I. Introduction

The power of the State to reopen concluded assessments and tax income that may have escaped the original assessment is one of the most potent and, consequently, one of the most contested aspects of the Income Tax Act, 1961. Sections 147, 148, 148A, 149, 150, and 151 of the Act collectively form the statutory architecture governing reassessment proceedings. While the revenue’s interest in ensuring that no taxable income goes untaxed is undeniable, the exercise of reassessment powers directly impinges upon the finality of assessments and the certainty that taxpayers expect from the tax administration system.

The quashing of Section 148 notice by High Court has emerged as one of the most active areas of tax litigation in India, particularly before the Delhi High Court. The writ jurisdiction under Article 226 of the Constitution of India has been invoked with remarkable frequency by assessees seeking to challenge the initiation of reassessment proceedings. The courts have consistently emphasized that reassessment is not a tool for the Assessing Officer to have a “second look” at the return, nor is it a mechanism to revisit concluded proceedings on the basis of a mere change of opinion.

The Finance Act, 2021 brought transformative changes to the reassessment regime by introducing Section 148A, which mandated a pre-notice inquiry and opportunity of hearing before issuance of any Section 148 notice. Subsequently, the Finance Act, 2024 further revised the limitation periods, reducing the outer time limit for reassessment in cases involving escaped income exceeding ₹50 lakhs from ten years to five years. These legislative reforms, coupled with the Supreme Court’s landmark ruling in Union of India v. Ashish Agarwal (2023) 1 SCC 617, have fundamentally reshaped the landscape of reassessment jurisprudence.^[1]

This article presents a comprehensive analysis of the entire law of reassessment under the Income Tax Act, the writ petition remedy available to assessees, and the circumstances under which reassessment notices have been quashed, with particular focus on Delhi High Court decisions. The discussion aims to serve as a definitive resource for practitioners, researchers, and assessees navigating the complex terrain of quashing of Section 148 notice by High Court proceedings.

II. Legislative Framework: The Scheme of Reassessment

A. Section 147: Income Escaping Assessment

Section 147 of the Income Tax Act provides the substantive power to the Assessing Officer (AO) to assess or reassess income that has escaped assessment. Following the Finance Act, 2021 amendments, Section 147 now states that if any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the AO may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section.^[2]

Explanation 1 to Section 148 provides that the production of account books or other evidence before the AO shall not necessarily amount to disclosure within the meaning of the proviso, and that information with the AO which suggests income chargeable to tax has escaped assessment shall be deemed to be cases where income has escaped assessment.

B. Section 148: Issuance of Notice

Section 148 is the procedural provision that mandates the AO to serve a notice on the assessee before commencing reassessment. The notice requires the assessee to furnish a return of income for the relevant assessment year within the time specified in the notice. The critical requirement is that no notice under Section 148 shall be issued unless there is information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year, and the AO has obtained prior approval of the specified authority.^[3]

C. Section 148A: Conducting Inquiry and Providing Opportunity

Section 148A, introduced by the Finance Act, 2021, is a watershed provision that codified the principles laid down by the Supreme Court in GKN Driveshafts (India) Ltd. v. Income Tax Officer (2003) 1 SCC 72.^[4] This section mandates that before issuing any notice under Section 148, the AO must: (a) conduct any inquiry, if required, with prior approval of the specified authority; (b) provide the assessee an opportunity of being heard by serving upon him a notice to show cause within such time, not being less than seven days and not exceeding thirty days, as to why a notice under Section 148 should not be issued; (c) consider the reply furnished by the assessee; and (d) decide on the basis of material available on record, including the reply of the assessee, whether or not it is a fit case for issuance of notice under Section 148, by passing an order with the prior approval of the specified authority.

D. Section 149: Time Limitation

Section 149 prescribes the time limits within which a notice under Section 148 may be issued. With effect from 1 September 2024, as amended by the Finance (No. 2) Act, 2024, a notice under Section 148 cannot be issued at any time in a case for the relevant assessment year after the expiry of three years and three months from the end of the relevant assessment year. However, where the income chargeable to tax which has escaped assessment amounts to or is likely to amount to ₹50 lakhs or more, notice may be issued within five years and three months from the end of the relevant assessment year.^[5]

E. Section 151: Sanction for Issue of Notice

Section 151 provides a crucial safeguard by requiring prior approval of specified authorities before issuance of any notice under Section 148. The specified authority depends on the period that has elapsed since the end of the relevant assessment year. After the Finance Act, 2021 amendments, where a notice is to be issued within three years from the end of the relevant assessment year, approval must be obtained from the Principal Commissioner or Commissioner. Where the period exceeds three years, approval must be obtained from the Principal Chief Commissioner or Chief Commissioner. The Finance Act, 2024 has further rationalized these requirements by designating the Additional Commissioner, Additional Director, Joint Commissioner, or Joint Director as the specified authority.^[6]

