The AO has issued a s.148A notice on crypto exchange data showing Rs 4.65 crore of transactions. I have given my bank statements and my return — is that enough to stop the s.148 notice?
No, not on these facts. The Court held that bank statements alone do not verify what the crypto transactions were, that the assessee ought to have produced the crypto currency ledger, and that the officer's brief consideration of the reply satisfied s.148A. The writ against the s.148 notice failed, with liberty to produce the ledger in the reassessment itself.
Decided by the High Court (Rajasthan High Court, Division Bench of Justice Manindra Mohan Shrivastava and Justice Shubha Mehta) on 2022-07-12, reported as [2023] 146 taxmann.com 514 (Raj.)(HC); 2022 LiveLaw (Raj) 233; D.B. Civil Writ Petition No. 7352 of 2022; AY 2018-19. It bears on section 148A, section 148A(b), section 148A(d), section 148, section 147 of the Income Tax Act 1961, in Crypto & Virtual Digital Assets and Reassessment & Reopening matters.
This is the shape of most crypto notices now: the department has a consideration figure from an exchange or a CRIU/VRU feed, the assessee answers with bank entries and says the figure is turnover and not income, and the officer records that the reply does not explain it. The decision says that answer is not enough at the s.148A stage — what answers a volume figure is the trade ledger that reconciles it. It also shows the limited reach of a writ: the Court would not weigh the explanation, only whether the s.148A exercise was gone through.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For assessment year 2018-19 the assessee filed a return declaring total income of Rs 5,46,500. Higher-risk CRIU/VRU information flagged by the Directorate of Income-tax (Systems) and received on the insight portal indicated that investment of Rs 4,65,72,546 had been made towards the purchase of crypto currency, the source of which was not verified. A notice under s.148A(b) was issued on 19 March 2022. The assessee replied that the figure reflected the volume of transactions in the course of trade in crypto currency and not an investment, and filed his return acknowledgment, a bank statement showing transfers made in exchange for crypto currency, and a computation of income. The Assessing Officer was not satisfied because the assertion was unsupported by documentary evidence, and on 31 March 2022 passed an order under s.148A(d) leading to a notice under s.148. The assessee challenged the s.148A(d) order by writ petition under Article 226. The judgment records at para 7 that the s.148 notice itself was not challenged.
The writ petition was dismissed, but on a narrow basis and subject to an express liberty. The Court held that the purpose of the enquiry under s.148A is to find out whether there is material suggesting that income chargeable to tax has escaped assessment, and that the opinion must be based on material on record (paras 12 and 13). Bank transactions alone were not enough to verify a trade in crypto currency; the assessee ought to have produced the relevant ledger statement, and had not produced it even in the writ petition (paras 14 and 15). Whether the Rs 4,65,72,546 was trading volume or an investment without withdrawal was something that could only be decided on the crypto currency ledger (para 15). Because the officer had considered the reply, however briefly, and only for the purpose of deciding whether s.148 proceedings should be drawn, the exercise met the requirement of s.148A (para 17). The Court expressly held it remained open to the assessee to satisfy the authority by producing the ledger (para 18), was 'not inclined to interfere' since the order was neither perverse nor without jurisdiction (para 19), and dismissed the petition 'subject to the liberty which has been granted to the petitioner to submit appropriate documentary evidence in support of information in section 148 proceedings' (para 20). Nothing was decided about whether the sum was income.
The Court read the scheme of s.148A: before a s.148 notice the competent authority must conduct an enquiry after affording an opportunity of hearing, and under clause (d) must decide, on the material on record including the assessee's reply, whether it is a fit case to issue the notice (para 11). Clause (b) requires only that the information suggest escapement, so the enquiry is directed at finding whether such material exists, not at concluding the question (para 12). Measured against that, the officer's order recorded a finding that the material evidence to verify the crypto currency transaction was not on record (para 13), and the assessee had not produced the ledger even before the High Court (para 14). The Court accepted the revenue's submission that bank transactions alone cannot verify a trade in crypto currency and that only the ledger could show whether the figure was volume or investment (para 15), which explained the officer's view that the information remained unverified (para 16). It concluded that the reply had been considered, in brief and for the limited purpose of deciding whether to draw s.148 proceedings, and that this satisfied s.148A (para 17), while preserving the assessee's right to produce the ledger in the reassessment (para 18).
However, we find that the authority has considered, though in brief, the reply of the petitioner at this stage only for the purpose of deciding whether proceedings under section 148 of the Income-tax Act, 1961 should be drawn. In our considered opinion, the exercise which has been undertaken by the authority fulfilled the legal requirement of section 148(A) of the Act, 1961.
