Section 148A — Procedure before Issuance of Notice under Section 148
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live; inserted by the Finance Act, 2021 (w.e.f. 1 April 2021) and substituted by the Finance Act, 2024 (w.e.f. 1 September 2024). Mandates a pre-issue procedure: where the AO has information suggesting escapement, he must provide the assessee an opportunity (show-cause), consider the reply, and — with the approval of the specified authority — decide whether it is a fit case to issue a section 148 notice.
FA 2026: No fresh amendment by the Finance Act, 2026; the FA 2024 restructuring (dispensing with the earlier separate 148A(a) inquiry and recasting the steps) governs.
A. SECTION COMMENTARY
Section 148A is the assessee's pre-reassessment shield. In its present (Finance Act, 2024) form it requires the AO, before issuing a section 148 notice, to provide the assessee with an opportunity of being heard by serving a show-cause notice (accompanied by the information that suggests escapement), to consider the assessee's reply, and then — with the prior approval of the specified authority — to pass an order determining whether it is a fit case for issuing a section 148 notice. The earlier (Finance Act, 2021) version contained a distinct preliminary inquiry stage (clause (a)) and a separate reasoned order (clause (d)); the Finance Act, 2024 streamlined these. Certain cases (notably search/requisition/survey-linked information) are carved out of, or subjected to a modified, 148A procedure.
The provision was the structural innovation of the 2021 regime — converting reassessment from a unilateral 'reason to believe' exercise into an adversarial, information-disclosed, pre-decisional process. Its first and largest application was the Ashish Agarwal fiction, which deemed the old notices to be 148A(b) show-cause notices. Writ courts have repeatedly emphasised that the information must be supplied and a genuine opportunity given; but they have also cautioned that the section 148A(d) order (a threshold 'fit case' decision) is not to be tested as if it were the final assessment — the merits are for the reassessment, and writ interference at the 148A stage is limited.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025), as substituted by the Finance Act, 2024 (w.e.f. 1 September 2024).
148A. (1) Where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment in the case of an assessee for the relevant assessment year, he shall, before issuing any notice under section 148 provide an opportunity of being heard to such assessee by serving upon him a notice to show cause as to why a notice under section 148 should not be issued in his case and such notice to show cause shall be accompanied by the information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year.
(2) On receipt of the notice under sub-section (1), the assessee may furnish his reply within such period, as may be specified in the notice.
(3) The Assessing Officer shall, on the basis of material available on record and taking into account the reply of the assessee furnished under sub-section (2), if any, pass an order with the prior approval of the specified authority determining whether or not it is a fit case to issue notice under section 148.
(4) The provisions of this section shall not apply to income chargeable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A.
Explanation.—For the purposes of this section and section 148, "specified authority" means the specified authority referred to in section 151.
C. AUTHORITIES
The authorities concern the genesis of the provision and the limited scope of interference at the pre-issue stage.
1. Genesis and operation
Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC) — cross-reference
Relevance: The deemed-notice fiction operated through section 148A(b): the old-regime section 148 notices were treated as 148A(b) show-cause notices, the AO being directed to supply the information/material and to follow the rest of the 148A procedure. The decisive authority on the practical first deployment of section 148A. (See section 148.)
Procedure and approval — principle
Position: The AO must (i) confront the assessee with the information suggesting escapement, (ii) give a real opportunity to reply, (iii) consider the reply, and (iv) obtain the specified-authority approval (section 151) before passing the order and issuing the section 148 notice. Failure to supply the information, or a mechanical/ non-speaking treatment of the reply, vitiates the foundation of the reassessment.
Candour note: A large body of High Court authority applies these requirements case by case; they are summarised as the settled working rule.
2. Limited scope of writ interference at the 148A stage
Red Chilli International Sales v. ITO (2023) — Supreme Court (order)
Court: Supreme Court of India (order in SLP, 2023).
Held: The Court indicated that the scope of interference, at the stage of an order under section 148A(d) and the consequent section 148 notice, is limited; ordinarily the assessee should pursue the statutory remedies in the reassessment, and writ jurisdiction is not to be exercised as a matter of course to scrutinise the merits at the threshold stage (subject to want of jurisdiction or breach of natural justice).
Significance: Authority restraining premature merits-challenges to the 148A(d) order; the 'fit case' determination is a threshold filter, not the final adjudication.
3. Threshold scrutiny and the first-proviso bar
Ganesh Dass Khanna v. ITO (2023) (Delhi High Court)
Court: Delhi High Court.
