Procedure Under Section 148A of the Income Tax Act

The procedure under Section 148A of the Income Tax Act is used when the tax department believes some income was not reported correctly. This rule started on 1 April 2021. It makes sure the taxpayer gets a chance to explain their side before the tax officer starts checking the case again. This helps keep the process fair and protects the rights of taxpayers while allowing the tax department to do its job.

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What Triggers Section 148A

When the Assessing Officer receives information suggesting that taxable income has escaped assessment, the process under Section 148A of the Income Tax Act is initiated. This information must be specific and supported by facts. The officer cannot act on mere suspicion. Prior approval from the specified authority is mandatory before moving ahead.

Issue of Show Cause Notice

The first formal step is the issue of a show cause notice to the taxpayer. This notice explains why the officer believes income has escaped assessment. The taxpayer is given a minimum of seven days and a maximum of thirty days to respond. This time window allows the taxpayer to submit an explanation or supporting documents.

Consideration of Taxpayer’s Reply

After receiving the reply, the Assessing Officer reviews the response carefully. The officer evaluates whether the explanation addresses the concerns raised. This step is important because it ensures that reassessment is not started without due consideration.

Passing of Order

If the officer is satisfied with the reply, the matter is closed. If not, a reasoned order is passed under Section 148A, and a notice under Section 148 is issued. This order must clearly state why reassessment proceedings are required.

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Key Points to Remember

The procedure under Section 148A of the Income Tax Act applies to most reassessment cases, except search and requisition matters. Notices issued without following this procedure are invalid. Overall, Section 148A brings transparency, accountability, and a fair hearing into the reassessment process while keeping compliance strict and time-bound.