Pre-Reassessment Procedure (formerly s. 148A — FA 2021 Insertion)

Section 287A — Pre-Reassessment Procedure (formerly s. 148A — FA 2021 Insertion)

Section 287A is the most consequential procedural reform of the post-2021 reassessment regime. Before FA 2021, reassessment under section 148 was based on the AO's 'reasons to believe' — often an opaque internal AO assessment leading to assessees being blindsided by reassessment notices. FA 2021 introduced the section 148A pre-procedure to require: (i) specific information; (ii) inquiry with prior approval; (iii) show-cause; (iv) reply consideration; (v) speaking order. Section 287A re-states this regime in the new Act.

Four-step pre-procedure. (a) Information triggering — the AO must have 'information' suggesting income has escaped assessment. 'Information' — narrowly defined post-FA 2022 amendment — must be from specific sources: (i) audit objection; (ii) information from another tax authority; (iii) information in any computer-based system; (iv) survey / search / requisition information; (v) information from any law enforcement agency. (b) Optional inquiry — AO may conduct inquiry with PCIT approval. (c) Mandatory show-cause — AO must serve SCN on assessee with specified time (typically 7-30 days) for reply. (d) Speaking order — AO must pass written order, with PCIT approval, deciding whether s. 287 notice is fit case. The order must be passed within 1 month from receipt of reply / expiry of reply time.

Specified authority approval. PCIT / CIT approval is required at multiple stages: (i) optional inquiry; (ii) show-cause notice; (iii) final speaking order. This multi-tier approval is a major safeguard.

Carve-outs (sub-section (3)). Section 287A does NOT apply where: (a) Search assessment under sections 293-300 — different procedure; (b) Requisition under section 244 — different procedure. For ordinary scrutiny / reassessment outside search context, section 287A applies fully.

Continuity of jurisprudence. UOI v. Ashish Agarwal (2022) 444 ITR 1 (SC) — transitional FA 2021 cases re-treated as 287A SCN; Hexaware Technologies v. ACIT (2024) — pre-148A jurisprudence on 'reasons to believe' continues to be relevant. All apply with adaptation.

Practitioner takeaways. (i) For show-cause notices under section 287A — prepare comprehensive reply within the deadline; engage senior tax counsel. (ii) Verify each procedural step — without proper SCN / opportunity / speaking order, the eventual section 287 notice is vitiated. (iii) Document the specific 'information' relied upon by AO; absence of valid information forfeits jurisdiction. (iv) Watch the 1-month deadline for AO's order; if order is delayed, raise jurisdictional objection. (v) For search-cases — section 287A does not apply; sections 293-300 apply directly.