Reopening Pre-April 2026 Years: How Sections 147 to 151 Continue Under Section 536(2)(c)
The Income-tax Act, 2025 came into force on 1 April 2026 and repealed the Income-tax Act, 1961. Reopening of an assessment year that ended before that date does not move to the new law. This post sets out what Section 536 of the Income-tax Act, 2025 and Topic 5 of the CBDT “FAQs on Interplay and Transition from the Income Tax Act, 1961 to the Income Tax Act, 2025” (updated 2 April 2026) say about reassessment under Sections 147 to 151, and how those sections read as on 15 May 2026.
Key Takeaways
- Section 536(2)(c) of the Income-tax Act, 2025 keeps the 1961 Act, and its procedure, for proceedings pending on 1 April 2026 and for proceedings started on or after that date for any tax year beginning before 1 April 2026. In practice this means assessment year (AY) 2026-27 and every earlier year.
- A show-cause notice under Section 148A(1) issued before 1 April 2026 can be followed by the Section 148A(3) order and the Section 148 notice after that date, within the Section 149 time limits (CBDT FAQ Q5.12).
- For notices issued now, Section 149 allows a Section 148A show-cause notice within 3 years from the end of the AY (5 years where escaped income is Rs 50 lakh or more) and a Section 148 notice within 3 years and 3 months (5 years and 3 months).
- The specified authority under Section 151 is the Additional Commissioner, Additional Director, Joint Commissioner or Joint Director (CBDT FAQ Q5.13).
- Sections 279 to 286 of the Income-tax Act, 2025 apply only from tax year 2026-27 onwards (CBDT FAQ Q5.6).
Which Act Governs Reassessment of Earlier Years
Section 536(1) of the Income-tax Act, 2025 repeals the 1961 Act. Section 536(2)(c) then provides that the repealed Act “shall continue to apply to any proceeding pending on the date of commencement of this Act and to any proceedings initiated on or after the 1st April, 2026 (including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals) in respect of any tax year beginning before the 1st April, 2026”, and that such proceedings “shall be carried out as per the procedure specified in the repealed Income-tax Act”.
Under Section 536(3) of the Income-tax Act, 2025, a reference to the tax year commencing on 1 April 2025, or any earlier tax year, is read as a reference to the corresponding previous year under the 1961 Act. Previous year 2025-26 is AY 2026-27, so AY 2026-27 is the last year reopened under Sections 147 to 151. The CBDT FAQ says the same: for any tax year beginning before 1 April 2026, “only the old Act provisions will apply for reassessment” (Q5.6), and reassessment “can still be initiated and completed under the old Act for earlier Assessment Years till A.Y.2026-27” (Q5.11). The FAQ’s own example: in FY 2027-28 the department can reopen AY 2023-24 under the old Act if the 1961 Act conditions for reopening are met.
Section 536(4) of the Income-tax Act, 2025 adds that, without prejudice to sub-section (2), Section 6 of the General Clauses Act, 1897 applies to the effect of the repeal. CBDT FAQ Q1.16 describes this as the provision for situations that the clauses of Section 536(2) do not directly address.
Proceedings Already Running on 1 April 2026
CBDT FAQ Q5.10 relies on Section 536(2)(c) of the Income-tax Act, 2025 to confirm that reassessment proceedings started under Section 147 or 148 and pending on 1 April 2026 continue under the 1961 Act. Its example: a Section 148A(1) notice to Mr. X for AY 2023-24 in December 2025, a Section 148 notice in February 2026, and the reassessment “will be completed under the old Act, even though the assessment order may be passed after 01.04.2026”.
Where only the show-cause notice was issued before 1 April 2026, FAQ Q5.12 says the whole sequence of consequential actions, “including the order under section 148A (3) and notice under section 148”, is governed by the 1961 Act, “subject to compliance with the limitation period prescribed under section 149”. Its example is a show-cause notice for AY 2022-23 dated 20 March 2026, an order under Section 148A(3) on 15 April 2026 and a Section 148 notice on 30 April 2026, all treated as valid.
If a Section 148 notice was issued before 1 April 2026 and the return in response has not been filed, FAQ Q5.14 says the return is still furnished under the 1961 Act framework, within the time specified in the notice, in the ITR form corresponding to the 1961 Act.
The Reassessment Procedure Under the 1961 Act
Because Section 536(2)(c) of the Income-tax Act, 2025 preserves the procedure of the repealed Act, the steps are those in Sections 147 to 151 as they stand after the amendments made with effect from 1 September 2024 and by the Finance Act, 2026.
Information and the show-cause notice
- A Section 148 notice can be issued only if the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment (first proviso to Section 148(1)).
- Section 148(3) defines that information: information under the Board’s risk management strategy, an audit objection, information received under an agreement referred to in Section 90 or 90A, information under the scheme notified under Section 135A, information requiring action in consequence of a Tribunal or Court order, and information from a survey under Section 133A (other than Section 133A(2A)) conducted on or after 1 September 2024.
