In plain words: reassessment is the power to reopen a past year because income 'escaped assessment' — and it worries taxpayers who thought a year was closed.
What 'income escaping assessment' means
If the department has information suggesting that some income was not taxed in a past year — whether or not you filed — it can reopen that year under Section 147 and reassess, following the prescribed procedure.
Common triggers
- Information about undisclosed transactions or assets.
- Mismatch with third-party data (AIS, SFT, banks).
- Findings from a search or survey.
- Foreign asset/income information.
It's not a free re-look
Reassessment is not a licence to revisit a year at will. It needs 'information' and must follow the Section 148/148A procedure, within time limits and with sanction (covered separately).
The change-of-opinion bar
A year cannot be reopened merely because the department now takes a different view of the same facts — a 'change of opinion' is not a valid ground (covered separately).
What to do if a year is reopened
- Check the 'information' and the procedure followed.
- Verify time limits and sanction.
- Respond with facts and documents.
- Raise legal objections where the basis is weak.
Frequently asked questions
Can the department reopen a closed year? Yes — under Section 147 where income escaped assessment, following the procedure.
Can they reopen on a whim? No — it needs 'information', within time limits and with sanction.
Is a change of view enough? No — a mere change of opinion is not valid.
How Vakil Help Desk helps
Vakil Help Desk advises on income-tax searches and surveys, Section 148/148A reassessment notices, search assessments, penalty and prosecution — and represents clients before the tax authorities, CIT(A), the ITAT and the High Courts. If you are facing a raid, a notice or a reassessment, we can help you respond correctly.
This article is for general legal awareness, not individual legal advice. Income-tax search, seizure and reassessment law, the time limits and the procedure are revised by the Finance Acts and clarified by the courts from time to time, and the right step depends on your facts and the current position. Please consult a professional before responding to a search, notice or reassessment.