The section 148A order does not say the information came from the Risk Management Strategy or an audit objection. Does that make the reassessment bad for want of jurisdiction?
No. The Madras High Court held that the Risk Management Strategy is merely a phrase for an evolving departmental strategy covering all the sources from which information may be collated, and no limitation should be placed on it. The Board's circulars of 10 and 13 December 2021 list many permissible sources, and the Court held there can be no fetters on an Assessing Officer's power to gather information on which reassessment may be initiated. Here the officer had referred to information from the Director of Income Tax (Investigation and Criminal Intelligence), which sufficed for section 148A. The Rs 50 lakh condition in section 149(1)(b) was satisfied on the sale of 19 plots for Rs 1,50,25,585, and sanction under section 151 had been obtained. The petition was dismissed.
Decided by the High Court (High Court of Judicature at Madras; Dr Anita Sumanth J) on 2022-08-23, reported as W.P. No. 21528 of 2022 with WMP Nos. 20547 and 20548 of 2022, Madras High Court. It bears on section 148A, section 149(1)(b), section 148, section 151, section 147, section 50C of the Income Tax Act 1961, in Reassessment & Reopening matters.
After Union of India v Ashish Agarwal turned some ninety thousand old section 148 notices into show cause notices under section 148A(b), the standard challenge became that the information relied on does not answer the definition in the Explanation to section 148A. This order is the answer a taxpayer is likely to meet in Tamil Nadu. It reads the Risk Management Strategy through the two Board circulars, one issued under section 119 on uploading information to the Verification Report Upload functionality on the Insight portal, the other defining the strategy under the e-Verification Scheme, 2021 as an algorithm for standardised examination of information using technological tools including artificial intelligence and machine learning. On that reading, information from any income-tax authority including the officer himself, from search or survey, from another agency, from FT and TR references or from a court or appellate order all qualify. It also shows that the section 149(1)(b) threshold is tested prima facie at this stage on the aggregate value the information discloses.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner, an individual, had filed no return of income for assessment year 2016-17. He received a notice under section 148 dated 1 April 2021 alleging escapement, and challenged it in W.P. No. 19045 of 2021 on the ground that a notice issued after 1 April 2021 for an earlier year had to follow the new scheme in section 148A. That petition was allowed on 4 February 2022 and the notice quashed. The Revenue's appeals against similar orders across the country were allowed by the Supreme Court in Union of India v Ashish Agarwal, (2022) 444 ITR 1, decided on 4 May 2022, which deemed such notices to be show cause notices under section 148A(b), dispensed as a one-time measure with any enquiry under section 148A(a), directed the officers to supply the information and material relied on within thirty days and to pass orders under section 148A(d), and preserved all defences including those under section 149. Following that, the reasons were communicated to the petitioner on 26 May 2022 in compliance with the Board's Instruction No. 1/2022 dated 11 May 2022. They stated that the petitioner had converted his land into 40 plots named Annai Vinnarasi Nagar; that in the financial year relevant to assessment year 2016-17 he sold two plots for stated considerations of Rs 1,00,000 and Rs 2,00,000 against guideline values of Rs 3,60,489 and Rs 5,37,328, attracting section 50C; and that the encumbrance certificate showed the sale of 19 plots during financial year 2015-16 for a total of Rs 1,50,25,585, on which no long-term capital gain had been offered as no return had been filed. A notice under section 148A(b) followed on 7 July 2022. The petitioner objected that the information did not answer the description in the Explanation to section 148A, being neither from the Risk Management Strategy nor from an audit objection, and that the condition in section 149(1)(b) for reopening beyond three years was not met. The objections were rejected and an order under section 148A(d) and a notice under section 148 dated 30 July 2022 followed, which he challenged.
The challenge to jurisdiction was rejected and the writ petition was dismissed with no costs, the reassessment to proceed on the merits in accordance with law. On the first objection, the Court held that there can be no fetters on the powers of an Assessing Authority to gather information on the basis of which reassessment may be initiated, and found no merit in the contention that the information available with the officer was vague, non-specific or unrelated to the Risk Management Strategy. It held that the term is merely a phrase connoting an evolving strategy developed by the department to cover all resources from which information may be collated, and that no limitation should be placed on that concept; the officer had in the reasons clearly referred to information received from the Director of Income Tax (Investigation and Criminal Intelligence), and for the purposes of section 148A that sufficed. On the second objection, the Court held that prima facie the condition in section 149(1)(b) was satisfied, since the income chargeable to tax represented in the form of the property transferred was Rs 1,50,25,585, far in excess of the required Rs 50,00,000. On the third, that sanction under section 151 was absent, the Court found on a perusal of the section 148 notice dated 30 July 2022 that sanction had duly been obtained from the Principal Commissioner, and no infirmity in it was pointed out.
