New IT Act 2025 — Knowledge Bank

Issue of notice where income has escaped assessment

Section 280 — Issue of notice where income has escaped assessment

Old Act equivalent: Section 148, 148A of IT Act 1961 Sub-part: C.—Income escaping assessment

Statutory Text

  1. 	(1)(a) Before making the assessment, reassessment or recomputation under 
	 	 	section 279, the Assessing Officer shall, subject to the provisions of section 281,

issue a notice to the assessee, along with a copy of the order passed under section 281(3); (b) the notice referred to in clause (a) shall require the assessee to furnish, within such period as may be specified therein, a return of his income or income of any other person in respect of whom he is assessable under this Act during the relevant tax year; and 59[(c) the period specified in the notice referred to in clause (a) shall not be less than thirty days from the date of such notice but shall not exceed three months from the end of the month in which such notice is issued.] (2) The return of income required under sub-section (1) shall be furnished in such form, verified in such manner and setting forth such other particulars, as may be prescribed, and the provisions of this Act shall apply accordingly, as if such return were a return required to be furnished under section 263. (3) Any return of income required to be furnished under sub-section (1), furnished after the expiry of the period specified in the notice under the said sub-section, shall not be deemed to be a return under section 263. (4) No notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant tax year. (5) No notice under this section shall be issued without prior approval of the specified authority, where the Assessing Officer has received—

(a) information under the scheme notified under section 260; or

(b) directions from the Approving Panel under section 274(6); or

58 Inserted by the Finance Act, 2026, w.e.f. 1-4-2026. 59. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, clause (c) read as under :

“(c) the period specified in the notice referred to in clause (a) shall not exceed three months from the end of the month in which such notice is issued.”

(c) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (6) For the purposes of this section and section 281, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means—

(a) any information in the case of the assessee for the relevant tax year as per the risk management strategy formulated by the Board from time to time;

(b) any audit objection to the effect that the assessment in the case of the assessee for the relevant tax year has not been made as per this Act;

(c) any information received under an agreement referred to in section 159 of this Act;

(d) any information made available to the Assessing Officer under the scheme notified under section 260;

(e) any information which requires action in consequence of the order of a Tribunal or a Court;

(f) any information in the case of the assessee emanating from the survey conducted under section 253, other than under sub-section (4) of the said section;

(g) any directions in the case of the assessee given by the Approving Panel under section 274(6);

(h) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision, or by a Court in any proceeding under any other law. Procedure before issuance of notice under section 280. 281. (1) Where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment in the case of an assessee for the relevant tax year, he shall, before issuing any notice under section 280 provide an opportunity of being heard to such assessee by serving upon him a notice to show cause as to why notice under section 280 should not be issued. (2) The notice to show cause referred to in sub-section (1) shall be accompanied by the information which suggests that income chargeable to tax has escaped assess­ ment in his case for the relevant tax year, and on receipt of such notice, the assessee may furnish his reply within such period, as specified therein. (3) The Assessing Officer shall, on the basis of material available on record and taking into account the reply of the assessee furnished under sub-section (2), if any, pass an order with the prior approval of the specified authority determining whether or not it is a fit case to issue notice under section 280. (4) The provisions of this section shall not apply to income chargeable to tax es­ caping assessment for any tax year in the case of an assessee, where the Assessing Officer has received—

(a) information under the scheme notified under section 260; or

(b) directions issued by the Approving Panel under section 274(6); or

(c) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision, or by a Court in any proceeding under any other law. Time limit for notices under sections 280 and 281. 282. (1) No notice under section 280 shall be issued for the relevant tax year,—

(a) if four years and three months have elapsed from the end of the relevant tax year, unless the case falls under clause (b);

(b) if four years and three months, but not more than six years and three months, have elapsed from the end of the relevant tax year, unless the Assessing Officer has in his possession books of account or other docu­ ments or evidence related to any asset or expenditure or transaction or entry which shows that the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to fifty lakh rupees or more. (2) No notice to show cause under section 281 shall be issued for the relevant tax year,—

(a) if four years have elapsed from the end of the relevant tax year, unless the case falls under clause (b);

(b) if four years, but not more than six years, have elapsed from the end of the relevant tax year, unless the income chargeable to tax which has escaped assessment, as per the information with the Assessing Officer, amounts to or is likely to amount to fifty lakh rupees or more. (3) No notice under section 280 or 281 shall be issued within one year from the end of any tax year. 60[Provision for cases where assessment is in pursuance of an order on appeal, etc. 283. (1) Irrespective of anything contained in section 282, the notice under section 280 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of, or to give effect to,—

(a) any finding or direction contained in an order passed by any authority. Tribunal or Court in any proceeding under this Act or any other law; or 60. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, section 283 read as under :

 “283. Provision for cases where assessment is in pursuance of an order on appeal, etc.—(1)

Irrespective of anything contained in section 282, the notice under section 280 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to—

(a) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law; or

(b) the directions issued by the Approving Panel under section 274(6). (Contd. on page 403)

(b) the directions issued by the Approving Panel under section 274(6). (2) The provisions of sub-section (1) shall not apply in any case, where the assessment or reassessment or recomputation as is referred to in that sub-section relates to a tax year in respect of which an assessment or reassessment or recomputation could not have been made under this Act due to it being time-barred, at the time when,—

