Reassessment notices under sections 148 and 148A: what actually decides the outcome

Reassessment notices have become substantially more common as the department has matched third-party data through the Annual Information Statement against filed returns. Most taxpayers respond to the merits immediately. That is usually a mistake — the procedural questions are both easier to win and dispositive.

Before issuing a notice under section 148, the assessing officer must conduct an inquiry under 148A(a) and give an opportunity of being heard under 148A(b), supplying the material relied on. This is not a formality. It is the only stage at which the proceeding can be stopped without an assessment order existing.

Your reply at this stage should test four things before it addresses the income at all: whether the material was actually furnished to you, whether the limitation period under section 149 has expired, whether the monetary threshold is met for the year in question, and whether sanction under section 151 came from the authority the statute designates.

Non-furnishing of the underlying material is the most frequent defect — the notice recites a conclusion without enclosing what produced it, leaving you unable to meaningfully respond.

Limitation and threshold are the next most common. For years beyond the shorter window, the escaped income must cross the statutory monetary limit, and that limit must be demonstrable from the material rather than asserted.

Sanction from a non-designated authority is rarer but fatal where it occurs, because the defect is jurisdictional rather than procedural.

We draft show-cause replies that put the procedural challenge first and the merits second, citing jurisdictional High Court authority on each point. Where the defect is clear, proceedings are frequently dropped before an assessment order is ever passed — which is both cheaper and faster than winning the same point on appeal two years later.