III. Procedure for Reassessment Under the Income Tax Act

The reassessment procedure under the Income Tax Act, as it stands after the Finance Act, 2021 and the Finance Act, 2024 amendments, involves a multi-step process that must be strictly followed. Non-compliance with any of these procedural steps has been a frequent basis for the quashing of Section 148 notice by High Court. The step-by-step procedure is as follows:

Step 1: Receipt of Information (Section 148)

The AO must possess “information which suggests that income chargeable to tax has escaped assessment.” This information may emanate from the Risk Management Strategy (RMS) formulated by the CBDT, data analytics from the Insight Portal, findings of search or survey operations, information from Investigation Wings, reports of internal or revenue audits, information shared by foreign tax authorities, or any other specific information flagged by the system.

Step 2: Prior Inquiry with Approval (Section 148A(a))

The AO may conduct a preliminary inquiry to ascertain whether the information received warrants initiation of reassessment proceedings. This inquiry must be conducted with the prior approval of the specified authority under Section 151. The purpose is to filter out baseless cases at the threshold itself.

Step 3: Show Cause Notice (Section 148A(b))

The AO shall provide the assessee an opportunity of being heard by serving a notice to show cause within a time period that is not less than seven days and not exceeding thirty days from the date of the notice, as to why a notice under Section 148 should not be issued. The show cause notice must contain the information and material relied upon by the AO and must provide specific details of the income alleged to have escaped assessment.

Step 4: Reply by the Assessee (Section 148A(c))

The assessee is required to furnish a reply within the time specified in the show cause notice. This reply may contain factual explanations, legal objections, documentary evidence, and any preliminary objections against the proposed reassessment. The AO is bound to consider this reply before proceeding further.

Step 5: Passing of Order Under Section 148A(d)

After considering the reply furnished by the assessee and all the material available on record, the AO must pass a speaking order deciding whether it is a fit case for issuance of notice under Section 148. This order must be passed with the prior approval of the specified authority under Section 151. If the AO decides that it is not a fit case, the proceedings are dropped. If the AO decides that it is a fit case, an order is passed under Section 148A(d), which must record reasons and deal with the objections raised by the assessee.

Step 6: Issuance of Notice Under Section 148

Only after following the aforesaid procedure and passing an order under Section 148A(d) can the AO issue a notice under Section 148. The notice requires the assessee to furnish a return of income for the relevant assessment year. This notice must be served along with a copy of the order passed under Section 148A(d) and the prior approval obtained under Section 151.

Step 7: Filing of Return and Assessment

Upon receipt of the notice under Section 148, the assessee is required to file a return of income within the prescribed time. The AO may then issue a notice under Section 143(2) and proceed with the reassessment, which must be completed within the time limits prescribed under Section 153.

Summary of Key Provisions

IV. Time Limitations Under Section 149

The limitation provisions under Section 149 are among the most litigated aspects of reassessment law, and non-compliance with these time limits has been a primary ground for the quashing of Section 148 notice by High Court. The current limitation framework, effective from 1 September 2024, is as follows:

A. Normal Time Limit: Three Years and Three Months

No notice under Section 148 shall be issued for the relevant assessment year if three years and three months have expired from the end of the relevant assessment year. This is the standard outer limit applicable to all cases where the income chargeable to tax which has escaped assessment is less than ₹50 lakhs.^[7]

B. Extended Time Limit: Five Years and Three Months

Where the AO has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of an asset or expenditure or entries in the books of account, which has escaped assessment amounts to or is likely to amount to ₹50 lakhs or more for that year, notice under Section 148 may be issued within five years and three months from the end of the relevant assessment year.^[8]

C. Evolution of Limitation Periods

D. First Proviso to Section 149(1)

The First Proviso to Section 149(1) contains critical saving clauses. It provides that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1 April 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of this section as they stood immediately before the commencement of the Finance Act, 2021. This proviso has been the foundation of numerous successful writ petitions challenging reassessment notices.^[9]

V. Jurisdiction of the Assessing Officer and Approval Requirements

A. Quantum of Escaped Assessment and Corresponding Authority

The jurisdiction of the AO to issue a notice under Section 148 is circumscribed by the quantum of the alleged escaped income, the period that has elapsed since the end of the relevant assessment year, and the hierarchical level of the approving authority. The following table summarizes the approval requirements:

