Income Tax Notice u/s 148A vs 148 for AY 2026-27: Reassessment Reply & Time Limits

Direct answer: For AY 2026-27 and earlier assessment years, reassessment continues under the Income-tax Act, 1961 even after 1 April 2026. The Assessing Officer generally must first issue a show-cause notice under section 148A with the information suggesting escaped income, consider the taxpayer’s response, pass a reasoned order under section 148A(3), and only then issue a section 148 notice where the statutory conditions are met.

Why this matters after 1 April 2026

The Income Tax Act, 2025 is now in force, but the transition rules do not move older assessment years into the new reassessment code. The Income Tax Department’s current reassessment FAQs expressly state that sections 279–286 of the 2025 Act apply to Tax Year 2026-27 and later tax years, while assessment years up to AY 2026-27 continue under the 1961 Act. This distinction matters because taxpayers and advisers may otherwise cite the wrong section, approval hierarchy or limitation rule.

Section 148A vs Section 148: the practical difference

Section 148A is the pre-reassessment safeguard. The Assessing Officer must disclose the information suggesting escapement, give the taxpayer an opportunity to respond, consider the reply and determine whether it is a fit case to reopen. Section 148 is the consequential reassessment notice requiring a return after the statutory pre-notice process has been completed, subject to the exceptions and conditions in the Act.

What should a taxpayer check immediately?

First authenticate the notice on the Income Tax e-Filing portal. Then identify the assessment year, the information relied upon, the alleged quantum of escaped income, the response deadline, the issuing authority and whether the notice is under section 148A or section 148. Reconcile the allegation against the filed return, AIS/TIS, Form 26AS, SFT information, bank and demat records, property documents, foreign-asset disclosures and books of account as relevant.

Limitation under section 149

The Department’s current guidance states that a section 148A show-cause notice can generally be issued within three years from the end of the relevant assessment year where escaped income is below ₹50 lakh, and within five years where the escaped income is ₹50 lakh or more. The corresponding section 148 notice limits extend to three years and three months, or five years and three months, respectively, subject to the statutory conditions, exclusions and special rules.

How to draft a strong section 148A response

A useful response should address jurisdiction and limitation before merits; reconcile each item of information relied upon; attach primary evidence rather than broad assertions; explain amounts already offered to tax or non-taxable receipts; identify duplication or data-matching errors; and preserve legal objections without obscuring the factual explanation. Where the information comes from AIS, SFT, securities, property or banking data, transaction-level reconciliation is usually more persuasive than a general denial.

What happens if the Assessing Officer proceeds?

After considering the response, the Assessing Officer passes an order under section 148A(3) deciding whether the case is fit for issuance of a section 148 notice. If a section 148 notice follows, the taxpayer must comply with the return requirement within the period stated in the notice and then deal with the reassessment proceedings on the statutory record.

Old Act vs new Act transition

For Tax Year 2026-27 and later tax years, reassessment moves to sections 279–286 of the Income Tax Act, 2025. The new framework similarly requires information suggesting escaped income, a show-cause opportunity under section 281, consideration of the reply and a reasoned order before the section 280 reopening notice. For earlier assessment years, including AY 2026-27, the Department confirms that the 1961 Act continues to govern.

Practical checklist for businesses and professionals

Maintain a notice-control register with service date and deadline; preserve the downloaded notice and annexures; freeze the relevant ledger, bank, GST, TDS, AIS/TIS and supporting-document data; prepare a transaction-level reconciliation; test limitation and approval; document all portal submissions and acknowledgements; and ensure the reassessment return and later submissions remain consistent with the section 148A response.

Frequently asked questions

Does the Income Tax Act, 2025 govern a fresh reopening of AY 2024-25 after 1 April 2026?

No. The Department’s transition guidance states that earlier assessment years up to AY 2026-27 continue under the Income-tax Act, 1961, even where proceedings are initiated after 1 April 2026.

Can a section 148 notice be issued without the section 148A process?

Section 148 is expressly subject to section 148A. The Act contains specified situations and procedural rules that must be checked in the particular case, so the notice package and statutory exception, if any, should be reviewed rather than assuming invalidity.

What is the first thing to do after receiving a reassessment notice?

Authenticate it on the official portal, record the response deadline, download every annexure and reconcile the stated information before filing a reply.

Primary references

Income Tax Department — Reassessment Proceedings FAQs (Income Tax Act, 2025 transition); Income Tax Department — Assessment guidance for sections 147, 148, 148A and 149; Income-tax Act, 1961 — section 148; Income Tax Department — Notice and e-Proceeding services.

Professional support

PGT & Associates assists businesses and taxpayers with income-tax notice review, data reconciliation, reassessment responses and documentation strategy. A notice should be evaluated on its own facts, assessment year and statutory timeline before a response is filed.

Disclaimer

This article is for general professional information and does not constitute legal or tax advice. Statutory provisions, judicial interpretation and facts should be independently reviewed for each case.