The Court approached the first objection through the Board's own material. The circular of 10 December 2021, issued under section 119, concerns the uploading of information on the Verification Report Upload functionality on the Insight portal for the issue of notices under section 148, and its paragraph 3 lists the categories of information the officers are to identify for effective implementation of the risk management strategy: information from another Government or law enforcement agency, information arising out of internal audit objection, information received from any income-tax authority including the officer himself, information arising out of search or survey, information from FT and TR references, information arising out of an order of a court, an appellate order, an order of the NCLT or an order under section 263 or 264 having an impact on income, and cases involving additions on recurring issues above stated monetary limits. The circular of 13 December 2021 defines risk management strategy under the e-Verification Scheme, 2021 as an algorithm for standardised examination of information using suitable technological tools, including artificial intelligence and machine learning, to reduce the scope of risk, as decided by the Board from time to time. Reading the two together, the Court concluded that the sources of information cannot be confined and that the phrase is to be understood expansively. It drew support from Pooran Mal v Director of Inspection (Investigation), (1974) 93 ITR 505, where the Supreme Court accepted that material obtained in a search that might itself not conform to the parameters of a legally conducted search would still qualify as information usable in assessment. It acknowledged that section 148A itself does not contain so expanded a description of sources, but noted that the department has created a designated post of Director of Income Tax (Investigation and Criminal Intelligence) with a team to locate instances of evasion, and that the reasons referred to information from that source. On the threshold in section 149(1)(b) the Court simply measured the figure in the information, Rs 1,50,25,585, against the statutory Rs 50,00,000, and on sanction it looked at the notice and found the approval of the Principal Commissioner on it.
The term 'Risk Management Strategy' is merely a phrase connoting an evolving strategy developed by the Income Tax Department to address and cover all resources from where information may be collated
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Handle my notice → Ask a CA on WhatsAppNo. The Madras High Court held that the Risk Management Strategy is merely a phrase for an evolving departmental strategy covering all the sources from which information may be collated, and no limitation should be placed on it. The Board's circulars of 10 and 13 December 2021 list many permissible sources, and the Court held there can be no fetters on an Assessing Officer's power to gather information on which reassessment may be initiated. Here the officer had referred to information from the Director of Income Tax (Investigation and Criminal Intelligence), which sufficed for section 148A. The Rs 50 lakh condition in section 149(1)(b) was satisfied on the sale of 19 plots for Rs 1,50,25,585, and sanction under section 151 had been obtained. The petition was dismissed. This was decided by the High Court (High Court of Judicature at Madras; Dr Anita Sumanth J) and bears on section 148A, section 149(1)(b), section 148, section 151, section 147, section 50C of the Income Tax Act 1961. It is reported as W.P. No. 21528 of 2022 with WMP Nos. 20547 and 20548 of 2022, Madras High Court. After Union of India v Ashish Agarwal turned some ninety thousand old section 148 notices into show cause notices under section 148A(b), the standard challenge became that the information relied on does not answer the definition in the Explanation to section 148A. This order is the answer a taxpayer is likely to meet in Tamil Nadu. It reads the Risk Management Strategy through the two Board circulars, one issued under section 119 on uploading information to the Verification Report Upload functionality on the Insight portal, the other defining the strategy under the e-Verification Scheme, 2021 as an algorithm for standardised examination of information using technological tools including artificial intelligence and machine learning. On that reading, information from any income-tax authority including the officer himself, from search or survey, from another agency, from FT and TR references or from a court or appellate order all qualify. It also shows that the section 149(1)(b) threshold is tested prima facie at this stage on the aggregate value the information discloses. If it applies to you, the first step is this: Do not build the writ on the absence of the words 'Risk Management Strategy' in the order; identify instead what the information actually is and attack its sufficiency or its relevance to your year.
