Section 148 and 148A: Reassessment Notices

Section 148 becomes Section 280 and Section 148A becomes Section 281 of the Income tax Act, 2025, applying from Tax Year 2026-27. Both the current and forthcoming time limits are set out below, since which one applies depends on the year the notice relates to. This article is for general information and does not constitute tax advice.

A reassessment notice reopens a year the department believes had income that escaped assessment, sometimes years after your original return was accepted. This is different from a scrutiny notice, which examines the return you just filed, in the same cycle, not a past one.

The mandatory step first: a show-cause notice with the actual material

Before a reassessment notice can be issued, the Assessing Officer must first serve a show-cause notice, accompanied by the actual information suggesting income has escaped assessment, not just an allegation. You get an opportunity to reply within the period specified. Only after considering that reply, on the basis of the material on record, and with the prior approval of a specified higher authority (the Additional or Joint Commissioner or equivalent), can the officer pass an order determining whether reassessment is a fit case. The reassessment notice itself, if it comes, is the outcome of this process, not the starting point.

What typically triggers this: information flagged through the Annual Information Statement or Statement of Financial Transactions, a search or survey on a third party revealing your name, information from another law enforcement or regulatory authority, or an audit objection. There is almost always a specific piece of information behind it, and the show-cause notice is required to disclose it to you.

Responding to the show-cause notice is the real point to fight, not the eventual reassessment notice. A well-reasoned response here, explaining or documenting the transaction, can end the matter before reassessment is even opened. Once the reassessment notice is actually issued, you are past that checkpoint and into a full proceeding.

Reassessment time limits: two positions, and which one applies matters

This is worth being precise about, because the limit has already moved once and is set to move again. The extended outer limit was 10 years before September 2024. The Finance (No. 2) Act, 2024 cut it, and the current position under the 1961 Act, the operative law for this filing cycle, is:

Escaped income	Current limit (1961 Act, this filing cycle)	From Tax Year 2026-27 (2025 Act)
Under ₹50 lakh	3 years 3 months	4 years 3 months
₹50 lakh or more	5 years 3 months	6 years 3 months

The move from 3y3m/5y3m to 4y3m/6y3m is not a further tightening of the reassessment window, it reflects the 2025 Act counting from the end of the tax year rather than the assessment year that followed it, a one-year shift in the reference point rather than a change in how long the department actually has. Given the limit has already changed once, treat any figure quoted elsewhere as worth re-checking against the year the notice actually concerns, rather than assumed to be permanent.

The threshold is checked against the escaped income for that specific year, not your income across years and not the eventual tax demand, so one large transaction can push a single year over the ₹50 lakh line even where regular annual income is far lower. The show-cause notice cannot be issued at all within one year from the end of any tax year, under either Act, and no reassessment notice can be issued unless the officer has information suggesting escaped income, per a formal risk framework, an audit objection, a tribunal or court finding, or a specified information-sharing scheme.

Cases that skip the show-cause step entirely

Search, seizure, or requisition cases, and certain survey cases where specific material is found, go straight to a reassessment notice without the show-cause checkpoint, on the basis that sufficient grounds are already established by the search or survey itself. This applies under both the current and forthcoming positions.

Reassessment sits outside faceless assessment

Under the 2025 Act the Assessing Officer for a reassessment notice and show-cause notice is expressly defined as one other than the National Faceless Assessment Centre or its units. Reassessment is handled by a jurisdictional officer, unlike ordinary scrutiny, which runs through the faceless structure.

What happens once the notice is actually issued

You must file a return for that year within the time specified in the notice, which cannot be less than 30 days and cannot exceed three months from the end of the month the notice is issued. A return filed after that window is not treated as a valid return for the purpose. The reassessment proceeding that follows runs largely like an ordinary assessment, document requests, a hearing, and a final order. If that order goes against you, the same appeal path applies as for any other assessment order, covered in Appeals: Challenging an Income Tax Order.