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Handle my notice → Ask a CA on WhatsAppNo, not on these facts. The Court held that bank statements alone do not verify what the crypto transactions were, that the assessee ought to have produced the crypto currency ledger, and that the officer's brief consideration of the reply satisfied s.148A. The writ against the s.148 notice failed, with liberty to produce the ledger in the reassessment itself. This was decided by the High Court (Rajasthan High Court, Division Bench of Justice Manindra Mohan Shrivastava and Justice Shubha Mehta) and bears on section 148A, section 148A(b), section 148A(d), section 148, section 147 of the Income Tax Act 1961. It is reported as [2023] 146 taxmann.com 514 (Raj.)(HC); 2022 LiveLaw (Raj) 233; D.B. Civil Writ Petition No. 7352 of 2022; AY 2018-19. This is the shape of most crypto notices now: the department has a consideration figure from an exchange or a CRIU/VRU feed, the assessee answers with bank entries and says the figure is turnover and not income, and the officer records that the reply does not explain it. The decision says that answer is not enough at the s.148A stage — what answers a volume figure is the trade ledger that reconciles it. It also shows the limited reach of a writ: the Court would not weigh the explanation, only whether the s.148A exercise was gone through. If it applies to you, the first step is this: Answer a s.148A(b) notice on crypto with the exchange trade ledger and wallet statement for the year, not with bank entries alone.
For assessment year 2018-19 the assessee filed a return declaring total income of Rs 5,46,500. Higher-risk CRIU/VRU information flagged by the Directorate of Income-tax (Systems) and received on the insight portal indicated that investment of Rs 4,65,72,546 had been made towards the purchase of crypto currency, the source of which was not verified. A notice under s.148A(b) was issued on 19 March 2022. The assessee replied that the figure reflected the volume of transactions in the course of trade in crypto currency and not an investment, and filed his return acknowledgment, a bank statement showing transfers made in exchange for crypto currency, and a computation of income. The Assessing Officer was not satisfied because the assertion was unsupported by documentary evidence, and on 31 March 2022 passed an order under s.148A(d) leading to a notice under s.148. The assessee challenged the s.148A(d) order by writ petition under Article 226. The judgment records at para 7 that the s.148 notice itself was not challenged. The matter was decided on 2022-07-12 by the High Court (Rajasthan High Court, Division Bench of Justice Manindra Mohan Shrivastava and Justice Shubha Mehta). On those facts the High Court held as follows. The writ petition was dismissed, but on a narrow basis and subject to an express liberty. The Court held that the purpose of the enquiry under s.148A is to find out whether there is material suggesting that income chargeable to tax has escaped assessment, and that the opinion must be based on material on record (paras 12 and 13). Bank transactions alone were not enough to verify a trade in crypto currency; the assessee ought to have produced the relevant ledger statement, and had not produced it even in the writ petition (paras 14 and 15). Whether the Rs 4,65,72,546 was trading volume or an investment without withdrawal was something that could only be decided on the crypto currency ledger (para 15). Because the officer had considered the reply, however briefly, and only for the purpose of deciding whether s.148 proceedings should be drawn, the exercise met the requirement of s.148A (para 17). The Court expressly held it remained open to the assessee to satisfy the authority by producing the ledger (para 18), was 'not inclined to interfere' since the order was neither perverse nor without jurisdiction (para 19), and dismissed the petition 'subject to the liberty which has been granted to the petitioner to submit appropriate documentary evidence in support of information in section 148 proceedings' (para 20). Nothing was decided about whether the sum was income.
The Court read the scheme of s.148A: before a s.148 notice the competent authority must conduct an enquiry after affording an opportunity of hearing, and under clause (d) must decide, on the material on record including the assessee's reply, whether it is a fit case to issue the notice (para 11). Clause (b) requires only that the information suggest escapement, so the enquiry is directed at finding whether such material exists, not at concluding the question (para 12). Measured against that, the officer's order recorded a finding that the material evidence to verify the crypto currency transaction was not on record (para 13), and the assessee had not produced the ledger even before the High Court (para 14). The Court accepted the revenue's submission that bank transactions alone cannot verify a trade in crypto currency and that only the ledger could show whether the figure was volume or investment (para 15), which explained the officer's view that the information remained unverified (para 16). It concluded that the reply had been considered, in brief and for the limited purpose of deciding whether to draw s.148 proceedings, and that this satisfied s.148A (para 17), while preserving the assessee's right to produce the ledger in the reassessment (para 18). In the words reproduced by the source cited on this page: "However, we find that the authority has considered, though in brief, the reply of the petitioner at this stage only for the purpose of deciding whether proceedings under section 148 of the Income-tax Act, 1961 should be drawn. In our considered opinion, the exercise which has been undertaken by the authority fulfilled the legal requirement of section 148(A) of the Act, 1961."
