Section 148 Reassessment Notice — Income Escaping Assessment
Section 148 notice is issued when the AO has reason to believe that income has escaped assessment. This initiates reassessment proceedings and requires you to file a return for the relevant assessment year.
What Does This Notice Mean?
The department believes you have undisclosed or under-reported income for a past year. After the 2021 amendments, Section 148A requires a preliminary inquiry before issuing 148. You have the right to respond to the Section 148A notice before the AO decides whether to issue 148.
Common Triggers
- Information from AIR/SFT showing unreported high-value transactions
- Undisclosed bank deposits or property transactions
- Information from investigation wing or surveys
- Mismatch between reported income and third-party data
- Tips or complaints about undisclosed income
- Non-filing of return despite taxable income
How to Respond
- 1Verify the notice has a valid DIN (Document Identification Number)
- 2Check if the Section 148A procedure was followed (post-2021 notices)
- 3Verify the notice is within the time limit under Section 149
- 4File the return as required — but file "under protest" to preserve your right to object
- 5File objections under the GKN Driveshafts procedure within 30 days of return filing
- 6Gather all evidence to explain the alleged escaped income
- 7Consider whether the reopening is valid on legal grounds (change of opinion, no new information)
Consequences of Non-Compliance
New Income Tax Act Mapping
New 148A process introduced
Frequently Asked Questions
What is a Section 148 notice?
A Section 148 notice is issued by the AO when there is reason to believe income has escaped assessment. It requires you to file a return for the relevant year so the AO can reassess your income.
How long does the AO have to issue a 148 notice?
Under Section 149, the AO can issue a 148 notice within 3 years from the end of the relevant assessment year (normal cases) or up to 10 years if escaped income is Rs 50 lakhs or more.
Can I challenge a Section 148 notice?
Yes. File the return under protest, then file objections under the GKN Driveshafts procedure. Common grounds include: no new tangible material, mere change of opinion, time-barred notice, or failure to follow 148A procedure.
Related Sections
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