Covers s.148, s.147, s.148A, s.149, s.151, s.143(1), s.143(3), s.151A and 19 more. 75 entries, strongest first, with what each one decided in a sentence. Read down the list, then open the entry that fits your facts. The Reassessment & Reopening hub cross-lists everything that touches this area, including entries filed under another subject.
My company is a member of an AOP and takes 35% of the AOP's gross sale proceeds under the AOP deed. We showed it as an exempt share of the AOP's profit. After a survey the AO reopened two years and now says it is revenue. Can he reopen, and is the money taxable in my hands? No on the reopening challenge and no on the exemption. Where the assessment order shows the Assessing Officer never applied his mind to the character of the receipt at all, there is no opinion to change, and material coming out of a s.133A survey that reveals the true nature of the receipt is tangible material for s.147. On the merits the Court read Clause 7 of the AOP deed itself and held that a member's entitlement to 35% of gross sale proceeds, taken upfront and untouched by the AOP's expenses, is not a share of profit but a diversion of the AOP's receipts by overriding title, taxable in the member's hands as a business receipt. Two Revenue appeals were allowed and the assessee's appeal dismissed.
The High Court quashed my s.148 notice because the ward officer issued it instead of the faceless unit. Does that judgment still stand? No, not as it stands. On 10 April 2026 the Supreme Court set aside the High Court judgments that had quashed notices issued by the jurisdictional Assessing Officer, because s.147A, inserted by the Finance Act 2026 with effect from 1 April 2021, now defines the Assessing Officer for ss.148 and 148A as an officer other than the National Faceless Assessment Centre and the assessment units in s.144B(3). The Court remitted the matters, left the validity, scope, effect, retrospectivity and applicability of s.147A open for the High Courts, and stayed further assessment and reassessment proceedings in the meantime.
Your notice was issued in the 1 April to 30 June 2021 window. Was it saved by TOLA, or is it dead? Saved, but only within limits. TOLA extends the time limit for issuing the reassessment notice and for the sanction under s.151. It does not extend anything else, and every other defence survives — including the surviving-period computation for your own assessment year.
You filed without books because they were seized. Is that a failure to disclose? Not where the primary facts were disclosed some other way. The duty to disclose does not extend beyond primary facts; once they are disclosed, the burden shifts to the officer to draw the right inferences. The reassessments were quashed.
The High Court threw out my writ petition against a section 148 notice saying I had an alternative remedy. Was it right to refuse to hear me at all? Not on that reasoning. The Supreme Court set aside the Punjab and Haryana High Court's observation that a writ petition against a reassessment notice is not maintainable because of the alternative remedy. It said the observation did not take into account several judgments of the Supreme Court on the High Court's jurisdiction, writ petitions having been entertained to examine whether the jurisdictional pre-conditions for a section 148 notice are satisfied, and that the reopening provisions as amended by the Finance Act 2021 need deeper consideration in the light of the earlier case law. The special leave petition was disposed of without any finding on the merits.
What happened to the thousands of s.148 notices issued under the old rules after the law changed in 2021? Reported as treating those notices as s.148A(b) show-cause notices instead of quashing them, with directions on how they were to proceed.
Another company declared the cash it put into my share capital under the Income Declaration Scheme. Does that stop the Department reopening my assessment on the same share money? No. The Supreme Court set aside the Gujarat High Court's order quashing a section 148 notice and allowed the assessing officer to complete the reassessment. The immunity in section 192 of the Finance Act 2016 runs to the declarant alone and only for limited purposes; a declaration by Garg Logistics could not immunise the assessee, a non-declarant. The reopening was in any case based on material seized in the search on an accommodation entry provider and correlated with the assessee's Registrar of Companies filings, not on the declaration. Where there is objective tangible material, the sufficiency of that material cannot dictate the validity of the notice.
Reopening beyond four years — how much are you actually required to have disclosed? The primary facts, and no more. Disclosure of secondary facts is not required. But if the department wants to use an extended limitation window, it must say so in the notice or the reasons.
What actually counts as a 'change of opinion'? Formulating an opinion and then changing it. To constitute a change of opinion the earlier assessment must, expressly or by necessary implication, have expressed a view on the subject now being reopened.
Is 'Yes, I am satisfied' enough for the sanctioning authority to write? No. Recorded that way, the satisfaction is mechanical and shows no sign that the officer's reasons were examined. The s.148 notices were held unsustainable and the department's SLP was dismissed.