B. Nature of Approval Under Section 151

The Supreme Court in Union of India v. Rajeev Bansal (2024) held that Section 151 imposes a check upon the power of the Revenue authorities to reopen assessments. The provision imposes a responsibility on the authorities to ensure that it obtains the sanction of the specified authority before issuing a notice under Section 148. The purpose behind this safeguard is to save the assessees from harassment resulting from the mechanical reopening of assessments and to provide for the dual check by the higher authority.^[10]

The Delhi High Court in Vinod Kumar Solanki v. ACIT (2024) emphasized that “approval/sanction is neither an empty formality nor a mechanical exercise. The Competent Authority must apply its mind independently on the basis of material placed before it before grant of approval/sanction.” The Court further held that where the PCIT granted a general order of approval for 111 cases without any independent assessment, such approval was a nullity.^[11]

C. Faceless Reassessment Scheme and JAO Jurisdiction

Section 151A empowers the Central Government to notify schemes for faceless assessment, reassessment, and issuance of notices. The E-Assessment of Income Escaping Assessment Scheme, 2022, introduced the requirement that notices under Section 148 shall be issued through automated allocation in accordance with the Risk Management Strategy and in a faceless manner. The Bombay High Court in Hexaware Technologies Ltd. v. ACIT (2024) held that notices issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) were invalid. However, the Delhi High Court took a more nuanced view, holding that the JAO is not completely denuded of jurisdiction to evaluate data and material.^[12]

VI. The Writ Petition Remedy Under Article 226

The writ jurisdiction of the High Court under Article 226 of the Constitution has emerged as the primary remedy for assessees challenging the initiation of reassessment proceedings. The quashing of Section 148 notice by High Court through writ petitions has been upheld as a legitimate and efficacious remedy by the Supreme Court itself in a catena of decisions.

A. Maintainability of Writ Petitions

The Supreme Court in GKN Driveshafts (India) Ltd. v. ITO (2003) 1 SCC 72 laid down the foundational procedure: upon receipt of a notice under Section 148, the assessee must file a return and may simultaneously seek reasons recorded by the AO. After obtaining the reasons, the assessee may file objections, which the AO must dispose of by passing a speaking order. If the AO rejects the objections, the assessee can approach the High Court under Article 226.^[13] After the Finance Act, 2021, the GKN Driveshafts procedure has been substantially codified in Section 148A, making writ petitions directly maintainable against orders passed under Section 148A(d) and consequential notices under Section 148.

B. Circumstances Warranting Writ Jurisdiction

The High Courts have consistently entertained writ petitions in reassessment cases on several broad grounds. These include jurisdictional errors such as notices issued beyond limitation, lack of proper approval under Section 151, or notices issued to non-existent entities. They also include violations of principles of natural justice, such as failure to provide adequate opportunity of hearing, failure to consider the assessee’s reply, or failure to pass a speaking order. Additionally, cases involving patent lack of jurisdiction, such as reassessment based on change of opinion, or borrowed satisfaction without independent application of mind, have been entertained.

C. Limitation on Writ Jurisdiction

It is important to note that the High Court in its writ jurisdiction does not examine the merits of the reassessment. The Court only examines whether the jurisdictional pre-conditions have been satisfied, whether the procedure prescribed by law has been followed, and whether the reasons recorded disclose a rational basis for the formation of belief. The High Court will not substitute its opinion for that of the AO on questions of fact.

VII. Case Laws Where Section 148 Notices Were Quashed

The quashing of Section 148 notice by High Court has developed a rich body of jurisprudence, particularly from the Delhi High Court. The following analysis covers twenty significant decisions that illustrate the various grounds on which reassessment notices have been set aside:

1. Union of India v. Ashish Agarwal (2023) 1 SCC 617 (Supreme Court)

This landmark decision by the Supreme Court arose from multiple High Court judgments, including the Delhi High Court’s decision in Mon Mohan Kohli v. ACIT, which had quashed reassessment notices issued under the unamended provisions after 1 April 2021. The Supreme Court concurred that the amended provisions would apply to all notices issued after 31 March 2021 but, exercising powers under Article 142, directed that all impugned notices be treated as show cause notices under Section 148A(b). This decision established the foundational framework for the new reassessment regime and validated the approach of the Delhi High Court.^[14]