- Before issuing a Section 148 notice, the Assessing Officer must serve a show-cause notice under Section 148A(1), accompanied by that information. The assessee may reply within the period specified in the notice (Section 148A(2)).
- The Assessing Officer then passes an order under Section 148A(3), with the prior approval of the specified authority, deciding whether it is a fit case to issue a Section 148 notice.
- Section 148A does not apply where the information was received under the Section 135A scheme (Section 148A(4)). In that case, the second proviso to Section 148(1) still requires prior approval of the specified authority before the Section 148 notice is issued.
The Section 148 notice and the return
The Section 148 notice is issued with a copy of the Section 148A(3) order and asks for a return within the period specified in it. With effect from 30 March 2026, that period cannot be less than thirty days from the date of the notice, and it cannot exceed three months from the end of the month in which the notice is issued (Section 148(1)). Under the proviso to Section 148(2), a return furnished after the period specified in the notice is not deemed to be a return under Section 139.
Who approves and who issues
Section 151 names the specified authority for Sections 148 and 148A: the Additional Commissioner, Additional Director, Joint Commissioner or Joint Director. CBDT FAQ Q5.13 confirms that this hierarchy applies to reassessment notices for AY 2026-27 and earlier years issued after 1 April 2026.
Section 147A, inserted by the Finance Act, 2026 with retrospective effect from 1 April 2021, clarifies that the Assessing Officer for Sections 148 and 148A means an Assessing Officer other than the National Faceless Assessment Centre or an assessment unit referred to in Section 144B(3).
Once a case is reopened, the Explanation to Section 147 allows the Assessing Officer to assess any other issue that escaped assessment and comes to notice during the proceedings, even though Section 148A was not followed for that issue.
Time Limits Under Section 149
Section 149, as substituted with effect from 1 September 2024, sets two limits: one for the show-cause notice and one for the Section 148 notice. Both run from the end of the relevant assessment year.
| Notice | General limit | Extended limit | Condition for the extended limit |
|---|---|---|---|
| Show-cause under Section 148A(1) | 3 years | Up to 5 years | Escaped income, as per the information with the Assessing Officer, “amounts to or is likely to amount to fifty lakh rupees or more” (Section 149(2)(b)) |
| Notice under Section 148 | 3 years and 3 months | Up to 5 years and 3 months | The Assessing Officer has books of account or other documents or evidence showing escaped income that “amounts to or is likely to amount to fifty lakh rupees or more” (Section 149(1)(b)) |
Illustration. The last dates below are worked out from Section 149 alone. They ignore Section 150 and any other provision that changes the limit in a particular case.
| AY | AY ends | Section 148A(1) notice by (general / Rs 50 lakh or more) | Section 148 notice by (general / Rs 50 lakh or more) |
|---|---|---|---|
| 2022-23 | 31 March 2023 | 31 March 2026 / 31 March 2028 | 30 June 2026 / 30 June 2028 |
| 2023-24 | 31 March 2024 | 31 March 2027 / 31 March 2029 | 30 June 2027 / 30 June 2029 |
| 2024-25 | 31 March 2025 | 31 March 2028 / 31 March 2030 | 30 June 2028 / 30 June 2030 |
| 2026-27 | 31 March 2027 | 31 March 2030 / 31 March 2032 | 30 June 2030 / 30 June 2032 |
This is why the FAQ Q5.12 example works: for AY 2022-23 the general show-cause window closed on 31 March 2026, the show-cause notice was issued on 20 March 2026, and the Section 148 notice of 30 April 2026 fell before the 30 June 2026 limit. After 31 March 2026, a new show-cause notice for AY 2022-23 is possible only in the Rs 50 lakh or more band.
Section 150, as substituted by the Finance Act, 2026 with retrospective effect from 1 February 2026, is the exception. A Section 148 notice may be issued at any time to make an assessment in consequence of, or to give effect to, a finding or direction in an order passed by an authority in appeal, reference or revision, or by a court (Section 150(1)). Such a notice must be issued within three months from the end of the quarter in which the jurisdictional Principal Commissioner or Commissioner receives a certified copy of the order (Section 150(3)). Section 150(2) excludes years that were already time-barred at the relevant time.
Notices From Before 1 September 2024
Within the 1961 Act, older cases may still run under the earlier version of Sections 147 to 151. Section 152(4) provides that where a Section 148 notice was issued, or an order under clause (d) of Section 148A was passed, before 1 September 2024, the case is governed by Sections 147 to 151 as they stood before the Finance (No. 2) Act, 2024. Section 152(3) applies the same pre-amendment provisions where a search under Section 132, a requisition under Section 132A or a survey under Section 133A (other than Section 133A(2A)) took place on or after 1 April 2021 but before 1 September 2024. For these files, check which version of Section 148A and Section 149 applies before citing a clause or time limit.
