Section 148 Income Tax Act: Notice for Income Escaping Assessment
Section 148 sets out the notice that precedes reassessment of income that has escaped assessment. It operates alongside Section 147, the pre-notice safeguards in Section 148A, and the time limits in Section 149. The corresponding notice provision in the Income-tax Act, 2025 is Section 280.
Meaning and purpose of Section 148
Income escaping assessment means income chargeable to tax that was not assessed, or was not properly brought to tax, for the relevant assessment year. Assessing Officer (AO) is the income-tax authority empowered to conduct assessment or reassessment. A Section 148 notice requires the taxpayer to file a return for the relevant assessment year before the AO proceeds under Section 147.
A reassessment notice is not, by itself, a final finding of concealed income or a tax demand. Its validity depends on the statutory information, preliminary procedure, limitation period and any applicable approvals.
Key requirements under Section 148
Section 148(1): Issue of notice and return of income
Before reassessment or recomputation under Section 147, and subject to Section 148A, the AO issues a notice with a copy of the order under Section 148A(3), where that procedure applies. The notice requires a return of income for the relevant assessment year within the period specified, subject to the statutory maximum of three months from the end of the month of issue.
The AO must possess information suggesting that taxable income has escaped assessment. Where information is received under the notified Section 135A scheme, the special approval requirement and exception to the Section 148A procedure must be considered.
Section 148(2): Form and effect of the return
The return must be furnished in the prescribed form and verified in the prescribed manner. The Act generally applies as though the return were furnished under Section 139. A return filed after the period stated in the notice is not treated as a return under Section 139 for this purpose.
Section 148(3): What counts as relevant information?
Specified information may include material identified under the Central Board of Direct Taxes risk-management strategy, an audit objection, information received under tax information-exchange agreements, material obtained under a notified Section 135A scheme, information requiring action following a court or tribunal order, and qualifying survey information. The actual statutory conditions and effective dates govern each category.
How the reassessment notice procedure works
- Information identified: The AO identifies material suggesting escaped taxable income for a particular assessment year.
- Pre-notice opportunity: Ordinarily, a show-cause notice under Section 148A(1) provides the information and invites a response.
- Taxpayer's reply: The assessee can submit explanations, documents and legal objections within the specified period.
- Reasoned decision: Under Section 148A(3), the AO considers the record and reply and decides, with the prescribed approval, whether a Section 148 notice should issue.
- Notice and return: If the case proceeds, a Section 148 notice is issued and the taxpayer furnishes the required return.
- Reassessment: The AO undertakes proceedings under Section 147, subject to applicable safeguards and limitation rules.
The statutory exception for information received under the notified Section 135A scheme should not be confused with the general requirement to offer a pre-notice hearing.
Section 149 limitation periods: Rules from 1 September 2024
| Escaped income indicated by information | Section 148A show-cause notice | Section 148 reassessment notice |
|---|---|---|
| Below Rs. 50 lakh | Generally within 3 years from end of relevant assessment year | Generally within 3 years and 3 months |
| Rs. 50 lakh or more, subject to statutory conditions | Generally within 5 years | Generally within 5 years and 3 months |
These are general statutory outer limits, not a determination that a particular notice is valid. Transitional restrictions, the character and amount of escaped income, exclusions and other statutory provisions can affect the calculation. The earlier 10-year framework should not be presented as the ordinary post-September 2024 rule.
What should a taxpayer do after receiving a notice?
- Check the assessment year, date, issuing authority, applicable law and limitation period.
- Review the information enclosed with the Section 148A show-cause notice and the decision under Section 148A(3), where applicable.
- File a timely, evidence-based response; retain electronic acknowledgments and supporting records.
- Submit the return required by Section 148 within the period specified in the notice.
- Raise jurisdictional or procedural objections promptly and seek professional advice where significant sums or complex transactions are involved.
Income-tax Act, 2025: Corresponding provisions
The Income-tax Act, 2025 came into effect on 1 April 2026. For the new Act's reassessment framework, Section 279 corresponds to old Section 147, Section 280 to Section 148, Section 281 to Section 148A, Section 282 to Section 149 and Section 284 to Section 151. The appropriate Act depends on the tax year, commencement and saving provisions, and the nature of the proceeding.
Under the 2025 Act, the AO ordinarily provides a show-cause opportunity under Section 281 before issuing a reassessment notice under Section 280. The Department's official transition guidance explains the relationship between the two Acts.
Legislative background
The original Section 148 was substantially reworked by the Finance Act, 2021, including introduction of Section 148A. The Finance (No. 2) Act, 2024 substituted Sections 148 and 148A with effect from 1 September 2024. Older provisions concerning 1991-2005 return notices, the former general requirement to record reasons under Section 148(2), and other historical wording are not reproduced as current law because they were superseded. They remain relevant when examining the validity of proceedings governed by those earlier versions.
Official statutory sources
- Income Tax Department - Section 148, post-2024 text
- Income Tax Department - Section 148A procedure
- Income Tax Department - Statutory limitation reference
- Income Tax Department - FAQs on transition to the Income-tax Act, 2025
- Income Tax e-Filing Portal
Frequently asked questions
What is a Section 148 notice?
It is a statutory notice requiring a return of income before the Assessing Officer reassesses income believed to have escaped assessment, subject to applicable procedural safeguards.
Is a hearing required before a Section 148 notice?
Ordinarily, Section 148A requires a show-cause notice and an opportunity to respond, followed by an approved order. The statute provides a limited exception for information received under the notified Section 135A scheme.
What is the time limit for a Section 148 notice?
Under the rules effective from 1 September 2024, the ordinary limit is three years and three months from the end of the relevant assessment year, or five years and three months where the statutory threshold of Rs. 50 lakh or more is met, subject to statutory qualifications and transitional provisions.
Which provision replaces Section 148 under the Income-tax Act, 2025?
Section 280 is the corresponding provision. Section 281 addresses the preliminary show-cause procedure, and Section 282 concerns time limits.
This article is a general explanation of the law as at October 2026. The exact text and validity of any notice depend on the relevant assessment or tax year, amendments, transitional provisions and case-specific facts.