Held: Applying the post-2021 scheme and the first proviso to section 149, the Court held that reassessment for older assessment years that had become time-barred under the pre-2021 law as on 1 April 2021 cannot be reopened; the section 148A order and the section 148 notice must respect the surviving limitation, and the monetary threshold for the extended period must be satisfied with reference to income 'represented in the form of an asset'.
Significance: Representative High Court authority applying the first-proviso protection and the threshold discipline to the section 148A stage; read with Rajeev Bansal. (Practitioners should confirm the precise reported citation for the year/forum relied on.)
4. Recorded reasons cannot be supplemented; threshold-stage interference
Held: A statutory authority's order must be judged by the reasons it records; those reasons cannot be supplemented by fresh reasons through an affidavit or otherwise. An order bad at inception does not become valid by later justification.
Relevance: Applied to section 148A: the information supplied and the reasoning in the 148A order define the basis of the reopening and cannot be improved later; the assessee must be confronted with the actual material relied on.
Anshul Jain v. PCIT (2022) (Delhi High Court) — SLP dismissed by the Supreme Court
Held: Where the section 148A(d) order and the consequent section 148 notice are otherwise within jurisdiction, the assessee should ordinarily pursue the statutory remedies in the reassessment rather than challenge the threshold order by writ; the High Court declined to interfere and the Supreme Court dismissed the SLP.
Significance: Reinforces (with Red Chilli) that the 148A(d) 'fit case' determination is a threshold filter, not to be litigated on the merits by writ as a matter of course. (Confirm the precise reported citation before independent reliance.)
5. The transitional litigation at the High Court level
Mon Mohan Kohli v. ACIT (2021) 441 ITR 207 (Delhi)
Court: Delhi High Court; judgment dated 30 October 2021.
Held: Reassessment notices issued under the old section 148 after 31 March 2021 (relying on TOLA notifications) were without authority of law, because, from 1 April 2021, reassessment could be initiated only under the substituted regime — including the section 148A pre-issue procedure; the Court quashed over 1,300 such notices. (This High Court view was the backdrop to the Supreme Court's salvage of the notices in Ashish Agarwal.)
Significance: A leading High Court decision on the centrality of the section 148A procedure in the new regime, and on the invalidity of old-regime notices issued after the cut-off; read with Ashish Agarwal and Rajeev Bansal.
6. 'Information', sharing of material, and the manner/date of the notice
Divya Capital One (P) Ltd. v. ACIT (2022) 445 ITR 436 (Delhi)
Court: Delhi High Court; judgment dated 12 May 2022.
Held: The expression 'information which suggests that income has escaped assessment' cannot be resorted to lightly; it does not give the Revenue unbridled power to reopen. Section 148A(c) casts a duty (the word 'shall') on the AO to consider the assessee's reply before passing the 148A(d) order, and the material/information relied on in the 148A(b) notice must be shared with the assessee; not doing so denies an effective opportunity and vitiates the order.
Significance: A leading post-2021 ruling on the quality of 'information' and the mandatory consideration of the reply and sharing of material at the 148A stage.
Suman Jeet Agarwal v. ITO (2022) 449 ITR 517 (Delhi)
Court: Delhi High Court.
Held: Explaining when a notice is 'issued' for limitation purposes in the digital environment, the Court held that a notice is 'issued' only when it leaves the control of the sender (e.g. is dispatched/emailed), and analysed the different modes of generation/despatch on the portal; mere digital signing or generation without despatch within the limitation period does not make the notice validly 'issued' in time.
Significance: Important on the manner and date of issue of the section 148/148A notice — directly relevant to limitation under section 149 in the faceless/e-issuance context.
Touchstone Holdings (P) Ltd. v. ITO (2022) 451 ITR 196 (Delhi)
Court: Delhi High Court.
Held: On a challenge to the 148A(d) order and consequent notice, the Court upheld the reassessment as within the time surviving under the Income-tax Act read with TOLA, and declined to interfere at the threshold; it took a view (on the first-proviso/TOLA computation) from which the Gujarat High Court in Keenara Industries later dissented — a divergence ultimately addressed by the Supreme Court in Rajeev Bansal.
