Some principles involved in reopening of assessment
1. Jurisdictional Integrity Must Be Rooted in Proper Disclosure
1) The issuance of a show-cause notice under Section 148A(b) is the jurisdictional foundation of reassessment.
2) It must contain clear, specific, and verifiable “information” suggesting income has escaped assessment.
3) Vague or generic notices defeat the statutory purpose and render proceedings void. (Mahashian Di Hatti Pvt. Ltd. v. DCIT)
2. Final Order Must Not Travel Beyond the Show-Cause Notice
1) The Section 148A(d) order must be based only on the grounds specified in the 148A(b) notice.
2) Courts have held that introducing new grounds at the final stage without prior notice violates natural justice.
3) Catchy Prop-Build (P.) Ltd., Excel Commodity, and Satluj Credit & Holdings are key rulings enforcing this.
3. Consideration of Assessee's Reply is Mandatory
1) The Assessing Officer must engage with and discuss the assessee's reply in the 148A(d) order.
2) Disregard or mechanical treatment of objections amounts to denial of meaningful hearing.
3) Somnath Dealtrade Pvt. Ltd. and Annam Rajasekher Bindu reinforce this mandatory obligation.
4. Speaking and Reasoned Order Required Under 148A(d)
1) A valid 148A(d) order must record specific reasons and show application of mind.
2) It must objectively evaluate:
(i) material disclosed in 148A(b);
(ii) assessee’s reply;
(iii) justification for escapement belief.
3) Absence of such reasoning renders the order arbitrary and unsustainable.
5. No Post-Facto Justifications Allowed
1) Revenue cannot introduce new legal provisions or factual justifications after 148A(d) is passed.
2) Any new allegation or legal switch (e.g., from capital gains to Section 56) must trigger a fresh 148A(b) notice.
3) Packirisamy Senthilkumar v. GOI affirmed this principle.
6. Right to Access “Information” and Fair Opportunity
1) The assessee must be provided access to Insight Portal or third-party data forming the basis of notice.
2) Failure to share such information invalidates the opportunity to respond.
3) Somnath Dealtrade and Rajam Selvi reiterate this right to full disclosure.
7. Validity Hinges on Jurisdictional Sanctions and Thresholds
1) Reassessment must meet conditions under Section 149 (e.g., ₹50 lakh threshold post-3 years).
2) Prior sanction under Section 151 must not be mechanical.
3) Nikhil Chandrakant Dharia (SC) struck down reassessment for lack of genuine approval.
8. Personal Hearing is Mandatory When Requested
1) Where a taxpayer explicitly asks for a personal hearing, denial violates principles of natural justice.
2) Nikhil Chandrakant Dharia v. ITO (SC) reinforced this as a statutory and constitutional right.r
9. Courts Advocate for Administrative and Structural Compliance
1) Judiciary has advised the CBDT to issue SOPs or circulars codifying:
a. Disclosure standards for 148A(b);
b. Format for 148A(d) orders;
c. Prohibition on new grounds post 148A(b).
2) Such guidance would minimize litigation and uphold procedural rigour.
10. Constitutional Dimension Anchored in Article 14
1) Judicial enforcement of Sections 148A(b) and 148A(d) is grounded in the right to equality and due process.
2) Courts have affirmed that procedural safeguards are constitutional obligations, not mere formalities.
3) Natural justice is central to reassessment legitimacy in a modern tax system.
11. Case laws referred :
(i) (i) J. G's Departmental Store v. ITO [2025] 173 taxmann.com 618 (Delhi): Hon’ble.
(ii) Usha Rani Girdhar v. ITO [2023] 146 taxmann.com 547 (Delhi):
(iii) Mahashian Di Hatti Pvt. Ltd. v. DCIT [2022] W.P.(C) No. 12504/2022:.
(iv) Catchy Prop-Build (P.) Ltd. v. ACIT [2022] 145 taxmann.com 510 (Delhi):
(v) Excel Commodity and Derivative (P.) Ltd. v. UOI [2023] 150 taxmann.com 94 (Calcutta):.
(vi) Annam Rajasekher Bindu v. ITO [2024] 158 taxmann.com 406 (Madras):
(vii) Vivo Mobile India (P.) Ltd. v. ACIT [2025] 171 taxmann.com 657 (Delhi):
(viii) Satluj Credit & Holdings (P.) Ltd. v. ITO [2024] 164 taxmann.com 285 (Madras)
(ix) Somnath Dealtrade Pvt. Ltd. v. UOI [2022] 143 taxmann.com 71 (Calcutta)