Received a Reassessment (Section 148) Notice? How to Furnish Your Return and Respond Online

A Section 148 notice is not an assessment order and it is not a demand. It is the statutory doorway through which the Income Tax Department reopens a year it believes was under-taxed, and everything that follows depends on how you answer it in the first few weeks. This guide walks a salaried taxpayer through the sequence under the Income-tax Act 1961: the deadline to furnish your return, the Section 149 time limits that decide whether the notice is even valid, and how to file your reply through the e-Proceedings tab.

The Scenario

Imagine you filed your income tax return for the year on time, received your intimation under Section 143(1), and considered the matter closed. Eighteen months later an e-mail from the Income Tax Department lands in your inbox with the subject line "Notice under Section 148 of the Income-tax Act, 1961", and a matching entry appears under the e-Proceedings tab on incometax.gov.in. The notice states that the Assessing Officer has "reason to believe" that income chargeable to tax has escaped assessment for that assessment year, and directs you to furnish a return of income for that year.

The two questions every reader asks are the same. First, is the notice within time, because a notice issued beyond the Section 149 limitation is void. Second, how much extra tax, interest and penalty is now on the table, and how quickly must the return be filed. A single Rs 6,00,000 escapement, as the worked example below shows, can turn into an additional Rs 1,10,500 of tax before a rupee of penalty is counted. Reassessment reached record volumes after the faceless system went live in 2021, so this is no longer a rare event reserved for large businesses.

Statutory Answer

Reassessment is governed by Sections 147 to 151 of the Income-tax Act 1961. Section 147 empowers the Assessing Officer to assess or reassess income that has escaped assessment for any assessment year. Section 148 is the operative trigger: it requires the officer to serve a notice before making that reassessment, and it obliges you to furnish a return in the prescribed form. Under the first proviso to Section 148, that return must be furnished within the time specified in the notice, which cannot exceed three months from the end of the month in which the notice is issued. A notice issued on 12 June 2026, therefore, gives you until 30 September 2026 at the outside, though the notice itself may specify a shorter window.

Before any Section 148 notice can be issued, Section 148A imposes a mandatory safeguard. The Assessing Officer must provide you an opportunity of being heard by serving a show-cause notice setting out the information suggesting that income has escaped assessment, and must consider your reply before passing a reasoned order on whether it is a fit case to reopen. For notices issued up to 31 August 2024 the show-cause window under Section 148A(b) was between 7 and 30 days; the Finance (No. 2) Act 2024 restructured the provision with effect from 1 September 2024 so that the time to respond is now the period specified in the notice itself. The Supreme Court in Union of India v. Ashish Agarwal (judgement dated 4 May 2022) directed that roughly 90,000 old-regime notices issued after 1 April 2021 be treated as show-cause notices under Section 148A, confirming that skipping this stage is fatal to the reassessment.

Whether the notice survives at all turns on Section 149. As amended by the Finance (No. 2) Act 2024 and applicable to notices issued on or after 1 September 2024, a Section 148 notice cannot ordinarily be issued after three years and three months from the end of the relevant assessment year. That outer limit extends to five years and three months from the end of the relevant assessment year only where the income that has escaped assessment, and is represented as an asset, expenditure or an entry, amounts to Rs 50,00,000 or more. The Rs 50 lakh threshold has been the dividing line since the Finance Act 2021, and the extended window was cut from the earlier ten years to five years by the 2024 amendment.

Section 151 adds a second lock: no notice under Section 148 or order under Section 148A can be issued without the prior approval of the specified sanctioning authority, whose rank rises with the age of the assessment year. For tax year 2026-27 onward the new Income-tax Act 2025 recasts this as a show-cause, consider-the-reply and reasoned-order-with-supervisor-approval sequence before the reopening notice is served; assessment years that predate it continue under the 1961 Act.

Worked Resolution

Take Rohan, a salaried employee assessed under the new tax regime, whose reopened year is illustrated here using the FY 2025-26 new-regime rates so that every figure is verifiable. His original return declared a gross salary of Rs 14,00,000. After the Rs 75,000 standard deduction available in the new regime, his taxable income was Rs 13,25,000, and because that exceeds the Rs 12,00,000 threshold he received no Section 87A rebate.

The reassessment alleges that Rs 6,00,000 of interest income from a fixed deposit escaped assessment. Added to his salary income, his revised taxable total becomes Rs 19,25,000. Applying the FY 2025-26 new-regime slabs, the additional tax works out as shown below. Note that the escaped Rs 6,00,000 falls partly in the 15% band and partly in the 20% band, so the marginal tax on it is far higher than his original average rate.