The petitioner, an individual, had filed no return of income for assessment year 2016-17. He received a notice under section 148 dated 1 April 2021 alleging escapement, and challenged it in W.P. No. 19045 of 2021 on the ground that a notice issued after 1 April 2021 for an earlier year had to follow the new scheme in section 148A. That petition was allowed on 4 February 2022 and the notice quashed. The Revenue's appeals against similar orders across the country were allowed by the Supreme Court in Union of India v Ashish Agarwal, (2022) 444 ITR 1, decided on 4 May 2022, which deemed such notices to be show cause notices under section 148A(b), dispensed as a one-time measure with any enquiry under section 148A(a), directed the officers to supply the information and material relied on within thirty days and to pass orders under section 148A(d), and preserved all defences including those under section 149. Following that, the reasons were communicated to the petitioner on 26 May 2022 in compliance with the Board's Instruction No. 1/2022 dated 11 May 2022. They stated that the petitioner had converted his land into 40 plots named Annai Vinnarasi Nagar; that in the financial year relevant to assessment year 2016-17 he sold two plots for stated considerations of Rs 1,00,000 and Rs 2,00,000 against guideline values of Rs 3,60,489 and Rs 5,37,328, attracting section 50C; and that the encumbrance certificate showed the sale of 19 plots during financial year 2015-16 for a total of Rs 1,50,25,585, on which no long-term capital gain had been offered as no return had been filed. A notice under section 148A(b) followed on 7 July 2022. The petitioner objected that the information did not answer the description in the Explanation to section 148A, being neither from the Risk Management Strategy nor from an audit objection, and that the condition in section 149(1)(b) for reopening beyond three years was not met. The objections were rejected and an order under section 148A(d) and a notice under section 148 dated 30 July 2022 followed, which he challenged. The matter was decided on 2022-08-23 by the High Court (High Court of Judicature at Madras; Dr Anita Sumanth J). On those facts the High Court held as follows. The challenge to jurisdiction was rejected and the writ petition was dismissed with no costs, the reassessment to proceed on the merits in accordance with law. On the first objection, the Court held that there can be no fetters on the powers of an Assessing Authority to gather information on the basis of which reassessment may be initiated, and found no merit in the contention that the information available with the officer was vague, non-specific or unrelated to the Risk Management Strategy. It held that the term is merely a phrase connoting an evolving strategy developed by the department to cover all resources from which information may be collated, and that no limitation should be placed on that concept; the officer had in the reasons clearly referred to information received from the Director of Income Tax (Investigation and Criminal Intelligence), and for the purposes of section 148A that sufficed. On the second objection, the Court held that prima facie the condition in section 149(1)(b) was satisfied, since the income chargeable to tax represented in the form of the property transferred was Rs 1,50,25,585, far in excess of the required Rs 50,00,000. On the third, that sanction under section 151 was absent, the Court found on a perusal of the section 148 notice dated 30 July 2022 that sanction had duly been obtained from the Principal Commissioner, and no infirmity in it was pointed out.
The Court approached the first objection through the Board's own material. The circular of 10 December 2021, issued under section 119, concerns the uploading of information on the Verification Report Upload functionality on the Insight portal for the issue of notices under section 148, and its paragraph 3 lists the categories of information the officers are to identify for effective implementation of the risk management strategy: information from another Government or law enforcement agency, information arising out of internal audit objection, information received from any income-tax authority including the officer himself, information arising out of search or survey, information from FT and TR references, information arising out of an order of a court, an appellate order, an order of the NCLT or an order under section 263 or 264 having an impact on income, and cases involving additions on recurring issues above stated monetary limits. The circular of 13 December 2021 defines risk management strategy under the e-Verification Scheme, 2021 as an algorithm for standardised examination of information using suitable technological tools, including artificial intelligence and machine learning, to reduce the scope of risk, as decided by the Board from time to time. Reading the two together, the Court concluded that the sources of information cannot be confined and that the phrase is to be understood expansively. It drew support from Pooran Mal v Director of Inspection (Investigation), (1974) 93 ITR 505, where the Supreme Court accepted that material obtained in a search that might itself not conform to the parameters of a legally conducted search would still qualify as information usable in assessment. It acknowledged that section 148A itself does not contain so expanded a description of sources, but noted that the department has created a designated post of Director of Income Tax (Investigation and Criminal Intelligence) with a team to locate instances of evasion, and that the reasons referred to information from that source. On the threshold in section 149(1)(b) the Court simply measured the figure in the information, Rs 1,50,25,585, against the statutory Rs 50,00,000, and on sanction it looked at the notice and found the approval of the Principal Commissioner on it. In the words reproduced by the source cited on this page: "The term 'Risk Management Strategy' is merely a phrase connoting an evolving strategy developed by the Income Tax Department to address and cover all resources from where information may be collated"