My return was only processed under section 143(1) and now the officer wants to reopen it. Can I say he is changing his opinion? No. The Supreme Court held that where a return is accepted under section 143(1), no assessment order is made and no opinion is formed, so the change of opinion objection simply does not arise. The point was held to be squarely covered by Rajesh Jhaveri Stock Brokers. The Bombay High Court had quashed the reopening notice without addressing this contention at all, and its judgment was set aside. The Tribunal's order, which had merely followed the High Court, went with it, and the appeal was remitted to the Tribunal to be decided on merits.
The only thing behind my reopening notice is the Valuation Officer's report. Is that enough? No. The Supreme Court held that the opinion of the Valuation Officer is not by itself information on which an assessment can be reopened. The officer has to apply his mind to whatever material he has collected and form his own belief; adopting the valuer's figure is not that.
The officer looked at this exact issue in the original assessment and now wants to look again. Can he? No. Reopening needs tangible material. A mere change of opinion is not a ground, and where a s.143(3) assessment was made the officer is presumed to have applied his mind — so re-examining the same material is review, which the Act does not permit.
You get a s.148 notice. Can you ask why — and must the officer answer? Yes. Ask for the reasons in writing. The officer has to give them, and then has to deal with your objections in a reasoned order before going ahead with the reassessment.
The department says the court will not look at whether its reasons are any good. Is that really the test at the reopening stage? Largely yes. When the validity of the initiation of reassessment is under challenge, the court asks only whether there was prima facie some material on which the department could reopen. Whether that material is sufficient or correct is not examined at that stage; it is argued in the reassessment. The appeals were dismissed and the reopening was upheld.
The officer reopened my assessment the day after he got a letter from an investigation wing. Is a letter like that 'information' enough to reopen? Yes, on these facts. The Supreme Court held that a letter from the Deputy Director of Inspection, enclosing financial data on the company extracted from the Bombay Stock Exchange Directory, was definite information on which the Income-tax Officer could form the belief that income had escaped assessment. The data showed book value, earnings and dividends rising while the Calcutta quotations fell, which supported the inference that the quotations were manipulated and the real value of the shares was far higher than the sale price. Issuing the notice the next day, without further inquiry, did not show a failure to apply his mind. The High Court's orders quashing the notices were set aside.
I disclosed my hundi loans in the return and the officer accepted them. He now says the same lenders were bogus in the next year. Can he reopen? Yes. The Supreme Court held that a false disclosure is not a full and true disclosure. Whether a loan shown in the return is genuine is itself a material fact, not an inference to be drawn by the officer, so an assessee who records bogus loans has failed the duty section 147(a) imposes. That the officer could have investigated at the time, and did so in the following year, does not relieve the assessee of that duty. At the notice stage the enquiry is only whether reasonable grounds exist, not whether escapement is proved. The appeals were dismissed with costs.
I produced my books and a confirmation for the loan at the original assessment. The officer now says he has learnt the lender was a name lender. Can he reopen on that? Yes. The Supreme Court dismissed the assessee's appeal and upheld the reopening. Where specific, reliable and relevant information comes into the officer's possession after the assessment, exposing the falsity of what the assessee said, that is not a change of opinion or a fresh inference from the same material - it is acting on fresh information. Producing books and a confirmation letter for a transaction later shown to be bogus is not a true and full disclosure. The officer's failure to investigate the doubt during the original assessment does not take away his jurisdiction. Burlop Dealers was confined to its own facts.
Since the assessment is open again, can you use the reassessment to raise claims you missed the first time? No. Reassessment proceedings are for the benefit of the revenue. You cannot reopen matters concluded in the original assessment, or press claims you failed to make or which were rejected — that would turn the reassessment into an appeal in disguise.
My reassessment notice was posted on the last day of the limitation period but reached me three days later. Is it time barred? No. The Supreme Court allowed the Revenue's appeal and vacated the Gujarat High Court's order. Under the 1961 Act a clear distinction is made between issue of a notice and service of it. Section 149 says no notice under section 148 shall be issued after the limitation has lapsed, so once a notice is issued in time jurisdiction vests in the officer. Section 148(1) requires service before the order of assessment is made: the mandate is that reassessment shall not be made until there has been service. Service is therefore a condition precedent to the order, not to jurisdiction. Here the notice went by registered post on 31 March 1970, the last day, and that sufficed.