2. Mon Mohan Kohli v. ACIT (Delhi High Court, 16.03.2022)

The Delhi High Court in this batch of writ petitions held that reassessment notices issued under Section 148 after 1 April 2021 under the unamended provisions were invalid. The Court recognized that the Finance Act, 2021 had substituted the reassessment provisions with effect from 1 April 2021, and notices issued without compliance with the new provisions—particularly Section 148A—could not be sustained. This was one of the earliest decisions leading to the quashing of Section 148 notice by High Court on the ground of non-compliance with the amended regime.^[15]

3. Manju Somani v. Income Tax Officer (Delhi High Court, July 2024)

The Delhi High Court quashed the reassessment notice for AY 2016-17, holding that no notice under Section 148 could be issued if more than six years had passed since the end of the relevant assessment year. The Division Bench of Justice Yashwant Varma and Justice Ravinder Dudeja held that the reassessment notice dated 29 April 2024 was legally impermissible since the six-year limitation under the pre-amendment Section 149(1)(b) had expired on 31 March 2023. The Court emphasized that the first proviso to Section 149(1) preserved the earlier time limits for assessment years prior to 2021.^[16]

4. Vinod Kumar Solanki v. ACIT Circle 61-1, Delhi (2024:DHC:6132-DB)

This significant Delhi High Court decision quashed the notice under Section 148 on the ground that the PCIT had granted approval under Section 151 mechanically, by a common order for 111 cases, without recording any independent satisfaction. The Court held that “the satisfaction of the prescribed authority is a sine qua non for a valid approval” and that “while the PCIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal.”^[17]

5. Genpact India Pvt. Ltd. v. ACIT (2024 SCC OnLine Del 6329)

The Delhi High Court quashed the notice under Section 148A(b), the order under Section 148A(d), and the consequential notice under Section 148 for AY 2015-16. The Court held that the Supreme Court’s decision in Ashish Agarwal did not apply to taxpayers who had not challenged the original Section 148 notices in the first round. Since the original notice dated June 2021 was neither quashed nor challenged, the subsequent notice under the new regime constituted fresh proceedings that were beyond limitation. This decision clarified that the quashing of Section 148 notice by High Court could be sustained even where the Revenue claimed continuity of proceedings.^[18]

6. Dinesh Jindal v. AO (Delhi High Court, 2024)

In this case triggered by a search conducted on Proform Interiors Pvt. Ltd., the Delhi High Court quashed the notice under Section 148 for AY 2013-14, holding that the assessment year fell beyond the ten-year block period as set out under Section 153C read with Section 153A. Justice Yashwant Varma held that while Section 153C had ceased to be applicable post 31 March 2021, the first proviso to Section 149(1) preserved the limitation periods that were applicable through Sections 153A and 153C.^[19]

7. ADM Agro Industries v. ACIT (2025:DHC:3375-DB)

The Delhi High Court quashed the notice under Section 148 issued to ADM Agro Industries for AY 2013-14, observing that it was issued after the expiry of the limitation period. The Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia found that the time period for issuance of the notice expired on 16 June 2022, while the impugned notice was issued on 20 July 2022. The Court applied the exclusion principles from Union of India v. Rajeev Bansal (2024) but still found the notice time-barred.^[20]

8. Vinayak Services Pvt. Ltd. v. ITO (Delhi High Court, 2023)

The Delhi High Court quashed the Section 148A(d) order and the consequential Section 148 notice for AY 2014-15 on the ground that the underlying notice was time-barred. The notice dated 28 June 2021 was allegedly dispatched only on 14 July 2021, which rendered the subsequent proceedings beyond limitation. The Court relied on the coordinate bench’s judgment in Suman Jeet Agarwal v. ITO to hold that the limitation aspect was conclusively covered.^[21]

9. Davinder Singh Thapar v. ACIT (Delhi High Court, 2022)

The Division Bench of Justices Jyoti Singh and Anoop Kumar Mendiratta quashed the notice issued under Section 148 against a deceased assessee, Amrit Singh Thapar. Despite the Revenue having issued further notices pursuant to the Supreme Court’s order in Ashish Agarwal, the Court held that notices issued to a dead person are null and void ab initio. The Court reiterated the well-settled proposition that a notice to a deceased person cannot be validated by any subsequent order.^[22]

10. Dharamraj v. Income Tax Officer (Delhi High Court, 2023)

The Delhi High Court in this case held that notice issued under Section 148 of the Act against a dead person is null and void and all consequent proceedings are vitiated and liable to be set aside. This decision further fortified the principle that the requirement of issuing notice to the correct person is a jurisdictional precondition, not a mere procedural formality.^[23]