Significance: Illustrates the threshold-stage approach and the inter-High-Court divergence on the surviving-time computation; read with Keenara Industries and Rajeev Bansal.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 148A — Procedure before Issuance of Notice under Section 148
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live; inserted by the Finance Act, 2021 (w.e.f. 1 April 2021) and substituted by the Finance Act, 2024 (w.e.f. 1 September 2024). Mandates a pre-issue procedure: where the AO has information suggesting escapement, he must provide the assessee an opportunity (show-cause), consider the reply, and — with the approval of the specified authority — decide whether it is a fit case to issue a section 148 notice.
FA 2026: No fresh amendment by the Finance Act, 2026; the FA 2024 restructuring (dispensing with the earlier separate 148A(a) inquiry and recasting the steps) governs.
A. SECTION COMMENTARY
Section 148A is the assessee's pre-reassessment shield. In its present (Finance Act, 2024) form it requires the AO, before issuing a section 148 notice, to provide the assessee with an opportunity of being heard by serving a show-cause notice (accompanied by the information that suggests escapement), to consider the assessee's reply, and then — with the prior approval of the specified authority — to pass an order determining whether it is a fit case for issuing a section 148 notice. The earlier (Finance Act, 2021) version contained a distinct preliminary inquiry stage (clause (a)) and a separate reasoned order (clause (d)); the Finance Act, 2024 streamlined these. Certain cases (notably search/requisition/survey-linked information) are carved out of, or subjected to a modified, 148A procedure.
The provision was the structural innovation of the 2021 regime — converting reassessment from a unilateral 'reason to believe' exercise into an adversarial, information-disclosed, pre-decisional process. Its first and largest application was the Ashish Agarwal fiction, which deemed the old notices to be 148A(b) show-cause notices. Writ courts have repeatedly emphasised that the information must be supplied and a genuine opportunity given; but they have also cautioned that the section 148A(d) order (a threshold 'fit case' decision) is not to be tested as if it were the final assessment — the merits are for the reassessment, and writ interference at the 148A stage is limited.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025), as substituted by the Finance Act, 2024 (w.e.f. 1 September 2024).
148A. (1) Where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment in the case of an assessee for the relevant assessment year, he shall, before issuing any notice under section 148 provide an opportunity of being heard to such assessee by serving upon him a notice to show cause as to why a notice under section 148 should not be issued in his case and such notice to show cause shall be accompanied by the information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year.
(2) On receipt of the notice under sub-section (1), the assessee may furnish his reply within such period, as may be specified in the notice.
(3) The Assessing Officer shall, on the basis of material available on record and taking into account the reply of the assessee furnished under sub-section (2), if any, pass an order with the prior approval of the specified authority determining whether or not it is a fit case to issue notice under section 148.
(4) The provisions of this section shall not apply to income chargeable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A.
Explanation.—For the purposes of this section and section 148, "specified authority" means the specified authority referred to in section 151.
C. AUTHORITIES
The authorities concern the genesis of the provision and the limited scope of interference at the pre-issue stage.
1. Genesis and operation
Union of India v. Ashish Agarwal (2022) 444 ITR 1 (SC) — cross-reference
Relevance: The deemed-notice fiction operated through section 148A(b): the old-regime section 148 notices were treated as 148A(b) show-cause notices, the AO being directed to supply the information/material and to follow the rest of the 148A procedure. The decisive authority on the practical first deployment of section 148A. (See section 148.)
Procedure and approval — principle
Position: The AO must (i) confront the assessee with the information suggesting escapement, (ii) give a real opportunity to reply, (iii) consider the reply, and (iv) obtain the specified-authority approval (section 151) before passing the order and issuing the section 148 notice. Failure to supply the information, or a mechanical/ non-speaking treatment of the reply, vitiates the foundation of the reassessment.
Candour note: A large body of High Court authority applies these requirements case by case; they are summarised as the settled working rule.
2. Limited scope of writ interference at the 148A stage
Red Chilli International Sales v. ITO (2023) — Supreme Court (order)
Court: Supreme Court of India (order in SLP, 2023).
Held: The Court indicated that the scope of interference, at the stage of an order under section 148A(d) and the consequent section 148 notice, is limited; ordinarily the assessee should pursue the statutory remedies in the reassessment, and writ jurisdiction is not to be exercised as a matter of course to scrutinise the merits at the threshold stage (subject to want of jurisdiction or breach of natural justice).
Significance: Authority restraining premature merits-challenges to the 148A(d) order; the 'fit case' determination is a threshold filter, not the final adjudication.
3. Threshold scrutiny and the first-proviso bar
Ganesh Dass Khanna v. ITO (2023) (Delhi High Court)
Court: Delhi High Court.
