled, so the response needs to be careful from the first step. The procedure was overhauled in 2021 and amended again from 1 September 2024.

How the process works

Reassessment now happens in two stages:

  1. Show cause notice under section 148A. Before issuing a reassessment notice, the Assessing Officer must give you an opportunity to be heard. The show cause notice sets out the information suggesting that income has escaped assessment, with the material relied on.
  2. Order and notice under section 148. After considering your reply, the Assessing Officer passes an order deciding whether it is a fit case for reassessment. If it is, a notice under section 148 is issued, with the prior approval of the specified authority.

The earlier procedure of asking for the "reasons recorded" and filing objections has been replaced by this pre-notice process. Your reply to the 148A show cause notice is therefore the main opportunity to stop the reassessment before it starts.

Time limits

For notices issued on or after 1 September 2024:

  • A notice under section 148 cannot generally be issued after three years and three months from the end of the relevant assessment year.
  • It can be issued up to five years and three months from the end of the assessment year only where the income that has escaped assessment amounts to ₹50 lakh or more, represented in the form of an asset, expenditure or entries in the books.

Search and survey cases follow separate rules. Limitation is one of the most important grounds of challenge, so check the dates first.

How to reply to the show cause notice

  • Ask for the material. If the information or documents relied on have not been supplied, request them in writing.
  • Check the information against your records. Many notices are based on AIS data — a property purchase, a cash deposit, a share transaction — that was already disclosed in the return or has an explanation.
  • Show that the income was offered or is not taxable. Point to the return, computation and documents.
  • Raise legal objections. Limitation, lack of jurisdiction, absence of approval of the correct authority, or a mere change of opinion on facts already examined in an earlier assessment.

A clear, documented reply with case law at this stage often results in the proceedings being dropped.

If a section 148 notice is issued

  • File the return within the time allowed in the notice. The return should be prepared carefully — it becomes the basis of the reassessment.
  • Respond to the assessment notices in the same way as a scrutiny assessment, issue by issue, with evidence.
  • Keep the legal grounds alive. Jurisdictional objections should be raised in the replies and, where appropriate, in appeal.

When to approach the High Court

Where the notice is clearly without jurisdiction — for example, it is time-barred or issued without the required approval — a writ petition before the High Court may be the right remedy, without waiting for the assessment to be completed. This decision depends on the facts and should be taken early.

Frequently asked questions

What is the time limit for a section 148 notice?

For notices issued on or after 1 September 2024, three years and three months from the end of the assessment year, extended to five years and three months where the escaped income is ₹50 lakh or more.

What is a section 148A notice?

A show cause notice issued before reopening an assessment, setting out the information suggesting that income has escaped assessment and giving you an opportunity to reply.

Do I have to file a return after receiving a section 148 notice?

Yes, within the time allowed in the notice. That return becomes the basis of the reassessment.

Can a reassessment notice be challenged in the High Court?

Yes. Where the notice is clearly without jurisdiction — for example, time-barred or issued without the required approval — a writ petition can be filed.

How we help

ASKN & Co. LLP prepares replies to section 148A show cause notices, represents taxpayers in reassessment proceedings and handles appeals, working with counsel where a writ petition is required. See our income tax notice reply and income tax appeals services.

Section references are to the Income-tax Act, 1961, which continues to apply to reassessment of tax years up to 2025-26. The Income-tax Act, 2025 contains corresponding provisions for later years.

This article is general information based on the law as at the date shown and is not professional advice. Please consult us before acting on it.