My assessment is being reopened because an internal audit party told the officer he applied the wrong head of income. Is an audit party's opinion on the law information for reopening? No. The Supreme Court held that the opinion of an internal audit party of the Income Tax Department on a point of law is not information within section 147(b). Law, for this purpose, must be created by a formal source - a competent legislature or a competent judicial or quasi-judicial authority - and an audit party performs administrative or executive functions with no power of judicial supervision over the officer's quasi-judicial acts. The part of an audit note that merely points to the law the officer overlooked is information; the part expressing the audit party's own opinion on how that law applies is not, and cannot be taken into account.
An appellate order in my firm's case said the officer is free to assess the amount in the partners' hands. Does that lift the limitation bar for assessing me? No. The Supreme Court held that the words finding and direction are limited in meaning. A finding must be one necessary for the disposal of the particular case, of the particular assessee and for the particular year, and directly involved in that disposal; an incidental finding will not do. A direction must be express, necessary for the disposal, and within the power of the authority making it. Saying the officer is free to take action leaves the matter to his discretion and is not a direction at all. Section 153(3)(ii) does not enlarge jurisdiction; it only raises the bar of limitation.
The Income-tax Officer allowed me too much depreciation because he worked it out from his own records and forgot the initial depreciation. Years later he wants to reopen. Is that my failure to disclose? No. The Supreme Court quashed notices under section 148 issued more than four years after the assessment years. The mistake was the Income-tax Officer's own: he had computed depreciation from departmental records and overlooked the ceiling that the aggregate of all depreciation cannot exceed original cost. The assessee's duty is to disclose the primary facts fully and truly; it does not extend to telling the officer what inference to draw or instructing him on the law. Nothing in the returns was shown to be incorrect. Without the omission or failure limb, the officer had no jurisdiction beyond four years.
How strong does the officer's material have to be before he can reopen? Strong enough to have a live link with the belief. Material that is vague, indefinite, distant or far-fetched will not do. The statute says reason to believe, not reason to suspect.
The Income-tax Officer found my undisclosed drafts during the original assessment, questioned my partner about them, and then did nothing. Can he reopen years later saying I failed to disclose them? No. The Supreme Court quashed the notice. The Income-tax Officer had himself discovered the drafts, put them to a partner of the firm, recorded in his best judgment assessment order that the money must belong to the firm, and then failed to bring the amounts to tax. Once he had all the primary facts it was for him to make the enquiries and draw the inferences. His failure to do so was plainly an oversight, and he could not use section 147(a) to remedy an error resulting from his own oversight. Section 143 was cited in the notice; the proceedings were quashed.
The recorded reasons for reopening my assessment say only that I am believed to have made secret profits and believed to have received a large sum. Is that reason to believe? No. The Supreme Court quashed the notices. The words reason to believe mean the belief of an honest and reasonable person on reasonable grounds; the officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. He acts without jurisdiction if the reason for his belief does not exist or is not material or relevant to the belief the section requires, and the court can always examine that, though it cannot investigate the sufficiency of the reasons. Here the recorded reasons stated no material fact at all - they were themselves expressed as beliefs, an obvious self-contradiction.
The sanctioning authority just wrote 'yes' and signed. Is that a sanction? No. The officer had set out no reason for concluding it was a fit case, and the Commissioner merely noted the word yes and signed beneath it. Neither s.147 nor s.151 was satisfied, so the officer had no jurisdiction.
I placed all my primary facts before the officer and he dropped the proceedings. Can a later officer reopen the assessment because he takes a different view of those same facts? No. The Supreme Court held that once the assessee has fully and truly disclosed the primary facts necessary for assessment, the officer cannot start reassessment on a change of opinion. He may have drawn a wrong legal inference from the disclosed facts, but that does not make him competent to reopen. The burden is also placed where it belongs: if failure to disclose is alleged, it is for the officer to establish it, not for the assessee to prove there was no concealment. The assessee owes no duty to instruct the officer on questions of law, such as that profits were embedded in receipts.
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion? You must disclose the primary facts fully and truly. Drawing inferences from those facts is the officer's job. Getting that inference wrong is not your failure and does not justify reopening.
The recorded reasons admit the AO had no time to verify my transactions. Is the reopening valid? No. The Gauhati High Court quashed the s.148 notice on two independent grounds: an officer who records that he could not identify the transactions for want of time has formed no reason to believe, and the s.151 approval was mechanical.
They issued a 148 notice in my late husband's name. Can they just issue a fresh one now? Not if the s.149 period has run out. Allahabad held that a notice on a dead person is void ab initio and that an order quashing such a notice is not a 'finding or direction' under s.150(1), so it cannot be used to reopen limitation.
