If you receive a Notice u/s 148/148A, it means the income tax officer disagrees with the previous assessment of your ITR and believes that your income has escaped assessment.
📜 Section 148A was introduced in the Income Tax Act by Finance Act, 2022, which requires the Assessing Officer to conduct an inquiry and provide an opportunity to the taxpayer before issuing notice under section 148.
📝 The Assessing Officer must Issue Notice u/s 148A(b) to the assessee containing the information along with adverse material purporting escapement of income, which can be countered by the assessee by way of material and evidence available with him.
💡 After assessing the taxpayer’s reply, the income tax officer shall decide whether it is a fit case to issue notice for income escaping assessment. If the income tax officer decides to reopen the case, a copy of the order and a notice (under Section 148) must be issued to the taxpayer.
⏰ A notice cannot be issued in normal scenarios if three years have elapsed since the end of the relevant assessment year. However, notice beyond three years can be taken up only if there is evidence that the taxpayer has evaded an assessment of taxable income of at least Rs 50 lakh. Notice can be issued beyond three years but after 10 years from the end of the relevant assessment year.
💼 The income tax officer shall obtain the approval of specified authority before conducting any such inquiries, providing an opportunity to the taxpayer, or passing such an order.
📄 The entire material and information relied upon by the Assessing Officer need to be supplied to the assessee along with the notice u/s 148A/Show Cause Notice.
💬 In case the assessee has requested a personal hearing or cross-examination of a third party or a statement of a third party, then the Assessing Officer is bound to provide the same with the approval of the specified authority.
👨⚖️ Since Section 148A is effective from 1st April 2021, any notice issued to the taxpayer under Section 148 after the said date, without following the procedure under Section 148A (i.e. without giving an opportunity of being heard) would be invalid and contrary to the provisions of the Income Tax Act.
🚨 The Courts have held repeatedly that the procedure envisaged u/s 148A of the Act is sacrosanct and has to be strictly followed in line with the intentions of the legislature for bringing new provisions u/s 148A of the act.
📝 After receiving the aforesaid order and notice u/s 148, the assessee needs to file the return of income for the relevant assessment year within the time prescribed in the notice u/s 148 and process for reassessment.
💼 In the new regime, the powers of the Assessing Officers have widened, and they can make a full scrutiny of the case under reference while making assessments u/s 148.
💡 Keep all documents ready for filing returns and reply to the notice. It is advisable to take professional help to reply correctly and timely.