Held: Applying the post-2021 scheme and the first proviso to section 149, the Court held that reassessment for older assessment years that had become time-barred under the pre-2021 law as on 1 April 2021 cannot be reopened; the section 148A order and the section 148 notice must respect the surviving limitation, and the monetary threshold for the extended period must be satisfied with reference to income 'represented in the form of an asset'.
Significance: Representative High Court authority applying the first-proviso protection and the threshold discipline to the section 148A stage; read with Rajeev Bansal. (Practitioners should confirm the precise reported citation for the year/forum relied on.)
4. Recorded reasons cannot be supplemented; threshold-stage interference
Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405 — cognate
Held: A statutory authority's order must be judged by the reasons it records; those reasons cannot be supplemented by fresh reasons through an affidavit or otherwise. An order bad at inception does not become valid by later justification.
Relevance: Applied to section 148A: the information supplied and the reasoning in the 148A order define the basis of the reopening and cannot be improved later; the assessee must be confronted with the actual material relied on.
Anshul Jain v. PCIT (2022) (Delhi High Court) — SLP dismissed by the Supreme Court
Held: Where the section 148A(d) order and the consequent section 148 notice are otherwise within jurisdiction, the assessee should ordinarily pursue the statutory remedies in the reassessment rather than challenge the threshold order by writ; the High Court declined to interfere and the Supreme Court dismissed the SLP.
Significance: Reinforces (with Red Chilli) that the 148A(d) 'fit case' determination is a threshold filter, not to be litigated on the merits by writ as a matter of course. (Confirm the precise reported citation before independent reliance.)
5. The transitional litigation at the High Court level
Mon Mohan Kohli v. ACIT (2021) 441 ITR 207 (Delhi)
Court: Delhi High Court; judgment dated 30 October 2021.
Held: Reassessment notices issued under the old section 148 after 31 March 2021 (relying on TOLA notifications) were without authority of law, because, from 1 April 2021, reassessment could be initiated only under the substituted regime — including the section 148A pre-issue procedure; the Court quashed over 1,300 such notices. (This High Court view was the backdrop to the Supreme Court's salvage of the notices in Ashish Agarwal.)
Significance: A leading High Court decision on the centrality of the section 148A procedure in the new regime, and on the invalidity of old-regime notices issued after the cut-off; read with Ashish Agarwal and Rajeev Bansal.
6. 'Information', sharing of material, and the manner/date of the notice
Divya Capital One (P) Ltd. v. ACIT (2022) 445 ITR 436 (Delhi)
Court: Delhi High Court; judgment dated 12 May 2022.
Held: The expression 'information which suggests that income has escaped assessment' cannot be resorted to lightly; it does not give the Revenue unbridled power to reopen. Section 148A(c) casts a duty (the word 'shall') on the AO to consider the assessee's reply before passing the 148A(d) order, and the material/information relied on in the 148A(b) notice must be shared with the assessee; not doing so denies an effective opportunity and vitiates the order.
Significance: A leading post-2021 ruling on the quality of 'information' and the mandatory consideration of the reply and sharing of material at the 148A stage.
Suman Jeet Agarwal v. ITO (2022) 449 ITR 517 (Delhi)
Court: Delhi High Court.
Held: Explaining when a notice is 'issued' for limitation purposes in the digital environment, the Court held that a notice is 'issued' only when it leaves the control of the sender (e.g. is dispatched/emailed), and analysed the different modes of generation/despatch on the portal; mere digital signing or generation without despatch within the limitation period does not make the notice validly 'issued' in time.
Significance: Important on the manner and date of issue of the section 148/148A notice — directly relevant to limitation under section 149 in the faceless/e-issuance context.
Touchstone Holdings (P) Ltd. v. ITO (2022) 451 ITR 196 (Delhi)
Court: Delhi High Court.
Held: On a challenge to the 148A(d) order and consequent notice, the Court upheld the reassessment as within the time surviving under the Income-tax Act read with TOLA, and declined to interfere at the threshold; it took a view (on the first-proviso/TOLA computation) from which the Gujarat High Court in Keenara Industries later dissented — a divergence ultimately addressed by the Supreme Court in Rajeev Bansal.
Significance: Illustrates the threshold-stage approach and the inter-High-Court divergence on the surviving-time computation; read with Keenara Industries and Rajeev Bansal.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; Tribunal / AAR / High Court orders are flagged. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.