The Supreme Court remitted my JAO reassessment case and gave four weeks to amend. Will the High Court actually let me amend to challenge s.147A? Not as of right. The Delhi High Court refused. Delhi had already held in T.K.S. Builder Pvt. Ltd. that the Faceless Assessing Officer and the Jurisdictional Assessing Officer have concurrent jurisdiction, so s.147A took nothing away from this petitioner; the writ petition had in any event already been dismissed. The court held that whatever little remained to be argued had been washed away by the amendment and rejected the amendment application as misconceived.
The same cash deposits were already reassessed and accepted at nil. Can they reopen them again? No. The Orissa High Court held that where an earlier s.147 proceeding examined these very deposits, found them disclosed and assessed at NIL, and that order went unchallenged, a second reassessment on identical material is a change of opinion and an impermissible review.
The officer has reopened my scrutiny assessment because the audit party disagreed with what he allowed. Is that a fresh look or a change of opinion? On this decision, a change of opinion. Where the Assessing Officer had all the relevant material during the original scrutiny assessment, a reassessment driven by an audit objection on that same material is an impermissible review, and reopening on the same material is not permitted. The Court also held the notice barred by limitation because the extended period was unavailable in the absence of a failure to disclose material facts.
My 148A notice says I never filed a return, but I did. Is that enough to get it quashed? Yes, on these facts. The Patna High Court held that where the Insight Portal flag is contradicted by the Department's own records, the 'information which suggests' escapement is missing and the s.148A(b) notice, the s.148A(d) order, the s.148 notice and the demand all fall.
The officer says I took accommodation entries and I say I received nothing. Must he have material that the entries exist before he reopens? He must. The Delhi High Court set aside a s.148A(d) order and the consequent notice where the information was that eleven entities controlled by an entry operator had given the company fictitious loans, the company denied receiving anything from them and disclosed the bank accounts it operated, and the officer never referred to any material showing that the money had in fact come into those accounts. The Court rejected the contention that at the s.148A(d) stage the officer need form no opinion on the genuineness or veracity of the information; he must be reasonably certain that the alleged entries exist, though he need not conclusively decide that they are accommodation entries. Liberty was reserved to issue a fresh notice if material is found.
A notice arrives in the name of someone who has died. Is it valid? Not where the proceedings were never begun in their lifetime. Section 159(2)(b) requires the notice to go to the legal representative. Serving a person who no longer exists is a jurisdictional failure and s.292B cannot cure it.
My reassessment notice under section 148 came from my own jurisdictional assessing officer, not through the faceless system. Is that notice good? No. The Punjab and Haryana High Court quashed section 148 notices issued by the Jurisdictional Assessing Officer, holding they contravene section 151A read with section 144B and the e-Assessment of Income Escaping Assessment Scheme, 2022 notified on 29 March 2022. Clause 3(b) of the scheme requires issuance of a section 148 notice through automated allocation and in a faceless manner. The Department's reliance on a CBDT office memorandum of 20 February 2023 and a Systems Directorate letter of 19 January 2024 failed: instructions and circulars can supplement but cannot supplant statutory provisions. Liberty was given to proceed in accordance with law.
The officer passed the order under section 148A(d) without answering a single point in my reply. Can I get the reassessment quashed on that ground alone? No, not on that ground alone. The Allahabad High Court held that section 148A does not oblige the Assessing Officer to deal with objections pointwise or to record detailed reasons. The old requirement of recording a 'reason to believe' has been done away with and replaced by a lighter, more subjective decision that it is a 'fit case' to issue a notice under section 148, on information that suggests escapement. The officer must not act whimsically, on extraneous material, or in ignorance of the reply, but an overall consideration is enough. Reading in a duty to give reasons for rejecting each objection would reintroduce 'reason to believe' by the back door. The petition was dismissed, with all merit defences left open.
Your s.148 notice came from your own local officer, not from the faceless unit. Does that matter? In Bombay, yes. After the CBDT scheme notified under s.151A on 29 March 2022, only a Faceless Assessing Officer acting through automated allocation can issue a reassessment notice. There is no concurrent jurisdiction, and a notice from the jurisdictional officer was quashed.
The AO made no enquiry before issuing my 148A(b) notice. Does that kill the reopening? No, on the Calcutta view. The Division Bench read the words 'if required' in s.148A(a) as giving the Assessing Officer a discretion, so the absence of a prior enquiry does not by itself vitiate the notice.
They reopened AY 2016-17 in 2022 for under Rs 50 lakh. Is the notice time-barred? Yes. The Jharkhand High Court held the three-year period for AY 2016-17 ended on 31 March 2020, and because the Department itself alleged escapement of only Rs. 39,21,450 the extended ten-year window in s.149(1)(b) was unavailable. The whole proceeding was without jurisdiction.
