A step-by-step checklist for responding to income tax reassessment notices — old Sections 147/148/148A mapped against the new Act, plus the live JAO-vs-FAO jurisdiction battle every practitioner needs to know about right now.
Why a Checklist, Not Just Instinct
Reassessment work rewards discipline more than almost any other area of income-tax litigation. The window to respond is short, the procedural safeguards are numerous and easy to overlook under time pressure, and — right now, in mid-2026 — the law itself is unusually unsettled, with a live Supreme Court remand on jurisdiction sitting on top of the routine substantive issues. A missed procedural point at the 148A stage is very hard to retrieve later; a systematic checklist catches it before the reply is filed, not after.
Old vs New: Section Mapping NEW
The reassessment provisions have been renumbered — but not restructured — under the Income Tax Act, 2025. The 2021 reform architecture (information-led reopening, a mandatory show-cause step before any reassessment notice, escaped-income-linked time limits, and prior approval of a specified authority) has been preserved in substance.
Income Tax Act 1961
- Income escaping assessment: Section 147
- Notice for reassessment: Section 148
- Show-cause procedure before notice: Section 148A
- Time limit for issuing notice: Section 149
- Sanction for issue of notice: Section 151
Income Tax Act 2025
- Income escaping assessment: Section 279
- Notice for reassessment: Section 280
- Show-cause procedure before notice: Section 281
- Time limit for issuing notice: Section 282
- Sanction for issue of notice: Section 284
Section 279 has itself been amended
Note that Section 279 of the new Act was itself amended by the Finance Bill, 2026 alongside a parallel amendment introducing old-Act Section 147A — both aimed at clarifying the JAO’s role in the pre-assessment enquiry stage. This means the new-Act reassessment framework is not simply a renumbering exercise frozen in time; it has already been touched by the same legislative fix discussed under the JAO-vs-FAO section below.
The Two-Stage Process: 148A Then 148
Since the Finance Act, 2021 reform, a reassessment notice cannot be issued directly. It is a two-stage process, and the checklist below is built around these two stages precisely because most winnable defects arise at Stage 1.
Stage 1 — Show-cause notice under Section 148A (old) / 281 (new)
The Assessing Officer must first conduct a preliminary enquiry (with the specified authority’s approval, where an enquiry is undertaken), then issue a written show-cause notice setting out the information suggesting income has escaped assessment, along with the material relied upon. The taxpayer must be given a minimum of 7 and up to 30 days to respond — and is entitled to request a personal hearing, cross-examination of any third party, or a copy of any third-party statement relied upon, which the AO must provide with the specified authority’s approval if requested.
The 148A(d) order
After considering the reply (or the absence of one), the AO passes a reasoned, speaking order deciding whether it is a fit case to issue a reassessment notice — again with the specified authority’s prior approval. This order itself is a checkpoint: a cryptic or non-speaking 148A(d) order that fails to deal with the taxpayer’s specific submissions is independently vulnerable to challenge.
Stage 2 — Notice under Section 148 (old) / 280 (new)
Only if the 148A(d) order favours reassessment does the formal notice under Section 148/280 issue, requiring the taxpayer to file a return (or treat an earlier return as filed in response) for the relevant assessment year. Reassessment itself then proceeds under Section 147/279, considering the escaped income alongside anything else that comes to the AO’s notice during the reassessment.
Skipping 148A altogether is a fatal defect
A Section 148 notice issued without following the Section 148A procedure — i.e., without giving the taxpayer any opportunity to be heard first — is invalid. This is one of the cleanest, most reliably successful grounds available and should be the very first thing checked on any reassessment file.
Time Limits — And Why They Are Now Contested
| Category | Time Limit | Condition |
|---|---|---|
| Normal cases | 3 years from end of relevant assessment year | No monetary threshold |
| Escaped income ₹50 lakh or more | 5 years from end of relevant assessment year | Reduced from the earlier 10-year window with effect from 1 October 2024 |
| Sanction — up to 3 years | Specified authority (lower rank) | Section 151/284 |
| Sanction — beyond 3 years | Specified authority (higher rank) | Section 151/284 |
Do the Rajeev Bansal arithmetic before you accept a limitation defence
For notices relating to AY 2013-14 through AY 2018-19, the Supreme Court’s ruling in Union of India v. Rajeev Bansal laid down a specific method for computing the “surviving time” available to the department, accounting for the TOLA (Taxation and Other Laws) extension period and the transition to the post-2021 procedure. A limitation objection on an old-vintage notice cannot simply cite the plain 3-year/5-year rule — it needs the Rajeev Bansal computation applied to the specific assessment year before you rely on it.