11. SBC Minerals (P.) Ltd. v. ACIT (Delhi High Court, August 2024)

In this case, the Delhi High Court examined the validity of sanction under Section 151 and quashed the notice under Section 148, holding that the sanction had been granted mechanically and without application of mind. The Court reiterated that the specified authority must independently assess whether the case warrants reassessment and cannot simply rubber-stamp the AO’s proposal.^[24]

12. PCIT v. Pioneer Town Planners (P.) Ltd. (Delhi High Court, February 2024)

The Delhi High Court upheld the quashing of the reassessment notice, holding that the approval granted by the Commissioner under Section 151 was merely formal and lacked independent application of mind. The Court emphasized that the Commissioner must record satisfaction that is discernible from the expression used while affixing approval. This case further strengthened the jurisprudence around quashing of Section 148 notice by High Court on approval-related grounds.^[25]

13. Upinder Kumar Wanchoo v. AO (Delhi High Court, 2024)

The Delhi High Court set aside the order under Section 148A(d) and the consequential Section 148 notice where the AO had failed to consider the detailed reply furnished by the assessee. The petitioner had explained that the firm had been dissolved and converted into a proprietorship, with all documentation submitted. The Court directed the AO to pass a fresh speaking order after affording opportunity of hearing, emphasizing that non-consideration of the assessee’s reply vitiates the entire proceeding.^[26]

14. Ornate Agencies Pvt. Ltd. v. ACIT Circle 19(1) (Delhi High Court, 2023)

The Delhi High Court quashed the order under Section 148A(d) and the consequential notice under Section 148 where the AO had failed to quantify the income chargeable to tax. The order merely stated that “the income to the extent of Rs. 50,00,000 or exceeding Rs. 50,00,000 has escaped assessment” without specifying the exact amount. The Court held that such vague quantification did not satisfy the statutory requirements.^[27]

15. Bharat Agro Overseas (India) v. ACIT Circle 34(1) (Delhi High Court, 2022)

The Delhi High Court quashed the reassessment order passed under Section 148A(d) where proceedings were initiated against a dissolved partnership firm. The firm had ceased to exist and the same name was being used by a proprietorship firm with a different PAN. The Court held that initiating reassessment against a non-existent entity was fundamentally jurisdictional error, though it directed the AO to reconsider the matter.^[28]

16. PCIT v. RMG Polyvinyl (I) Ltd. (Delhi High Court, 2017)

The Delhi High Court held that where information was received from the Investigation Wing that the assessee was a beneficiary of accommodation entries, but no further inquiry was undertaken by the AO, said information could not be considered tangible material per se. The reassessment was quashed as a case of “borrowed satisfaction” where the AO had merely reproduced conclusions from the investigation report without any independent application of mind.^[29]

17. Suman Jeet Agarwal v. Income Tax Officer (2022 SCC OnLine Del 3141)

This was a batch matter before the Delhi High Court that became the foundation for challenging reassessment notices issued under the unamended provisions after 1 April 2021. The Court restrained the Revenue from taking coercive action and the interim orders passed in this case protected numerous assessees from arbitrary reassessment proceedings. The decision was instrumental in establishing the principle that notices issued without following the Section 148A procedure were invalid.^[30]

18. Abhinav Jindal HUF v. ITO (Delhi High Court, 2024)

The Delhi High Court quashed notices under Section 148 for AY 2015-16 on the ground that the sanction had been granted by the Joint Commissioner of Income Tax instead of the Principal Chief Commissioner or other specified authorities as required under Section 151 for notices issued beyond three years from the end of the assessment year. The Court made it clear that approval from an incompetent authority renders the entire reassessment proceeding void.^[31]

19. Ganesh Dass Khanna v. ITO (2024) 460 ITR 546 (Delhi)

The Delhi High Court in this important decision examined the applicability of the amended Section 151 to reassessment notices and held that the validity of sanction must be tested with reference to the amended provisions. The Court quashed notices where the sanction was obtained from authorities specified under the pre-amendment regime instead of those specified in the post-amendment provision, establishing an important precedent for the quashing of Section 148 notice by High Court on the ground of invalid sanction.^[32]

20. ARN Infrastructures India Ltd. v. ACIT Central Circle-28, Delhi (Delhi High Court, 2025)

The Delhi High Court quashed reassessment notices issued under Section 148 for exceeding statutory limits under Section 149(1)(b). The Court clarified that the Supreme Court’s ruling in Abhisar Buildwell does not override the statutory limitations under Sections 147, 148, or the first proviso to Section 149, and reassessment must strictly comply with those provisions. The Court underscored the binding nature of sunset clauses in the Act, reinforcing the principle that time-barred proceedings cannot be saved by judicial observations made in obiter.^[33]