(a) the order, which was the subject-matter before any authority, Tribunal or Court, was made; or

(b) the proceedings relating to assessment or reassessment or recomputation under this Act (other than those proceedings which have culminated in an order), which was the subject-matter before the Court, was initiated; or

(c) the reference from the jurisdictional Principal Commissioner or Commis­ sioner is made to the Approving Panel under section 274(4). (3) For the purposes of sub-section (1), notice under section 280 shall be issued within three months from the end of the quarter in which the certified copy of the order of the authority or the Court, as the case may be, is received by the jurisdictional Principal Commissioner or Commissioner.] Sanction for issue of notice. 284. The specified authority for the purposes of sections 280 and 28146 shall be the Additional Commissioner or the Additional Director or the Joint Com­ missioner or the Joint Director. Other provisions. 285. (1) In an assessment, reassessment or recomputation made under section 279, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment. (2) The proceedings initiated under section 279 shall be dropped on a claim made by the assessee and on his showing to the effect that—

(a) the assessee had been assessed on an amount not lower than what he would be rightly liable for, even if the income alleged to have escaped assessment had been taken into account, or the assessment or compu­ tation had been properly made; and

(b) he has not impugned any part of the original assessment order for the relevant tax year under section 356 or 357 or 378. (Contd. from page 402)

 (2) The provisions of sub-section (1) shall not apply in any case where any such assessment,

reassessment or recomputation as is referred to in that sub-section relates to a tax year in respect of which an assessment, reassessment or recomputation could not have been made, by reason of any other provisions limiting the time within which any action for assessment, reassessment or recomputation may be taken, at the time when,—

(a) the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made; or

(b) the reference from the jurisdictional Principal Commissioner or Commissioner is made to the Approving Panel under section 274(4).”

(3) Where a claim has been made by an assessee under sub-section (2), he shall not be entitled to reopen matters concluded by an order under section 287 or 288 or 365(10) or 368 or 377. Time limit for completion of assessment, reassessment and recomputation. 286. (1) No order in respect of proceedings mentioned in column B of the Table below shall be made after expiry of the period specified in the corresponding entry in column D of the said Table and such period shall be calculated from the date as mentioned in column C thereof. TABLE Sl. No. Nature of Proceedings or orders Date from which time limit for completion is to be calculated Time limit for completion A B C D 1. Assessment order under section 270(10) or section 271. End of the financial year succeeding the rel­ evant tax year for which assessment is made. One year. 2. Assessment order under section 270(10) or 271, where an updat­ ed return of income is furnished under section 263(6). End of the financial year in which such updated return was furnished. One year. 3. Assessment order under section 270(10) or 271, where return is furnished in consequence of order under section 239(3)(b). End of the financial year in which such return was furnished. One year. 4. Assessment, reassessment or recomputation order under section 279. End of the financial year in which notice under section 280 was served. One year. 5. Fresh assessment order or fresh order under section 166 in pursuance to an order under section 359, or 363, or 377, or 378, setting aside or cancelling an assessment order or an order under section 166. End of the financial year in which order under section 359 or 363 is received by, or order under section 377 or 378 is passed by, the jurisdictional Principal Commissioner or Com­ missioner. One year. 6. Assessment or reassessment which stands revived, as per section 292. End of the month in which such assessment or reassessment stands revived. One year.

Sl. No. Nature of Proceedings or orders Date from which time limit for completion is to be calculated Time limit for completion A B C D 7. Assessment required to be made in the hands of partner, in conse­ quence of an assessment made on the firm under section 279. End of the month in which assessment order in the case of firm is passed. One year. 8. Assessment, reassessment or recomputation required to be made on the assessee or any per­ son in consequence of or to give effect to any finding or direction contained in an order— (i) under section 359 or 363 or 365(10), or 368, or 377 or 378; or (ii) of any Court in a proceed­ ing otherwise than by way of appeal or reference under this Act. End of the month in which such order is received, or passed, by the jurisdictional Prin­ cipal Commissioner or Commissioner. One year. 9. Order giving effect to an order under section 359 or 363 or 365(10) or 368 or 377 or 378, oth­ erwise than by making a fresh assessment or reassessment or fresh order under section 166, where— (i) verification of any issue by way of submission of any document by the assessee or any other person is to be carried out; or (ii) an opportunity of being heard is to be given to the assessee. End of the month in which order under section 359 or 363 or 365(10) or 3686is received, or order under section 377 or 378 is passed, by the jurisdictional Princi­ pal Commissioner or Commissioner. One year. 10. Order giving effect to an order under section 359 or 363 or 365(10) or 368 or 377 or 378 oth­ erwise than by making a fresh End of the month in which order under section 359 or 363 or 365(10) or 368 is Six months, ex­ tendable to nine m ont hs wi t h the approval of

Provisos

None.

Explanations

None.

Key Structure

  • Applies to: [Verification Pending]
  • Conditions: [Verification Pending]
  • Time limits: [Verification Pending]
  • Monetary limits: [Verification Pending]
  • Exceptions: [Verification Pending]

Cross-References

Amendment Notes

None noted from the extracted pages.

Practical Notes

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