The Live Issue: JAO vs FAO Jurisdiction HOT
This is, right now, the single most consequential and unsettled issue in reassessment litigation, and every practitioner handling these files needs to be current on it.
The core argument
Several High Courts held that once the Faceless Assessment Scheme was notified, reassessment notices issued by a Jurisdictional Assessing Officer (JAO) — rather than through the faceless mechanism / Faceless Assessing Officer (FAO) — were invalid. The Bombay High Court’s ruling on this point was followed by a string of other High Courts, giving taxpayers a clean, largely fact-independent jurisdictional ground to challenge a JAO-issued notice.
Divergent High Court views, then a Supreme Court remand
Not every High Court agreed — some upheld the JAO’s authority, taking the view that the pre-assessment enquiry and issuance of the 148A/148 notices was always meant to sit with the JAO, with only the subsequent reassessment itself being conducted faceless through the NFAC. Given this split, the Supreme Court has taken up the batch of matters and remanded them to the respective High Courts for fresh decision, directing that assessment/reassessment proceedings pursuant to the impugned notices remain under interim stay in the meantime, on terms set by each High Court, with the matters expected to be decided by around 30 September 2026.
The legislative response — Section 147A / amended Section 279
The Finance Act, 2026 introduced Section 147A into the old Act (with a corresponding amendment to Section 279 of the new Act), explicitly confirming — retrospectively from 1 April 2021 — that the pre-assessment enquiry and issuance of Sections 148A/148 notices are meant to be conducted by the JAO, with only the completion of reassessment shifting to the NFAC. This is a direct legislative attempt to neutralise the JAO-vs-FAO ground going forward.
Do not drop this ground — but do not rely on it alone
As long as Section 147A’s validity is itself sub judice, the JAO-vs-FAO ground remains available and should still be raised as a without-prejudice preliminary objection in any live reassessment matter falling in the affected window. But given the retrospective legislative fix and the pending Supreme Court remand, a competent response cannot rest on this ground alone — it needs to be argued alongside jurisdiction, limitation, sanction, the material relied upon, natural justice, and the facts of the addition itself, exactly as the courts have now signalled taxpayers should do.
The Practitioner’s Response Checklist
Confirm which Act and which stage governs the notice
Identify the assessment year, whether the notice is a fresh 148A show-cause or an already-issued 148, and whether the proceeding falls under the 1961 Act (per Section 536(2)(c)/(e) transitional rules) or the 2025 Act.
Check who issued it — JAO or FAO
Given the live litigation above, this is now a standing item on every reassessment checklist, not an occasional one. Note the issuing authority and flag it as a preliminary objection where relevant to the AY in question.
Verify limitation, applying Rajeev Bansal where relevant
For AY 2013-14 to AY 2018-19 notices, run the TOLA-adjusted computation. For later years, apply the plain 3-year/5-year rule, confirming which threshold (₹50 lakh or more) is actually being invoked and whether the department’s own material supports crossing that threshold.
Confirm sanction was taken from the correct specified authority
Cross-check the rank of the sanctioning authority against the applicable time band (up to 3 years vs beyond 3 years) — sanction from the wrong authority has independently invalidated notices in several cases.
Demand the underlying material, and read it critically
The 148A notice must be accompanied by the information/material the AO relies on. Check whether it is genuinely “information suggesting escapement” or merely a suspicion, borrowed satisfaction from another authority without independent application of mind, or material that on its face does not relate to the taxpayer or the year in question.
File a complete, evidenced reply within the window
Address both the jurisdictional/procedural objections and the substantive explanation in the same reply, in the alternative — don’t wait for a later stage to raise a ground that should have been flagged now.
Request a personal hearing and cross-examination where relevant
Put this in writing and keep the request on record — it closes off the same natural-justice loopholes that recur across both direct-tax and GST litigation.
