A S BANKA ADVISORS

If your firm has open Section 148 reassessment notices on its desk on April 1, 2026, the Income-tax Act 2025 changes nothing about how those files are handled. That is the load-bearing message of the CBDT FAQ Deep-Dive on Section 147-148 reassessment continuity. For founders, CFOs, and tax practitioners, the practical question is not “what changes” but “what discipline do I impose on my team to make sure nothing accidentally drifts into the new statute.”

The Saving-Clause Architecture, in Plain English

Section 536 of the Income-tax Act 2025 is the saving clause. It does the heavy lifting that prevents every open file from going into legal limbo on April 1. For reassessment, four sub-clauses do the work: 536(1) saves accrued liabilities and refund rights, 536(2) preserves pending investigations and proceedings, 536(3) locks the period of limitation, and 536(7) preserves actions already taken under 1961 Act powers (Section 151 sanctions, Section 144B drafts, Section 142(1) inquiries).

The result: any Section 148 notice issued on or before March 31, 2026, lives entirely under Sections 147, 148, 148A, 149, 150, 151, and 153 of the 1961 Act. The taxpayer reply, the Section 148A(d) order, the draft assessment under Section 144B, the final order, the appeal to CIT(A) and ITAT, and any subsequent High Court reference all proceed under the prior statute. There is no migration to 2025 Act sections at any stage of that chain.

What Founders Should Watch For

If you receive a Section 148 notice in the next twelve months, the framework that governs your reply is unchanged. The seven-day minimum show-cause window under Section 148A applies. The three-year (routine) and ten-year (Rs 50 lakh+ escaped income) outer limits under Section 149 apply. The Section 153 twelve-month assessment-completion clock applies, with extensions when the Faceless Assessment Centre refers the matter to a Dispute Resolution Committee or Transfer Pricing Officer.

Two situations to watch for: (1) Your prior advisor cites 2025 Act section numbers in your reply or appeal memo. The appellate authority applies 1961 Act jurisprudence; mixed citations create avoidable jurisdictional confusion. (2) Your team treats a Section 151 sanction granted before April 1 as expired because the Section 148 notice was dispatched a few days into April. The CBDT FAQ confirms a seven-working-day dispatch corridor. No re-sanction trip is required.

TOLA and Ashish Agarwal Cases Continue Under the 1961 Act

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 extended limitation deadlines during COVID-19. The Supreme Court’s Union of India v. Ashish Agarwal directive (May 4, 2022) converted certain time-barred notices into Section 148A show-cause notices. Both mechanisms continue to operate within the 1961 Act framework. A TOLA-saved Section 148 notice issued in June 2021, converted under Ashish Agarwal, with the consequent Section 148A(d) order issued in April 2026 is still a 1961 Act file end-to-end.

Action Plan for Your Team This Week

1. Inventory every open Section 148 notice by Assessment Year, sanction date, show-cause date, notice date, and current stage.
2. Annotate the file cover note: “Governed by Sections 147 to 153 of the Income-tax Act 1961 read with Section 536 of the Income-tax Act 2025.”
3. Confirm Section 151 specified-authority sanction was obtained on or before March 31, 2026.
4. Verify the Section 149 outer time-limit per AY (3-year routine vs 10-year extended for Rs 50 lakh+ escaped income).
5. Calculate the remaining Section 148A reply window (minimum 7 days from show-cause).
6. Save Chapter 4 of the CBDT FAQ (April 2026 edition, pages 27-41) in every reassessment working folder.
7. Issue a one-pager to each affected client confirming the 2025 Act enactment changes nothing on their open notice.
8. Tag TOLA + Ashish Agarwal cohort files separately for cross-referencing.

The Long-Tail Implication

Section 536 protection is not selective. The ten-year extended band for AY 2022-23 escaped income (Rs 50 lakh+) does not close until March 31, 2033. This means 1961 Act reassessment files will continue to be opened, completed, appealed, and litigated for the next seven years, even as the 2025 Act becomes the default framework for all FY 2026-27 onwards income. Two parallel statutes, both load-bearing, both citation-disciplined, both requiring practitioner attention.

The carousel below maps the eight-step practitioner action plan, the Section 536 sub-clauses, and the stakeholder-specific implications. Download it for your team’s working file.

Download the full carousel PDF

Need Help Navigating This?

If your firm has open Section 148 notices, transfer-pricing reassessments under Section 92CE, or cross-border reassessment exposure tied to FEMA, the citation discipline matters more than the substance. A wrong section number in an ITAT memo costs cases. Talk to an expert and book a quick call to walk through your open files.