It was decided by the High Court on 2022-07-12 and is reported as [2023] 146 taxmann.com 514 (Raj.)(HC); 2022 LiveLaw (Raj) 233; D.B. Civil Writ Petition No. 7352 of 2022; AY 2018-19. 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 148A(b), section 148A(d), section 148, section 147, 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 writ petition was dismissed, but on a narrow basis and subject to an express liberty. The Court held that the purpose of the enquiry under s.148A is to find out whether there is material suggesting that income chargeable to tax has escaped assessment, and that the opinion must be based on material on record (paras 12 and 13). Bank transactions alone were not enough to verify a trade in crypto currency; the assessee ought to have produced the relevant ledger statement, and had not produced it even in the writ petition (paras 14 and 15). Whether the Rs 4,65,72,546 was trading volume or an investment without withdrawal was something that could only be decided on the crypto currency ledger (para 15). Because the officer had considered the reply, however briefly, and only for the purpose of deciding whether s.148 proceedings should be drawn, the exercise met the requirement of s.148A (para 17). The Court expressly held it remained open to the assessee to satisfy the authority by producing the ledger (para 18), was 'not inclined to interfere' since the order was neither perverse nor without jurisdiction (para 19), and dismissed the petition 'subject to the liberty which has been granted to the petitioner to submit appropriate documentary evidence in support of information in section 148 proceedings' (para 20). Nothing was decided about whether the sum was income. It arises in Crypto & Virtual Digital Assets and Reassessment & Reopening matters, on section 148A, section 148A(b), section 148A(d), section 148, section 147 of the Income Tax Act 1961, and was decided by Rajasthan High Court, Division Bench of Justice Manindra Mohan Shrivastava and Justice Shubha Mehta. 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. Reconcile the department's figure line by line and show on the face of the reply which part is gross consideration and which part is gain. Where the ledger is not available before the reply deadline, put the request to the exchange on record and ask for time, so that the s.148A(d) order cannot record an unexplained silence. Do not expect a writ to test the merits of the explanation — plan to run the reconciliation in the reassessment, which is the liberty this Court left open.
Superseded by amendment. The decision turns on the sufficiency of the enquiry under clause (a) and the adequacy of the order under clause (d) of s.148A as that section stood for a notice issued in March 2022. That statutory framework no longer stands. The database's own indexing of later reassessment decisions treats s.148A of the Income-tax Act, 1961, read with ss.148 and 147, as corresponding to s.281 read with ss.280 and 279 of the Income-tax Act, 2025 - see the indexing line to Hina Prakash Shah v. ITO [2026] 187 taxmann.com 401 / (2026) 311 Taxman 269 (Guj.), 9 June 2026. The detailed clause-by-clause comparison of the pre- and post-2024 text that this note previously carried came from a commentary article and could not be checked against the bare Act in the database, so it has been removed rather than repeated. Use the decision for a reassessment governed by s.148A as it stood at the relevant time, and say so when citing it. No later decision applying, following or doubting this judgment was traced. 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.
This is a decision at the s.148A stage and nothing more. It holds that the officer's exercise was legally sufficient; it does not hold that the Rs 4,65,72,546 was income, and it dismissed the petition expressly subject to liberty to produce the crypto currency ledger in the s.148 proceedings. The judgment records that the s.148 notice itself was not challenged, so the writ was directed only at the s.148A(d) order of 31 March 2022. The practical point the case is worth citing for is evidentiary rather than jurisdictional: a bank statement showing transfers to and from an exchange does not, by itself, establish that a gross figure is trading volume rather than investment, and the Court treated the exchange ledger as the document that could. The assessment year is 2018-19, before the virtual digital asset regime, so nothing turns on s.115BBH or s.194S. The judgment is reported at [2023] 146 taxmann.com 514 (Raj.). The judgment does not reproduce the s.148A(d) order, so what exactly the officer recorded about the reply is known only from the Court's summary of it. The outcome of the reassessment is not reported. Nothing in the decision tells you how much of a gross exchange figure is assessable, only that the ledger is the document the department expects to see, and nothing in it addresses how such a figure would be computed or charged. 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 writ petition was dismissed, but on a narrow basis and subject to an express liberty. The Court held that the purpose of the enquiry under s.148A is to find out whether there is material suggesting that income chargeable to tax has escaped assessment, and that the opinion must be based on material on record (paras 12 and 13). Bank transactions alone were not enough to verify a trade in crypto currency; the assessee ought to have produced the relevant ledger statement, and had not produced it even in the writ petition (paras 14 and 15). Whether the Rs 4,65,72,546 was trading volume or an investment without withdrawal was something that could only be decided on the crypto currency ledger (para 15). Because the officer had considered the reply, however briefly, and only for the purpose of deciding whether s.148 proceedings should be drawn, the exercise met the requirement of s.148A (para 17). The Court expressly held it remained open to the assessee to satisfy the authority by producing the ledger (para 18), was 'not inclined to interfere' since the order was neither perverse nor without jurisdiction (para 19), and dismissed the petition 'subject to the liberty which has been granted to the petitioner to submit appropriate documentary evidence in support of information in section 148 proceedings' (para 20). Nothing was decided about whether the sum was income.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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