I filed the death certificate and they still issued the 148 notice in my mother's name. Is it valid? No. The Madhya Pradesh High Court quashed the s.148 notice and the s.148A(d) order. Once the Department knew of the death, issuing the notice in the deceased's name was a failure to acquire jurisdiction, and ss.292B, 292BB and 159 do not cure it.
I got a section 148 notice for 2016-17 where the alleged escaped income is under Rs 50 lakh. Is three years the limit, or can they use ten? Three years. The Delhi High Court held that where the escaped income is below Rs 50 lakh, clause (a) of section 149(1) applies and no notice under section 148 may issue after three years from the end of the relevant assessment year. It quashed the section 148A(d) orders and the consequent section 148 notices for assessment years 2016-17 and 2017-18 in a batch of writ petitions. It also declared bad in law paragraphs 6.1 and 6.2(ii) of the CBDT Instruction of 11 May 2022, to the extent they propound the travel back in time theory, holding those paragraphs ultra vires section 119 and section 149(1) and, in any event, vague.
The officer is reopening beyond three years and counting a disallowance of expenditure towards the fifty lakh figure in section 149(1)(b). Is a disallowance income 'represented in the form of an asset'? No, not on the text of section 149(1)(b) as it stood from 1 April 2021. The Madras High Court quashed reassessment notices for assessment years 2014-15 and 2017-18 in which the officer proposed only disallowances - unrealised foreign exchange loss, bad debts written off, loss on sale of non-performing loans, a section 43B disallowance and a MAT adjustment. The Court found no mention of any asset anywhere in the impugned proceedings, and held that the law then required material indicating the existence of an asset from which escapement could be inferred. It added that the material relied on was already on record and had been through scrutiny.
My section 148A(d) order and section 148 notice came from the local assessing officer after the 2022 faceless schemes started. Can I have them quashed on that ground alone? Yes. The Telangana High Court quashed the section 148A(d) orders and the consequential section 148 notices in a batch of over fifty writ petitions because they were issued by the local jurisdictional officer and not in the faceless manner required by section 151A read with section 144B and the two CBDT schemes of 28 and 29 March 2022. Where a statute requires a thing to be done in a particular manner, it must be done in that manner or not at all. The Department had also ignored the Supreme Court's direction in Ashish Agarwal to proceed under the substituted provisions. The consequential orders fell with the notices.
My 148A(b) notice describes an enquiry but nothing was attached. Can I insist on the material? Yes. The Jharkhand High Court held the Department is duty-bound and mandatorily required to supply all material information, the enquiry conducted and the supporting documents along with the s.148A(b) notice; a three-page narration with no enclosures does not discharge that obligation.
The s.148A(b) notice refers to information the officer never showed you. Can you insist on seeing it? Yes. The underlying information or material that triggered the proceeding must be furnished to you. The s.148A(d) order and the consequential s.148 notice were set aside — but the matter was remitted, not annulled.
The department says my section 148 notice was issued on 31 March because the ITBA screen shows it was generated that day, but the e-mail only reached me in April. Which date counts, and can I take that to a writ court? The date it went out. The Delhi High Court, deciding a batch of more than 170 writ petitions, held that 'issue' means the officer must, after drawing up and signing the notice, do an overt act to ensure its due despatch, and that it is only upon due despatch that a notice can be said to have been issued. Mere generation of the notice on the ITBA screen is therefore not issue, in fact or in law. The Court noted from the department's own compliance affidavit that generation and digital signing are the officer's acts while the e-mail carrying the notice is drafted and triggered by the ITBA software.
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.
The section 148A(b) notice just lists my own turnover from Form 10DB, GST and TDS data and calls it escaped income, and the officer passed the 148A(d) order without my detailed reply. Can I get it set aside? Yes. The Delhi High Court quashed the section 148A(d) order and the section 148 notice and remanded the matter for a fresh reasoned order within eight weeks. Classifying a fact already on record as 'information' may let the officer issue a notice under section 148A(b), but it does not let him issue a reassessment notice under section 148. The notice and order were cryptic, the underlying material was never shared, no reasonable time was given, and the detailed reply on record was not considered, which breaches the mandate of section 148A(c). The Court directed that its order be sent to the CBDT.
