Section 148 of ITA, 1961 : Section 148: Issue Of Notice Where Income Has Escaped Assessment

Explanation using Example

Imagine a scenario where Mr. Sharma, a business owner, filed his tax returns for the assessment year 2018-19. However, the Assessing Officer (AO) later discovers that Mr. Sharma had not reported certain income from investments in his filed returns. The AO believes that this income has escaped assessment, which may lead to additional tax liability for Mr. Sharma.

The AO decides to reassess Mr. Sharma's income for the said year. Before proceeding with the reassessment, as per Section 148 of the Income-tax Act, 1961, the AO issues a notice to Mr. Sharma. This notice requires him to furnish a return of his income for the assessment year 2018-19 within the specified time mentioned in the notice.

Mr. Sharma is now required to comply with this notice and provide the necessary details as if he is filing a return under section 139. The AO recorded his reasons for the reassessment before issuing the notice to ensure the process is in line with the legal requirements of Section 148(2).

This example demonstrates the use of Section 148 when the AO has reason to believe that certain income has not been properly reported and needs to reassess the tax liability of the individual.