21. Rekha Sharma v. National Faceless Assessment Centre & Ors., [2025 DHC],

The petitioner challenged a series of income-tax proceedings; including a show-cause notice under Section 148A(b), the order under Section 148A(d), reassessment notice under Section 148, assessment order under Section 147, penalty notice (s.274), demand notice (s.156), and recovery notice, all issued in the name of her deceased husband. Relying on the settled principle that proceedings cannot be initiated or continued against a dead person, the Court held the entire chain of actions to be without jurisdiction and accordingly set aside all notices and orders, while granting liberty to the Revenue to initiate fresh proceedings against the petitioner as legal heir, if otherwise permissible in law.^[33A]

VIII. Grounds on Which Section 148 Notices Can Be Quashed

Based on the extensive jurisprudence that has developed around the quashing of Section 148 notice by High Court, the following comprehensive categorization of grounds emerges:

A. Procedural Grounds

1. Non-Compliance with Section 148A Procedure

Failure to issue show cause notice under Section 148A(b); failure to provide minimum seven days to respond; failure to consider the assessee’s reply; failure to pass a reasoned speaking order under Section 148A(d); failure to provide material relied upon along with the notice.

2. Invalid or Mechanical Approval Under Section 151

Approval granted as a mere formality without independent application of mind; approval granted by a common order for multiple cases without individual assessment; approval by an authority not competent under the applicable version of Section 151; the approving authority merely writing “Approved” or “I am satisfied” without any reasoning.

3. Non-Service of Proper Notice

Notice issued to a deceased person; notice issued to a dissolved or non-existent entity; notice issued without proper DIN (Document Identification Number) in contravention of CBDT Circular No. 19/2019; notice not served within the prescribed limitation period.

B. Jurisdictional Grounds

4. Notices Issued Beyond Limitation

Notice issued beyond three years and three months (for escaped income below ₹50 lakhs); notice issued beyond five years and three months (for escaped income above ₹50 lakhs); non-compliance with the first proviso to Section 149(1) regarding preservation of earlier limitation periods for pre-2021 assessment years.

5. No Information Suggesting Escaped Income

Reassessment based on mere suspicion rather than credible information; no tangible material to form the basis of the opinion that income has escaped assessment; the information does not establish a live link with the alleged escaped income.

6. Change of Opinion

Reassessment on the same facts and materials that were available during the original assessment; the Supreme Court in CIT v. Kelvinator of India Ltd. (2010) 2 SCC 723 categorically held that reassessment proceedings cannot be used to merely review the original assessment on a change of opinion.^[34]

7. Borrowed Satisfaction

The AO mechanically relied on information from the Investigation Wing, Insight Portal, or RMS alerts without any independent verification or application of mind. The reasons recorded are merely reproductions of conclusions found in external reports without any independent assessment by the AO.

8. Issuance by Jurisdictional AO Instead of Faceless AO

Where the E-Assessment of Income Escaping Assessment Scheme, 2022 requires notices to be issued through the faceless mechanism under Section 151A, notices issued by the JAO may be invalid, though this position is subject to divergent views between different High Courts.

C. Substantive Grounds

9. Failure to Quantify Escaped Income

Where the order under Section 148A(d) does not specify the exact quantum of escaped income or merely states that the income is “₹50 lakhs or more” without providing precise figures, the reassessment may be quashed for vagueness.

10. Simultaneous Reassessment Notices

It is settled law that during the subsistence of a reassessment proceeding, another reassessment notice cannot be issued for the same assessment year, as held by the Delhi High Court relying on CIT v. Sanjay Kumar Garg (2015).^[35]

11. Contravention of Block Assessment Provisions

In search cases, reassessment notices that contravene the block period limitations under Sections 153A and 153C may be quashed, even after these provisions ceased to be independently applicable post 31 March 2021, by virtue of the saving clauses in Section 149.

IX. Practical Guidance for Assessees

For assessees who receive a notice under Section 148A(b) or Section 148, the following practical steps are recommended to protect their rights and, if warranted, pursue the remedy of quashing of Section 148 notice by High Court:

Verify Limitation: The first step should be to verify whether the notice has been issued within the prescribed limitation period under Section 149. Calculate the exact number of years and months from the end of the relevant assessment year and check whether the applicable time limit (three years and three months or five years and three months) has been complied with.

Check Approval Authority: Verify whether the approval under Section 151 has been obtained from the correct specified authority. If the notice is issued beyond three years from the end of the assessment year, the approval must be from a higher authority than for notices within three years.