Scrutinise the 148A(d) order before the 148 notice is even challenged
A non-speaking or mechanically-reasoned 148A(d) order — one that does not actually engage with the taxpayer’s reply — is a defect in its own right, independent of anything that follows.
Track the updated-return interaction
Where a client has received a 148A show-cause notice, check the interplay with the updated return (ITR-U) window — recent Budget changes restrict filing an updated return once a defined period has elapsed since the end of the relevant assessment year, which can affect settlement strategy.
Decide: writ petition or wait for the reassessment order
Clear-cut jurisdictional or limitation defects apparent on the face of the notice are strong writ candidates. Fact-heavy disputes about the material or the merits of the addition are usually better argued through the reassessment proceeding itself and, if needed, the ordinary appeal route — courts have shown limited patience for writ petitions that really turn on disputed facts.
Common Grounds for Challenge
148A procedure skipped entirely
No show-cause notice, no opportunity to respond, or no 148A(d) order before the 148 notice issued.
Jurisdictional defect
JAO vs FAO issue (subject to the live litigation above), or notice issued by an officer without territorial/subject-matter jurisdiction over the taxpayer.
Limitation
Notice issued beyond the 3-year/5-year window on a correct Rajeev Bansal-adjusted computation, or the ₹50 lakh threshold not actually being met on the department’s own material.
Invalid sanction
Approval obtained from an authority below the rank required for the relevant time band, or sanction granted mechanically without genuine application of mind.
Borrowed or vague satisfaction
The AO’s “reason to believe”/”information” is a mechanical reproduction of another authority’s report (e.g., an investigation wing report) without independent application of mind to the taxpayer’s specific facts.
Change of opinion
Where the material now being relied on was already disclosed and considered during the original assessment, reassessment on the same material is impermissible as a mere change of opinion.
Which Act Governs Your Client’s Notice?
CBDT’s own transition guidance gives a clear worked example worth keeping on file: where a 148A(1) show-cause notice was issued under the 1961 Act — even shortly before the new Act’s commencement — the entire consequential sequence, including the 148A(3)/(d) order and the eventual Section 148 notice, continues to be governed by the 1961 Act, subject to the Section 149 limitation period being respected. Section 536(2)(c) is explicit that proceedings for a tax year beginning before 1 April 2026 continue under the repealed Act even where steps in that proceeding are taken after the new Act’s commencement.
Pitfalls to Avoid
Sitting on the 7-to-30-day window
The 148A response window is short by design. Treat it with the same urgency as a limitation-bound court filing, not routine correspondence.
Betting everything on JAO-vs-FAO
Given the pending Supreme Court remand and the retrospective Section 147A fix, this ground alone is no longer a safe, standalone strategy — plead it, but build the rest of the case in parallel.
Not demanding the underlying material
A reply drafted without first obtaining and scrutinising the actual information/material relied upon is working blind — always ask for it explicitly if it wasn’t supplied with the notice.
Applying the plain limitation rule to an old-vintage notice
For AY 2013-14 to AY 2018-19 matters, skipping the Rajeev Bansal arithmetic and relying on the plain 3-year/5-year rule can lead to a limitation objection that simply doesn’t hold up.
Common Questions
Can reassessment be initiated on the very same facts already examined in the original assessment?
Generally no — this is the “change of opinion” bar, well-settled in judicial precedent, and it remains available as a defence where the reassessment is genuinely built on material already disclosed and considered earlier, rather than fresh information.
Is a personal hearing mandatory at the 148A stage?
It is not automatic in every case, but where the taxpayer specifically requests a personal hearing, cross-examination, or a third-party statement, the AO is required to provide it, with the specified authority’s approval — failure to do so on a specific request is a natural-justice ground.
Does a pending writ petition on jurisdiction stop the reassessment clock?
Where the Supreme Court’s interim order applies, assessment/reassessment proceedings pursuant to the notices in that batch remain stayed on the terms set by the relevant High Court — but this protection is specific to the matters covered by that order and should not be assumed to extend automatically to every pending file without checking.
What happens if the client already filed an updated return for the year under a 148A notice?
This needs to be checked carefully against the current updated-return timeline restrictions, since recent changes limit the ability to file an updated return once a defined period has passed after a 148A notice — get the sequencing right before advising on this route.