The s.148 notice was digitally signed on 31 March but the e-mail only went on 6 April. Was it issued in time? No. Signing a notice and issuing it are different acts. A digitally signed notice is an electronic record, and by s.13(1) of the Information Technology Act, 2000 its despatch occurs when it enters a computer resource outside the control of the originator. The notice here was issued on 6 April 2021, after the period in s.149 had run, and was quashed.
I got a section 148 notice after 1 April 2021 under the old reassessment provisions. Could the department still use them because of the COVID relaxation notifications? No, on this decision. The Delhi High Court held that the substitution of sections 147 to 151 by the Finance Act 2021 repealed the old provisions and replaced them, and that the Explanations in the notifications of 31 March 2021 and 27 April 2021, purporting to keep the old procedure alive until 30 June 2021, could not do so. Section 3(1) of the relaxation Act allows the Central Government to extend time limits and no more; a delegated legislation cannot vary the date on which Parliament's provisions take effect. Section 6 of the General Clauses Act does not save the old notices, because the new Act manifests an intention to destroy the old procedure.
A section 148 notice was issued in my late father's name after he had died. Is the reassessment valid because we never told the department? No. The Delhi High Court quashed the notice and everything that followed. Issuing the notice in the name of the correct person, and not a dead person, is not a procedural requirement but a condition precedent to a valid notice, so the jurisdictional requirement of section 148 was not met. No notice was ever issued to the legal heir within the limitation in section 149(1)(b); the proceedings were simply transferred to her PAN. Section 159 does not help the department where nothing was pending in the assessee's lifetime, and there is no statutory obligation on legal heirs to intimate the death. Sections 292B and 292BB do not cure it.
The Department wants to reopen a 1998-99 assessment in 2015 using the sixteen-year limit for foreign assets brought in from July 2012. Limitation for that year ran out in 2005. Can they? No. The Delhi High Court quashed the section 148 notice and all consequent proceedings. Limitation for assessment year 1998-99 expired on 31 March 2005 under section 149 as it then stood, six years from the end of the assessment year. The sixteen-year period in section 149(1)(c), inserted by the Finance Act 2012 with effect from 1 July 2012, could not revive an assessment that had already become final more than eight years earlier. Applying K.M. Sharma and S.S. Gadgil, an amendment extending limitation is not to be read as reviving proceedings already barred, absent express words or necessary implication.
My scrutiny assessment is being reopened after four years on an entry operator's statement that my share subscribers were paper companies, but I had filed all their details during the assessment. Can the notice stand? No. The Delhi High Court quashed the section 148 notice and the order disposing of the objections. The reasons named the same five subscriber companies whose details, confirmations, returns and balance sheets the assessee had filed during the section 143(3) assessment, and disclosed no new material and no fact the assessee had withheld. An allegation that companies are paper companies, without further facts and without any enquiry connecting the entry operator's statement to them, is not enough to reopen a completed assessment after four years. The Court also laid down four guidelines the Revenue is to follow in reopening cases.
My reassessment notice says I never filed a return and gets the amount wrong. Does that make the reopening bad? Yes, on these facts. The Delhi High Court dismissed the Revenue's appeal, holding that no error had been committed by the Tribunal in finding the reopening under section 147 bad in law. The reasons recorded contained two glaring errors: the Assessing Officer proceeded on the footing that no return had been filed when one had been filed and processed under section 143(1), and put the accommodation entries at Rs 1.56 crore when the correct figure on his own assessment order was Rs 78 lakh. That showed a failure of application of mind, and the Court could not discern the link between the tangible material and the formation of the reasons to believe.
The reasons recorded just repeat what the Investigation Wing said. Is that enough to reopen? No. The satisfaction that s.147 requires is the Assessing Officer's own and cannot be borrowed. Reasons that reproduce another authority's conclusions, without showing the link from tangible material to the belief, do not sustain a reopening.
The sanction for my reassessment notice is just the word approved on the file. Is that enough under section 151? No. The Delhi High Court held that section 151 requires the competent authority to apply his mind and form an opinion, and that the mere appending of the expression approved says nothing. He need not record elaborate reasons, but satisfaction must be recorded, which can be reflected in the briefest possible manner; here the exercise was ritualistic and formal rather than meaningful, which defeats the rationale of the safeguard of approval by a higher ranking officer. The Court also upheld the concurrent findings that the Assessing Officer had made only a perfunctory inquiry before adding Rs 1.35 crore under section 68. Both questions were answered in the assessee's favour.