It was decided by the High Court on 2022-08-23 and is reported as W.P. No. 21528 of 2022 with WMP Nos. 20547 and 20548 of 2022, Madras High Court. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 148A, section 149(1)(b), section 148, section 151, section 147, section 50C, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The challenge to jurisdiction was rejected and the writ petition was dismissed with no costs, the reassessment to proceed on the merits in accordance with law. On the first objection, the Court held that there can be no fetters on the powers of an Assessing Authority to gather information on the basis of which reassessment may be initiated, and found no merit in the contention that the information available with the officer was vague, non-specific or unrelated to the Risk Management Strategy. It held that the term is merely a phrase connoting an evolving strategy developed by the department to cover all resources from which information may be collated, and that no limitation should be placed on that concept; the officer had in the reasons clearly referred to information received from the Director of Income Tax (Investigation and Criminal Intelligence), and for the purposes of section 148A that sufficed. On the second objection, the Court held that prima facie the condition in section 149(1)(b) was satisfied, since the income chargeable to tax represented in the form of the property transferred was Rs 1,50,25,585, far in excess of the required Rs 50,00,000. On the third, that sanction under section 151 was absent, the Court found on a perusal of the section 148 notice dated 30 July 2022 that sanction had duly been obtained from the Principal Commissioner, and no infirmity in it was pointed out. It arises in Reassessment & Reopening matters, on section 148A, section 149(1)(b), section 148, section 151, section 147, section 50C of the Income Tax Act 1961, and was decided by High Court of Judicature at Madras; Dr Anita Sumanth J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Test the section 149(1)(b) threshold against the aggregate the officer has identified, and be ready for the Court to look at it only prima facie at the section 148A stage. Check the section 148 notice itself for the sanction, as the Court did here, and point to a specific infirmity in it rather than asserting that no sanction was accorded. Where the reassessment follows an old section 148 notice revived by Ashish Agarwal, keep the section 149 defences alive for the assessment, since the Supreme Court's directions expressly preserved them.
Still good law. A speaking order of a single judge dated 23 August 2022, applying Union of India v Ashish Agarwal, (2022) 444 ITR 1, and the Board's circulars of 10 and 13 December 2021 to section 148A as substituted by the Finance Act, 2021. The source page records no case citing it. It construes the Explanation to section 148A as it then stood; that Explanation has since been altered by later Finance Acts, which was not examined in this session, nor was any appeal against this order checked. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order carries two internal inconsistencies. The prayer and paragraph 8 put the order under section 148A(d) on 30 July 2022, while paragraph 10 records that the objections were rejected by the impugned order dated 13 July 2022, and the text does not reconcile the dates. Paragraph 20 describes the plots sold as movable property, when what was transferred was land. The Court cites Pooran Mal at 94 ITR 505, which was not independently verified in this session. The order does not set out the Explanation to section 148A that it was construing, so the reader cannot see against what text the Risk Management Strategy argument was measured. It does not deal with the fact that the earlier notice of 1 April 2021 had been quashed and was revived only by the Supreme Court's directions, or with whether the aggregate of Rs 1,50,25,585 represents escaped income as against gross consideration for the purposes of section 149(1)(b), the finding on that point being expressly prima facie. The batch line gave the sections as 148A, 148, 149(1)(b) and 151, which matches; sections 147 and 50C appear in the information relied on. The reassessment order itself, made after this decision, is not before the Court and its outcome is unknown. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The challenge to jurisdiction was rejected and the writ petition was dismissed with no costs, the reassessment to proceed on the merits in accordance with law. On the first objection, the Court held that there can be no fetters on the powers of an Assessing Authority to gather information on the basis of which reassessment may be initiated, and found no merit in the contention that the information available with the officer was vague, non-specific or unrelated to the Risk Management Strategy. It held that the term is merely a phrase connoting an evolving strategy developed by the department to cover all resources from which information may be collated, and that no limitation should be placed on that concept; the officer had in the reasons clearly referred to information received from the Director of Income Tax (Investigation and Criminal Intelligence), and for the purposes of section 148A that sufficed. On the second objection, the Court held that prima facie the condition in section 149(1)(b) was satisfied, since the income chargeable to tax represented in the form of the property transferred was Rs 1,50,25,585, far in excess of the required Rs 50,00,000. On the third, that sanction under section 151 was absent, the Court found on a perusal of the section 148 notice dated 30 July 2022 that sanction had duly been obtained from the Principal Commissioner, and no infirmity in it was pointed out.
TaxSphere, “Susai Amalanathan Antoni Vincent v Income Tax Officer”, https://taxnotice.vittsphere.com/caselaw/case/antoni-vincent-v-ito-risk-management-strategy-148a/ (validity last checked 2026-08-29)
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