Home / Money / Personal Finance /  What is section 148A of the I-T Act?

As per the Income-tax (I-T) Act, an assessing officer of the tax department has the authority to assess, reassess or re-compute the total income of an individual, if there is ample reason for the officer to believe that income chargeable to tax has escaped assessment for any of the previous assessment years.

Thereafter, a notice is issued by the department to the individual under section 148A of the Act.

The notice contains information that income chargeable to tax has escaped assessment.

The assessment officer will also have to provide information supporting his or her claim.

Before issuing the show cause notice, an assessing officer has to conduct an enquiry with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment.

Under section 148A, the assessee gets an opportunity to be heard by the officer.

An assessing officer has to give not less than seven days but not more than 30 days to the assessee for furnishing his explanation. After considering the reply, the assessing officer decides whether it is a fit case for the issue of notice.

As per the time limitation clause, in normal cases, a notice cannot be issued if three years have elapsed from the end of the relevant assessment year.

However, notice beyond the period of three years can be taken up only in a few specific cases. Further, in specific cases where there is evidence of any taxable income of at least 50 lakh has evaded assessment, notice can be issued beyond the period of three years but not beyond the period of 10 years from the end of the relevant assessment year.

For taxpayers, Section 148A offers much-needed relief, as tax cases were earlier reopened without the assessee being informed. Experts suggest that taxpayers must exercise due diligence and examine their tax records carefully before responding to the notice. They must also not try to evade the notice.


Abhinav Kaul

Abhinav Kaul writes on cryptocurrencies and mutual funds at Mint. His previous stints include ETMarkets, Reuters Bangalore and Press Trust of India.
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