Section 148A reassessment cannot rest on undisclosed material or grounds beyond the show-cause notice.

The petitioner, a partner in multiple firms, challenged proceedings concerning Assessment Year 2021–22.

A notice under Section 148A(1) of the Income Tax Act, 1961, dated 27 March 2026, alleged that business turnover of ₹13,39,14,241 had not been disclosed in his return; it was issued four days before the limitation period under Section 149(1)(b) expired.

The petitioner replied that the alleged amount arose from a difference between bank credits and turnover, and that not all bank credits constituted turnover.

He supplied documents and offered to provide further clarification.

The first respondent granted approval and the second respondent made an order under Section 148A(3), followed by a notice under Section 148.

The petitioner challenged those steps, including on the grounds that the order relied on matters not raised in the show-cause notice and that the computation and supporting information had not been provided.

Sections 148A(1) and 148A(3) of the Income Tax Act govern the notice and the decision whether it is fit to issue a reassessment notice; the affected taxpayer must have a meaningful opportunity to respond to the material and propositions relied upon.

Sections 147 and 148 concern reassessment and the consequential notice, while Section 149(1)(b) prescribes the relevant limitation period and Section 151 requires specified-authority approval.

The Court’s reasoning applied the principles of notice and fair opportunity: a Section 148A(3) determination should rest on disclosed, sufficiently specific material, rather than undisclosed propositions that could turn the reassessment into a roving enquiry.

No judicial precedents were cited.

Although the initial notice identified the alleged undisclosed turnover, the petitioner’s response specifically disputed treating all bank credits as turnover and asked for clarification about how the figure had been calculated.

The Revenue did not provide that clarification, even though the assessing authority could have sought further details before deciding whether reassessment was warranted.

The Section 148A(3) order also introduced assertions about the petitioner’s firms, alleged fund parking and profit rotation, expenses, and interest on unsecured loans—matters not put to him in the show-cause notice.

The Court concluded that deciding the matter without the computation and supporting information, and without an opportunity to answer those propositions, risked a roving rather than focused enquiry.

It also noted an irregularity in the prior-approval record, but chose to restore the proceedings for proper consideration rather than terminate them entirely.

The Court quashed the Section 148A(3) order, the prior approval under Sections 148A(3) and 151, and the consequential notice, restoring the proceedings to the second respondent for reconsideration.

Upon receiving a certified copy of the order, the second respondent was directed to furnish the computation of ₹13,39,14,241 and the information supporting it, and to give the petitioner a reasonable opportunity to respond in light of that material and the observations in the impugned order.

The petitioner was permitted to serve the certified copy by 30 October 2026; all contentions were left open.