Received a show cause notice under Section 148A of the Income-tax Act – asking why your case should not be reopened for reassessment because of information about a property purchase, cash deposits, share transactions, foreign remittances or a turnover mismatch? This free CA-built tool prepares a professional objection reply: it checks limitation for your assessment year automatically, assembles the applicable legal grounds with current Supreme Court and High Court authority, builds the source-of-funds explanation for your specific transaction, and outputs a consolidated PDF ready to upload in e-Proceedings.
1Taxpayer and notice details
2Preliminary and jurisdictional objections (tick if applicable)
3What does the notice allege? (select all that apply)
How the reassessment process works (notices for AY 2025-26 and earlier)
Under the recast provisions (Finance (No. 2) Act, 2024), the process runs: show cause notice under Section 148A(1) setting out the information suggesting income has escaped assessment – your reply within the time allowed (minimum 7 days, up to 30, extendable on request) – a reasoned order under Section 148A(3) with prior approval deciding whether it is a fit case – and only then a notice under Section 148 requiring a return, against which reassessment proceeds. A strong 148A reply is therefore the cheapest exit: it can end the matter before reassessment ever begins.
Time limits (Section 149): the show cause notice must issue within 3 years from the end of the assessment year – extendable to 5 years only where the escaped income represented in an asset, expenditure or entry is Rs 50 lakh or more. The Section 148 notice gets a further 3 months. Two consequences worth checking in every notice: (1) the 50 lakh test applies to the escaped income, not the gross transaction value the AIS shows; (2) several years are now simply time-barred – see the table.
| AY | Below Rs 50 lakh | Rs 50 lakh or more |
|---|---|---|
| 2020-21 | Time-barred | Time-barred (window closed 30-06-2026) |
| 2021-22 | Time-barred | Open (SCN by 31-03-2027) |
| 2022-23 | Time-barred (SCN window closed 31-03-2026; s.148 by 30-06-2026) | Open (SCN by 31-03-2028) |
| 2023-24 | Open (SCN by 31-03-2027) | Open |
| 2024-25 / 2025-26 | Open | Open |
Do’s and don’ts for a 148A reply
- Do ask for the underlying material relied upon if it was not supplied with the notice – courts have held its non-supply violates natural justice, and you cannot answer what you have not seen.
- Do check limitation first – a below-50-lakh allegation for AY 2022-23 or earlier is now time-barred, and that single ground can end the matter.
- Do distinguish gross value from escaped income – a Rs 60 lakh property bought with disclosed funds involves no escaped income at all, let alone Rs 50 lakh.
- Do answer the merits with a document trail – bank statements, sale deeds, loan sanctions, contract notes, cash books – annexed and indexed.
- Do correct wrong AIS entries through the AIS feedback facility in parallel – and say so in the reply.
- Don’t ignore the notice or reply with a bare denial – the 148A(3) order will simply record non-cooperation and the 148 notice will follow.
- Don’t rely on technical grounds alone – lead with facts and source of funds, keep jurisdictional grounds as reinforcement, and preserve them for appeal.
Frequently asked questions
What happens if I do not reply to a 148A notice?
The Assessing Officer will pass the Section 148A(3) order on the available material, a Section 148 notice will issue, and you will be in full reassessment – filing a return again, facing questionnaires, and contesting additions with interest and possible penalty. The reply stage is your cheapest exit; use it.
The notice is based on an AIS entry that is wrong or duplicated. What do I do?
Say so specifically in the reply with evidence, demand the underlying information and its source, and simultaneously submit feedback against the entry in the AIS on the portal. Reporting-entity errors – duplicated SFT reports, another person’s PAN, gross values counted as income – are among the most common and most successfully resolved triggers.
The transaction was fully disclosed in my return. Can they still reopen?
Reopening requires information suggesting income has escaped assessment – not a second look at what was already disclosed and assessed. The Delhi High Court has quashed reassessments where no fresh material existed. Show precisely where the transaction appears in the return and computation.
How much time do I get to reply?
The notice must allow at least 7 days, and up to 30; you can seek an extension in writing. If the notice gives less than 7 days, that itself is an objection – but file the substantive reply too.
Is the 50 lakh limit about the transaction value?
No – it is about the escaped income as represented in an asset, expenditure or entry. A large transaction funded from disclosed sources involves no escaped income. This distinction defeats many extended-period notices.
Can I ask for a hearing in faceless proceedings?
Yes. The 148A stage now lies with your jurisdictional Assessing Officer, and the reply generated here requests a personal hearing or video conference. In later faceless assessment, the Seek Video Conferencing option on the portal serves the same purpose.