The tax before cess climbs from Rs 78,750 to Rs 1,85,000, a difference of Rs 1,06,250, and after the 4% cess the additional liability is Rs 1,10,500. On top of this, Section 234B levies simple interest at 1% per month for the advance-tax shortfall from 1 April of the assessment year until the tax is paid, and Section 234A adds a further 1% per month where the reassessment return is late. Over a two-year gap the 234B interest alone can exceed Rs 25,000 on this escapement.

Penalty is the third layer. Section 270A charges a penalty of 50% of the tax on under-reported income, which rises to 200% where the under-reporting amounts to misreporting, such as a suppressed receipt. On the Rs 1,06,250 of tax attributable to the escaped income, that is Rs 53,125 at the under-reporting rate and Rs 2,12,500 at the misreporting rate.

The practical lesson is that filing the reassessment return promptly and paying the self-assessment tax on the escaped income before the assessment is completed can support a plea against the harsher misreporting penalty. You can model the revised tax with the income tax calculator, compare regimes on the old vs new tool, and, where the escapement is a property or share sale, work out the charge on the capital gains calculator.

How to Respond via e-Proceedings

Every reply to a Section 148 or 148A notice is filed electronically, and the Income Tax Department sets out the flow in its reassessment proceedings help. Log in to incometax.gov.in, open the e-Proceedings tab, and select the notice by its Document Identification Number (DIN); a notice without a valid DIN is invalid under CBDT Circular No. 19/2019 dated 14 August 2019. First, file the return for the reopened year through the "e-File" menu, selecting Section 148 as the filing section, because your reply cannot be considered until the return is on record. Then, under the same e-Proceedings entry, upload your written submission and any evidence, such as bank statements or a Form 26AS reconciliation, within the time the notice specifies.

If you dispute the reopening itself, the objection is filed at the Section 148A stage, before the order under Section 148A(d), and again through e-Proceedings. Keep the acknowledgement number of every upload, because the faceless assessment record is built entirely from what is submitted through the portal. Where the demand after reassessment is disputed, the appeal lies to the Commissioner (Appeals) under Section 246A within 30 days of the assessment order, with Form 35 filed online.

FAQ

What happens if I ignore a Section 148 notice?

Ignoring the notice is treated as a failure to furnish a return, and the Assessing Officer can proceed to a best-judgement assessment under Section 144, estimating your income without your inputs. That almost always produces a higher figure than an accurate return, and it exposes you to the full Section 270A penalty of up to 200% and prosecution under Section 276CC for wilful failure to furnish a return. File within the three-month window even if you intend to dispute the reopening.

How do I check whether the notice is within the Section 149 time limit?

Identify the relevant assessment year on the notice and count from the end of that year, that is from 31 March. If the escaped income is below Rs 50,00,000, the notice must be issued within three years and three months of that date; if it is Rs 50,00,000 or more as an asset, expenditure or entry, the limit is five years and three months. A notice issued after those dates is barred by limitation and can be challenged at the Section 148A stage.

Is a notice valid if it has no Document Identification Number?

No. Under CBDT Circular No. 19/2019 dated 14 August 2019, every notice, order and communication issued from 1 October 2019 must carry a computer-generated DIN, and any communication issued without one is treated as invalid and deemed never to have been issued. Verify the DIN on the "Authenticate Notice/Order" service on incometax.gov.in before you reply.

Can I claim a refund while responding to a reassessment notice?

Yes, if the reassessment return, after including the escaped income, still shows tax paid in excess of the liability, the excess is refundable and processed through the ordinary tax refund mechanism. However, any existing refund can be adjusted against the fresh demand under Section 245 after an intimation, so a net refund is only likely where substantial TDS or advance tax was already paid.

Do I have to pay the disputed tax before filing an appeal?

To have an appeal admitted before the Commissioner (Appeals) under Section 246A, you must ordinarily pay the tax due on the income returned. For the disputed additions, CBDT instructions generally require payment of 20% of the disputed demand for a stay pending the first appeal, filed online within 30 days of the order.

Does the new Income-tax Act 2025 change how I respond?

For assessment years up to and including tax year 2025-26, the Income-tax Act 1961 procedure described here continues to apply. From tax year 2026-27 onward the Income-tax Act 2025 governs reopening through a show-cause, reasoned-order and supervisor-approval sequence, but the practical channel remains the e-Proceedings tab on incometax.gov.in, so the response mechanics are unchanged.