Examine Show Cause Notice: Check whether the show cause notice under Section 148A(b) has provided: (i) the specific information relied upon; (ii) the material evidence; (iii) adequate time to respond (minimum seven days); and (iv) clear particulars of the income alleged to have escaped assessment.

File Comprehensive Reply: File a detailed reply within the prescribed time, addressing every allegation with supporting documentation. Raise all legal objections including limitation, change of opinion, borrowed satisfaction, and procedural non-compliance.

Examine the Section 148A(d) Order: Upon receipt of the order under Section 148A(d), examine whether it is a speaking order that deals with all objections raised, whether it records valid reasons, and whether it specifies the quantum of escaped income.

File Writ Petition If Warranted: If any of the grounds discussed in this article are made out, the assessee should promptly file a writ petition under Article 226 before the jurisdictional High Court, seeking quashing of the notice and/or the order. Simultaneously, file an application for interim stay of the reassessment proceedings.

X. Conclusion

The law of reassessment under the Income Tax Act has undergone a paradigm shift since the Finance Act, 2021. The introduction of Section 148A has infused the reassessment process with procedural safeguards that were previously available only through judicial intervention. The requirement of a pre-notice inquiry, show cause notice, opportunity of hearing, and a speaking order before issuance of any Section 148 notice represents a significant advancement in taxpayer protection.

The extensive jurisprudence on the quashing of Section 148 notice by High Court, particularly from the Delhi High Court, demonstrates that the judiciary has played a pivotal role in ensuring that the reassessment power is exercised within the bounds of law. From the foundational principles laid down in GKN Driveshafts and Kelvinator to the transformative decisions in Ashish Agarwal and Rajeev Bansal, the courts have consistently upheld the principle that reassessment is an exceptional power that must be exercised with care, restraint, and strict adherence to statutory procedure.

The Finance Act, 2024, by reducing the outer limitation from ten years to five years and three months, has further narrowed the window for reassessment, reflecting the legislative intent to balance revenue interests with taxpayer certainty. However, the effectiveness of these reforms depends largely on the rigorous application of procedural safeguards by the Revenue authorities and continued vigilant judicial oversight.

For assessees faced with reassessment notices, the writ petition remedy under Article 226 remains an indispensable tool. The rich and evolving jurisprudence on reassessment provides multiple grounds—from limitation defects to approval irregularities, from change of opinion to borrowed satisfaction—on which notices can be successfully challenged. As the law continues to evolve, the principles of procedural fairness, jurisdictional compliance, and the rule of law will remain the touchstones against which every reassessment action must be measured.

FAQ: Frequently Asked Questions

1. What does it mean to quash a Section 148 notice?

Answer:
It means the High Court sets aside an invalid or unlawful reassessment notice issued under Section 148, stopping the reopening of the assessment.

2. On what grounds can the High Court quash a Section 148 notice?

Answer:
Common grounds: expired limitation, no valid “reason to believe,” non-compliance with Section 148A, mechanical approval, or lack of jurisdiction.

3. What is the limitation period for issuing a Section 148 notice?

Answer:
Generally 3–4 years, extendable only if statutory conditions under Section 149 are met. Notices beyond limitation are often quashed.

4. How did Section 148A change reassessment?

Answer:
It introduced mandatory pre-notice steps: providing information, giving the assessee a hearing, and passing a 148A(d) order. Without these, notices are quashed.

5. Can invalid approval under Section 151 lead to quashing?

Answer:
Yes. Courts quash notices where approval is mechanical, rubber-stamped, or not based on material.

6. Can the High Court quash a notice even if income may have escaped assessment?

Answer:
Yes. Escapement alone is not enough—procedure and jurisdiction must still be valid.

7. Can a Section 148 notice be challenged at the notice stage?

Answer:
Yes. High Courts routinely quash defective notices even before reassessment begins.

8. What is a jurisdictional error in Section 148 cases?

Answer:
When the notice is issued by an officer without authority or beyond statutory power—such notices are void and quashed.

9. Can a writ petition be filed against Section 148A proceedings?

Answer:
Yes. Writs under Article 226 can challenge defective 148A(b)/(d) orders and illegal reassessment attempts.

10. What kinds of High Court rulings commonly quash Section 148 notices?

Answer:
Cases involving limitation breaches, change of opinion, missing 148A procedure, and invalid approvals.

Endnotes

[1] Union of India v. Ashish Agarwal (2023) 1 SCC 617; Civil Appeal No. 3005/2022, decided on 04.05.2022.

[2] Section 147, Income Tax Act, 1961 as substituted by the Finance Act, 2021, w.e.f. 01.04.2021.

