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Key points to be followed while handling the notices issued under section 148A/148 in March 2025

In relation to re-assessment proceedings under provisions of section 147 of the Income-tax Act, 1961, the timelines to issue notices under sections 148 and 148A of the Act and the prior-procedure to be followed under section 148A has been changed again vide the Finance (No. 2) Act, 2024.

The revised timelines to issue notice under sections 148 and 148A of the Act are as under:

In view of the above timelines, notices under sections 148 or 148A have been issued by the Assessing Officer for AYs 2019-20 and 2021-22 in the month of March 2025.

The provisions of section 148A of the Act carves out exceptions, in pursuant to which the Assessing Officer is empowered to issue notice under section 148 of the Act directly, without following procedure delineated under section 148A of the Act.

Way forward to handle the notices under section 148A or 148 of the Act

• Notice under section 148A of the Act

To follow the procedure under section 148A of the Act, the AO is required to issue show cause notice under section 148(1) of the Act to provide an opportunity of being heard, as to why notice under section 148 of the Act should not be issued. The taxpayer / tax professionals are recommended to follow hereinbelow given steps while handling the proceedings under section 148A of the Act i.e. prior to issuance of notice under section 148 of the Act by the AO:

• Reconcile the information available with the AO with the facts in the case of the Assessee:

The notice under section 148A(1) of the Act is to be accompanied by the information, which suggests that that income chargeable to tax has escaped assessment in the case of the Assessee. In order to demonstrate that whether the information available with the AO pertains to the Assessee and in relation to relevant AY, while responding to the notice, the facts in the instant case of the Assessee with the information available and provided to the Assessee by the AO should be properly reconciled.

• Draft factual submission:

In view of the facts/circumstances/documents in the instant case of the Assessee, factual submission is to be drafted and furnished before the AO in response to notice under section 148(1) of the Act.

• Draft legal submission: 

If necessary, a legal submission in support of the applicable law in the case of the Assessee is to be drafted and furnished before the AO in response to notice under section 148(1) of the Act.

• Identify the legal / technical ground:

During the course of the proceedings, technical ground e.g. whether correct procedure is followed and proper approval from specified authority is obtained, is to be identified for the purpose of WRIT/proceedings before Appellate Authority.

• Notice under section 148 of the Act

Where the notice is issued under section 148 of the Act directly without prior-procedure under section 148A of the Act or after following the procedure under section 148A of the Act, time is provided to the Assessee to furnish his return of income within the specified time.

The return of income by, disclosing proper particulars of income must be filed by the Assessee within the time period in response to notice under section 148 of the Act. And during the course of proceedings, the response to the questioner is to be drafted and furnished diligently. 

Key Takeaways:

• Every notice is to be responded in a timely manner.
• Before response, the information is to be reconciled and to be furnished before the AO in support of factual submission and legal submission (where necessary).
• The proceedings is to be analysed minutely that whether the proceedings are initiated and concluded in a timely manner. Also, the procedure as per provisions of section is correctly followed or not.