TaxTMI 
TaxTMI 
Reassessment Procedure in the case of search
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....eassessment Procedure in the case of search<br> Query (Issue) Started By: - Ved Jain Dated:- 25-6-2026 Last Reply Date:- 29-6-2026 Income Tax<br>Got 3 Replies<br>Income Tax<br>In my case notice us 148A(b) has been issued on 29.03.2023. (Applicable F.A. 2022) Search conducted on other person on 17.12.2021 I want to ask if there are any case laws stating that for the search cases the Ld. AO wa....
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....s supposed to straightaway issue notice us 148 instead of issuing notice us 148A(b) as per clause (c) of the proviso to Section 148A along with Explanation 2 clause iv to section 148 Reply By YAGAY andSUN: The Reply: Yes. The statutory scheme itself strongly supports the proposition that in certain search-related cases the AO should bypass Section 148A(b) and proceed directly with a notice un....
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....der Section 148. Statutory framework The first proviso to Section 148A states that Section 148A shall not apply in specified cases. Clause (c) covers a situation where: the AO is satisfied, with prior approval of the PCIT/CIT, that books of account or documents seized/requisitioned in the case of another person pertain to, or information contained therein relates to, the assessee. This....
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.... dovetails with Explanation 2(iv) to Section 148, which deems the AO to have information suggesting escapement of income in such cases. Consequently, the AO can issue notice under Section 148 directly, without following the procedure under Section 148A. Judicial support While there are not many reported judgments specifically holding that issuance of a 148A(b) notice in a proviso (c)/Explana....
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....tion 2(iv) case is illegal because the AO ought to have directly issued a Section 148 notice, courts have recognized that the Legislature has expressly excluded Section 148A from such search/requisition cases. A relevant High Court decision is: • 2024 (3) TMI 1411 - the Court held that where the case fell within the first proviso to Section 148A because requisition proceedings unde....
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....r Section 132A had already been initiated, the pre-notice procedure under Section 148A was not required and direct issuance of Section 148 notice was permissible. This judgment concerns clause (a) of the proviso (search/requisition in the assessee's own case), but the principle is the same: once a case falls within the categories excluded by the first proviso, compliance with Section 148A i....
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....s not mandatory. Reply By YAGAY andSUN: The Reply: Practical litigation point If your argument is: "The AO issued a notice under Section 148A(b) even though the case was covered by proviso (c) to Section 148A read with Explanation 2(iv) to Section 148", there are two possible positions: • Revenue's likely stand: issuance of a 148A(b) notice gave the assessee more opp....
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....ortunity than the statute required, so it is only an irregularity and does not invalidate proceedings. • Assessee's possible stand: once the AO himself invokes material falling under proviso (c)/Explanation 2(iv), the jurisdiction must be exercised under that special statutory route and not through the ordinary Section 148A procedure; therefore, the assumption of jurisdiction is c....
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....ontrary to the statutory scheme. The stronger authorities presently available generally establish the non-applicability of Section 148A in excluded search cases, rather than expressly quashing proceedings because the AO unnecessarily issued a 148A(b) notice. Reply By Ryan Vaz: The Reply: No, there are generally no case laws stating that the Assessing Officer (AO) was mandated to straightaw....
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....ay issue a notice under Section 148 instead of Section 148A(b) in search cases. The relevant provisions (proviso to Section 148A(b) and Explanation 2(iv) to Section 148) provide the AO with the discretion to bypass the Section 148A(b) procedure in search cases, but they do not prohibit the AO from issuing a Section 148A(b) notice. Providing an opportunity to the assessee, even if not strictly requ....
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....ired, is typically viewed as a procedural benefit and not a ground to invalidate the proceedings.<br> Discussion Forum - Knowledge Sharing ....