My assessment was reopened on an accommodation entry list from the Investigation Wing. The reasons just list the entries and conclude I routed my own money. Is that a valid reopening? No. The Delhi High Court held that the Assessing Officer must apply his mind to the material and form his own prima facie opinion before issuing a notice under section 148. Reasons that set out four entries received from the Investigation Wing and then jump straight to the conclusion that the company had introduced its own unaccounted money, without saying what the material was or how the entries appeared in the accounts, do not meet the jurisdictional requirement of section 147. The Court also held that the Commissioner (Appeals) analysing the material afterwards is a post mortem exercise that cannot save a defective reopening. Appeal dismissed.
The section 148 notice was served on somebody at my old business premises, not on me. My accountant then wrote in objecting. Is the reassessment good? No. The Delhi High Court held that issue and service of the section 148 notice on the assessee, or on an agent he has empowered in writing to receive it, are jurisdictional requirements, not procedure. Service on an accountant at premises the assessee had not given as his address, whose authority the Revenue could not establish, was no service. Objecting through chartered accountants and taking part in the proceedings is not a waiver. Section 292BB is prospective from 1 April 2008 and, since the assessee objected before the reassessment was completed, its proviso applies anyway. The reassessment was quashed.
The Assessing Officer asked about my share gains during scrutiny, I answered, and the assessment order says nothing about it. Can he now reopen and call the gains business income? No. The Bombay High Court quashed the section 148 notice. Once a query is raised in scrutiny and the assessee answers it, the issue was considered by the Assessing Officer, even if the assessment order is silent on it. Reopening on the same issue is therefore a change of opinion and outside sections 147 and 148. The Court also held that an internal audit report which only draws a different inference from accounts already on record is not tangible material. The reassessment order passed while the writ was pending was set aside as well.
I disclosed everything in a scrutiny assessment, the Assessing Officer never asked about one particular item, and now he wants to reopen within four years — is that a change of opinion? It depends on what happened at the original assessment. The Delhi High Court Full Bench, on 21 September 2012, took up four referred questions on the meaning of change of opinion under section 147 after the 1989 amendment. Two propositions are settled on the face of the judgment. Where the return was only processed under section 143(1) and no scrutiny assessment was made, there is no opinion and so no change of opinion. Where the assessment order itself records that the issue was raised and decided for the assessee, reopening is barred. The hard case — full disclosure, a section 143(3) assessment, but silence in the order — is where the Bench divided.
My reopening notice was sanctioned by the Commissioner instead of the Joint Commissioner. Does approval by a more senior officer cure the defect? No. The Delhi High Court held that where section 151 names the Joint Commissioner as the authority to be satisfied, sanction by the Commissioner is not compliance, even though he is senior. The file here was routed through the Additional Commissioner, but he merely endorsed "CIT may kindly accord sanction" and applied no mind of his own. The Court held this was not an irregularity curable under section 292B. Where a statute requires a thing to be done in a certain manner it must be done in that manner alone, and the satisfaction of one authority cannot be substituted by that of another. The Revenue's appeal was dismissed.
The only material behind my reopening notice is a one-line entry in an Investigation Wing annexure naming me as the beneficiary of an accommodation entry. Is that enough? No. The Delhi High Court quashed the section 148 proceedings. The reasons referred to nothing but an annexure listing a Rs.5 lakh cheque received on 9 October 2002 from Swetu Stone PV, with a bank and account number. That annexure is not material or evidence establishing a nexus with escapement of income and is not even a pointer to it. The Assessing Officer had not applied his own mind to the information or examined its basis, and the Commissioner had given approval mechanically. The share applicant was an existing incorporated company with a permanent account number, and the entry operators' statements did not name the petitioner.
Same point, in Delhi: if the recorded grounds fail, can the officer still tax an unrelated item? No. Once the officer accepts that the recorded items did not escape assessment, it means he had no reason to believe, and the notice becomes invalid. Every new issue needs a fresh s.148 notice.
The Assessing Officer has reopened my assessment purely on an investigation wing list saying my share application money was an accommodation entry. Can I get the notice quashed? Yes, on these facts. The Delhi High Court quashed the section 147 proceedings and the section 148 notice. The recorded reasons reproduced the investigation wing's information and nothing more; neither the reasons nor the order rejecting objections showed any independent application of mind by the Assessing Officer. The four investor companies were named, their existence was not disputed, they had bank accounts and paid through banking channels - all of which the Assessing Officer knew from the outset. On those facts Lovely Exports applied squarely, and the Court held it would be unwarranted to make the assessee go through the whole gamut of reassessment proceedings.