Completing the Reassessment
Under Section 153(2), read with its proviso, an order under Section 147 must be made within twelve months from the end of the financial year in which the Section 148 notice was served. Explanation 1 to Section 153 excludes certain periods, such as a period of stay granted by a court, when computing this limit, and the period is extended by twelve months where a search or requisition is initiated while the reassessment is pending (Section 153(3A)) or a reference is made to the Transfer Pricing Officer under Section 92CA(1) (Section 153(4)). Section 152(1) charges tax at the rate at which it would have been charged had the income not escaped assessment.
Illustration. In the FAQ Q5.12 example, the Section 148 notice dated 30 April 2026 falls in FY 2026-27, which ends on 31 March 2027. Assuming it is served in April 2026 and no exclusion or extension applies, the reassessment order must be made by 31 March 2028.
Penalty, Appeals and Search Cases
- Penalty: Section 536(2)(d) of the Income-tax Act, 2025 allows penalty proceedings for any tax year beginning before 1 April 2026 to be initiated and completed under the 1961 Act “as if this Act had not been enacted”. FAQ Q5.16 applies this to penalties arising from reassessment of earlier years.
- Pending appeals: Section 536(2)(e) of the Income-tax Act, 2025 continues any appeal pending on 1 April 2026 before an income-tax authority, the Appellate Tribunal or a court, to be disposed of as if the new Act had not been enacted. FAQ Q7.4 adds that no new appeal needs to be filed.
- New appeals: An appeal filed after 1 April 2026 against a reassessment order for AY 2026-27 or earlier is governed by the 1961 Act under Section 536(2)(c) of the Income-tax Act, 2025 (FAQ Q7.5).
- Expired limitation: Section 536(2)(k) of the Income-tax Act, 2025 does not revive an appeal, application, reference or revision whose period had expired on or before 1 April 2026 merely because the new Act prescribes a longer period (FAQ Q7.6).
- Search cases: Where a search under Section 132 was initiated, or a requisition under Section 132A was made, before 1 April 2026, Section 536(2)(v) of the Income-tax Act, 2025 keeps all connected proceedings under the 1961 Act.
Parallel Proceedings and the New Act’s Provisions
CBDT FAQ Q5.15 confirms that the Assessing Officer can run a reassessment for AY 2024-25 under the 1961 Act and an assessment for tax year 2026-27 under the Income-tax Act, 2025 for the same assessee at the same time, because they are independent proceedings for different periods.
FAQ Q5.1 maps Sections 147, 148, 148A, 149, 150, 151, 152 and 153 to Sections 279, 280, 281, 282, 283, 284, 285 and 286 of the Income-tax Act, 2025. Those sections apply from tax year 2026-27. Their time limits run from the end of the tax year: 4 years for a show-cause notice under Section 281 and 4 years and 3 months for a notice under Section 280, extended to 6 years and 6 years and 3 months where escaped income is Rs 50 lakh or more (Section 282 of the Income-tax Act, 2025). No notice under either section can be issued within one year from the end of a tax year (Section 282(3) of the Income-tax Act, 2025).
Common Errors in Reassessment Files for Earlier Years
- Citing Section 536 by a clause number that does not exist. The provision has sub-sections (1) to (4), and only sub-section (2) has lettered clauses, (a) to (v); the reassessment saving is Section 536(2)(c), and penalty, pending appeals and search cases are Section 536(2)(d), (e) and (v).
- Applying the pre-September 2024 time limits or approval authorities to a notice issued now. For current notices, Section 149 and Section 151 in their present form apply, unless Section 152(3) or 152(4) takes the case back to the earlier provisions.
- Referring to an order under “Section 148A(d)” in a current proceeding. That clause belongs to the pre-September 2024 version; the current order is under Section 148A(3).
- Citing Sections 279 to 286 of the Income-tax Act, 2025 in a reply or appeal for AY 2026-27 or an earlier year.
- Filing the return after the period in the Section 148 notice. Under the proviso to Section 148(2), such a return is not treated as a return under Section 139.
Related Posts
- ITR forms for AY 2026-27: why FY 2025-26 returns are filed under the 1961 Act
- Depreciation and unabsorbed allowances across the 2026 transition
Need a Review of Your Reassessment Position?
If you have received a show-cause notice under Section 148A or a notice under Section 148 for AY 2026-27 or an earlier year, and want the time limits, approvals and reply reviewed, talk to an expert from the Tax Update India team.
Sources: Income-tax Act, 2025, Section 536 and Sections 279 to 286 (as amended by the Finance Act, 2026); Income-tax Act, 1961, Sections 147 to 153 (as amended by the Finance Act, 2026); CBDT, FAQs on Interplay and Transition from the Income Tax Act, 1961 to the Income Tax Act, 2025 (updated 2 April 2026), Topics 1, 5 and 7.
Disclaimer: This article is for general information only and does not constitute legal or tax advice. Tax positions depend on the facts of each case. Section numbers refer to the Income-tax Act, 1961 unless otherwise stated. Consult a qualified professional before acting on any information here.