[3] Section 148, Income Tax Act, 1961 as substituted by the Finance Act, 2021, w.e.f. 01.04.2021.

[4] GKN Driveshafts (India) Ltd. v. Income Tax Officer & Ors. (2003) 1 SCC 72.

[5] Section 149(1), Income Tax Act, 1961 as amended by the Finance (No. 2) Act, 2024, w.e.f. 01.09.2024.

[6] Section 151, Income Tax Act, 1961 as reframed by the Finance (No. 2) Act, 2024, .

[7] Section 149(1)(a), Income Tax Act, 1961 as amended by the Finance (No. 2) Act, 2024, .

[8] Section 149(1)(b), Income Tax Act, 1961 as amended by the Finance (No. 2) Act, 2024,

[9] First Proviso to Section 149(1), Income Tax Act, 1961 as inserted by the Finance Act, 2021.

[10] Union of India v. Rajeev Bansal (2024) SCC OnLine SC 2693.

[11] Vinod Kumar Solanki v. ACIT Circle 61-1, Delhi (2024:DHC:6132-DB).

[12] Hexaware Technologies Ltd. v. ACIT (Bombay High Court, 2024) 162 taxmann.com 225; cf. Delhi High Court decision in Suman Jeet Agarwal batch.

[13] GKN Driveshafts (India) Ltd. v. ITO (2003) 1 SCC 72. (ibid. 4)

[14] Union of India v. Ashish Agarwal (2023) 1 SCC 617, para 6. (ibid. 1)

[15] Mon Mohan Kohli v. ACIT (Delhi High Court, 16.03.2022); upheld in Ashish Agarwal (ibid).

[16] Manju Somani v. Income Tax Officer (Delhi High Court, July 2024); reported in Taxscan.

[17] Vinod Kumar Solanki v. ACIT (2024:DHC:6132-DB); reported in Verdictum.

[18] Genpact India Pvt. Ltd. v. ACIT (2024 SCC OnLine Del 6329), decided on 09.09.2024.

[19] Dinesh Jindal v. AO (Delhi High Court, 2024); reported in TaxConcept.

[20] ADM Agro Industries v. ACIT (2025:DHC:3375-DB); reported in Verdictum.

[21] Vinayak Services Pvt. Ltd. v. ITO (Delhi High Court, 2023); reported in TaxGuru.

[22] Davinder Singh Thapar v. ACIT (Delhi High Court, 2022); reported in LiveLaw.

[23] Dharamraj v. Income Tax Officer (Delhi High Court, 2023).

[24] SBC Minerals (P.) Ltd. v. ACIT (Delhi High Court, August 2024).

[25] PCIT v. Pioneer Town Planners (P.) Ltd. (Delhi High Court, February 2024) (2024) SCC OnLine Del 1685.

[26] Upinder Kumar Wanchoo v. AO (Delhi High Court, 2023:DHC:3603-DB); reported in TaxGuru.

[27] Ornate Agencies Pvt. Ltd. v. ACIT Circle 19(1), New Delhi (Delhi High Court, 2023) W.P.(C) 3671/2023.

[28] Bharat Agro Overseas (India) v. ACIT Circle 34(1) (Delhi High Court, 2022) W.P. No. 17455/2022.

[29] PCIT v. RMG Polyvinyl (I) Ltd. (2017) 83 taxmann.com 348 (Delhi).

[30] Suman Jeet Agarwal v. Income Tax Officer (2022 SCC OnLine Del 3141).

[31] Abhinav Jindal HUF v. ITO (Delhi High Court, 2024); cf. Ganesh Dass Khanna v. ITO (2024) 460 ITR 546 (Delhi).

[32] Ganesh Dass Khanna v. ITO (2024) 460 ITR 546 (Delhi); 2023 SCC OnLine Del 7286.

[33] ARN Infrastructures India Ltd. v. ACIT Central Circle-28, Delhi (Delhi High Court, 2025); reported in MetaLegal.

^[33A] Rekha Sharma v. National Faceless Assessment Centre & Ors., [W.P.(C) 9811/2023, Delhi High Court],

[34] CIT v. Kelvinator of India Ltd. (2010) 2 SCC 723.

[35] CIT v. Sanjay Kumar Garg (2015) 9 TMI 390 (Delhi High Court).

──────────────────────────────────

Disclaimer: This article is intended for informational and educational purposes only and does not constitute legal advice. Readers should consult qualified tax professionals or legal counsel for advice specific to their circumstances. The law stated herein is as of February 2026 and may be subject to subsequent amendments or judicial developments.