Old ITR Reopened? Your Rights Under Section 148

The income tax department can reopen old returns using Section 148 notices, but strict time limits apply. If your notice arrives late, you can legally challenge it and get it cancelled — even if you owe tax.

Here's what happened: Mumbai's Income Tax Appellate Tribunal cancelled a reassessment notice for AY 2015-16, ruling it was issued beyond the legally permitted deadline even after accounting for Covid-era TOLA extensions.. Section 148 of the Income Tax Act allows the tax department to reopen filed returns if it believes income has escaped assessment, but strict time limits govern how long it can wait before sending that notice.. Penny stock transactions are a common trigger for reassessment notices — the department often treats sudden gains in low-value stocks as unexplained income, targeting returns from 5–8 years ago..

What you should do: Check the date on any Section 148 notice you receive — if it relates to AY 2015-16 or earlier and arrived after March 2023, consult a tax advocate immediately about challenging its validity.. File a response within 30 days of receiving a Section 148 notice (as required), but simultaneously raise written objections on limitation grounds to the Assessing Officer before the case proceeds.. Keep all records of stock transactions, broker contract notes, and bank statements for at least 10 years — penny stock trades in particular are scrutinised long after you think the window has closed..

You can file objections against a reassessment notice's validity before the Assessing Officer — and if rejected, take it to the High Court via a writ petition without waiting for the full assessment to complete.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.