My s.148 notice is dated 31 March but the post office booked it on 7 April. Which date does s.149 test? The date it went to the post office. To issue means to send out, to place in the hands of the proper officer for service; merely signing the notice on 31 March cannot be equated with issuing it. The date of issue was therefore 7 April 2010, beyond the six years available for assessment year 2003-04, and the notices went.
The officer dropped the very issue he reopened for, then taxed something else instead. Is that allowed? No. If no addition is made on the ground for which the notice was issued, the officer cannot independently go on to assess some other income under s.147. Explanation 3 does not override the substantive part of the section.
The reopening notice came after four years and the recorded reasons say nothing about my failing to disclose material facts. Is that fatal, and does it matter that the reasons reached me a year later? Both points went in the assessee's favour. The Delhi High Court quashed the section 148 notice, the order rejecting objections and all proceedings under them. Where the proviso to section 147 applies, the reasons must themselves allege failure to disclose fully and truly all material facts; the reasons supplied here contained no such allegation, and a differently worded form produced later with the counter-affidavit could not be substituted for them. The Court also held that reasons must be furnished within the six year outer limit in section 149, since the notice and the communication of reasons go hand in hand. On the merits the assessee had disclosed everything the officer asked for.
My scrutiny assessment is being reopened more than four years later, and the Commissioner signed the section 151 approval the same day the file reached him. Can I have the notice quashed? Yes. The Bombay High Court quashed the section 148 notices and the orders rejecting the objections. Three things were fatal. The recorded reasons were unsustainable: the tax deduction details were on record in Form No.27 and in the tax audit report, and the closing stock valuation had already been examined in the original assessment. Reopening beyond four years without alleging any failure to disclose fully and truly cannot stand. And the approval under section 151 showed non-application of mind - the Assessing Officer carried the file to the Commissioner and approval was granted the same day, in his presence, without considering either the four-year bar or whether there had been any failure to disclose.
My assessment is being reopened after four years, but the recorded reasons never say I failed to disclose anything. Can the Department make that case in its affidavit at the hearing? No. The Bombay High Court quashed the section 148 notice. Where a scrutiny assessment under section 143(3) has been made, the proviso to section 147 bars action after four years from the end of the assessment year unless income escaped by reason of the assessee's failure to disclose fully and truly all material facts. The reasons here said nothing about any such failure. The Court held that reasons must be read as recorded, with no substitution, deletion, addition or inference, and cannot be supplemented by an affidavit or an oral submission. The officer therefore had no jurisdiction, and the notice fell on that short ground alone.
My father died and the officer reopened his assessment by serving the notice on only one of us, although he knew there were other heirs. Is that assessment valid against the estate? No. The Gujarat High Court held that where a person dies leaving more than one legal representative, the Assessing Officer must serve the reassessment notice on all of them, so that the estate is completely represented; service on one leaves the estate only partially represented and the assessment does not bind it. The Court recognised three exceptions: where one representative manages the entire estate; where one appears with the express or implied consent of the others; and where the officer, after diligent and bona fide enquiry, believes those served to be the only representatives. None applied here, since Daulatram had administered only one bank account, he had objected to the notice, and the officer knew of the other heirs and made no enquiry.
A compliance campaign message arrived and nothing was done about it. What does the department do next, and does an updated return filed late in the day count for anything? It becomes a reopening, and yes, the updated return is credited against the figure. The Directorate of Income Tax (Systems) tells officers that what the e-Verification machinery hands them is "Information" within the statutory list, that they are to invoke s.147 and issue the s.148 notice in those cases, and that the case will sit in one of two buckets - no updated return filed, or an updated return filed during the verification without fully reconciling the mismatch. In the second bucket the amount treated as escaping is reduced by the additional income the assessee has actually shown. Two things must be said on the face of this. The instrument is an internal communication of the Directorate of Income Tax (Systems) which does not appear to have been published as departmental material and could not be traced in a subscription research database; the copy relied on here comes from an unofficial host. And nothing in it dispenses with the s.148A stage.
Beyond three years, who has to approve the reopening — and what if the wrong officer signed? Beyond three years the sanction must come from the authority in s.151(ii). Approval by the Principal Commissioner under s.151(i) is no approval at all, and the s.148A(d) order and s.148 notice built on it were quashed.
Nothing here is written from memory. Every entry was found through a search, and the page for it links to where it was found, so you can check it rather than take our word for it. What has not happened yet is the part that matters most: nobody has read the certified copy of each judgment and signed off the summary against it. Until that is done, each page says Not yet CA-verified, and it means exactly what it says. Read the source before you rely on an entry in a reply to an Assessing Officer or in an appeal.