Last reviewed: 13 November 2026. A reassessment notice reopens an earlier year because the department holds information suggesting income escaped assessment, often from AIS, SFT reports, a search on someone else, or the investigation wing's data on accommodation entries. Since 2021 the process starts with a show cause notice under section 148A, and the reply at that stage is the best chance to stop the reopening altogether.
Part of our income-tax notice series. For every notice type, the time limits and the appeal route, start with the complete guide to income-tax notices.
Typical triggers
- Cash deposits, property purchase or sale, or large investments in AIS for a year in which no return, or a low-income return, was filed.
- Information from the investigation wing that the taxpayer received accommodation entries, bogus purchases or long-term capital gains on penny stocks.
- Information from a search or survey on another person.
- Sale of property where the stamp duty value is higher than the declared consideration.
Time limits (notices issued from 1 September 2024)
| Escaped income | 148A notice no later than | 148 notice no later than |
|---|---|---|
| Below ₹50 lakh | 3 years from end of the AY | 3 years and 3 months from end of the AY |
| ₹50 lakh or more (asset, expenditure or entry) | 5 years from end of the AY | 5 years and 3 months from end of the AY |
Check limitation first. A notice issued beyond these limits is without jurisdiction, and that alone can end the matter.
How to reply to the 148A notice
- Read the information and material supplied with the notice. If it is not supplied, ask for it in writing; the reply depends on it.
- Test limitation, the monetary threshold for the extended period, and whether the information relates to you and to that year.
- Explain the transaction with documents: bank statements, sale deeds, contract notes, the return in which it was already offered.
- Where the issue was examined in an earlier scrutiny, point that out. Reopening on the same material is a change of opinion; see when section 148 reassessment fails as change of opinion.
- Ask for the order under section 148A to deal with each objection. A non-speaking order can be challenged by writ.
After the 148 notice
- File the return within the time stated, even if you object to the reopening; otherwise a best-judgment assessment can follow.
- Ask for the reasons and the approval if not already supplied, and file objections where appropriate.
- The reassessment order must be passed within the time allowed by section 153(2), which runs from the service of the 148 notice; diarise it from the date of service.
Illustrative example
An individual receives a 148A notice in January 2026 for AY 2022-23 citing cash deposits of ₹18,40,000. The escaped amount is below ₹50 lakh, so the shorter time limit applies (three years and three months from the end of the AY, subject to the exclusion in section 149 for the time allowed to reply to the 148A notice). The reply shows that ₹15,00,000 was the proceeds of a family property sale already offered in that year's return with capital gains, and the balance was cash withdrawn from the same account and redeposited within the same week, with both entries visible in the bank statement. The officer weighs the reply in the 148A order; if a 148 notice is still issued, the same evidence forms the base of the reassessment reply and any appeal.
Frequently asked questions
What is a 148A notice?
It is a show cause notice asking why a reassessment notice should not be issued, along with the information suggesting income escaped assessment. Your reply is considered before the officer passes an order deciding whether to reopen.
What is the time limit for a section 148 notice?
For notices issued from 1 September 2024, three years and three months from the end of the assessment year, or five years and three months where the escaped income is ₹50 lakh or more.
Should I file a return after receiving a 148 notice?
Yes, within the period stated in the notice, even if you plan to challenge the reopening. Not filing can lead to a best-judgment assessment.
Can a reassessment notice be challenged?
Yes. Common grounds are limitation, absence of valid approval, failure to supply the information relied on, a non-speaking 148A order, and reopening on the same material already examined (change of opinion).
Which law applies to a 148 notice issued in 2026 for an old year?
For assessment years up to 2026-27, reassessment is initiated and completed under the Income-tax Act, 1961, by virtue of section 536 of the Income-tax Act, 2025.
We read the notice against your return, AIS and books, tell you what it is really asking, prepare the reply with supporting documents, file it on the portal and follow the matter through to the order and, where needed, appeal. The outcome rests with the tax authority; our work is to put a complete, documented response before it.
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This article is for general information and does not constitute advice on any specific case. Sources: the Income-tax Act, 1961 (which continues to govern assessment years up to 2026-27 under section 536 of the Income-tax Act, 2025), the Income-tax Act, 2025, the Finance Act, 2026 and the CBDT instructions and circulars cited in the text. Time limits run from the date of service of each notice or order; confirm the current position and the exact dates in your notice before acting. Firm details: Somesh Chandak & Associates, Chartered Accountants, Unit 119, 1st Floor, Centura Square IT Park, SG Barve Road, Wagle Estate, Thane West 400604. FRN 158694W.