Income Escaping Assessment under Sections 279-286 of the Income-tax Act, 2025 & Legacy Sections 147/148

Current Reassessment Framework under the Income-tax Act, 2025

Section 279 provides the substantive power to assess or reassess income chargeable to tax that has escaped assessment for a tax year, or to recompute loss, depreciation allowance or another allowance or deduction. The power is subject to Sections 280 to 286.

Procedure before Reassessment Notice: Section 281

Before issuing a reassessment notice under Section 280, the Assessing Officer generally follows Section 281. The assessee is provided information suggesting that income chargeable to tax has escaped assessment and is given an opportunity to respond. The Assessing Officer considers the reply and passes an order deciding whether the case is fit for reassessment, with the approval required by law.

Notice under Section 280

Where the statutory conditions are satisfied, the Assessing Officer issues a notice under Section 280 requiring the assessee to furnish a return for the relevant tax year. The notice is accompanied by the order passed under Section 281(3), where that procedure applies.

Following the Finance Act, 2026, the period specified in the Section 280 notice cannot be less than 30 days from the date of notice and cannot exceed three months from the end of the month in which the notice is issued.

A return furnished after expiry of the period specified in the notice is not deemed to be a return under Section 263.

How to Prepare and File a Reassessment Return

1. Identify the correct tax year or assessment year. This determines which Act and limitation regime applies.
2. Examine the notice and accompanying order. Verify date, service, issuing authority, DIN, information alleging escapement and statutory approval.
3. Reconstruct the income accurately. Reconcile books, bank accounts, Form 26AS/AIS, TDS/TCS, capital gains, business income, property transactions, investments and foreign income/assets where relevant.
4. Claim legally permissible deductions and losses. A reassessment return does not require surrender of otherwise valid claims merely because the return is filed in response to a notice.
5. Compute tax and interest. Pay additional statutory liability where applicable.
6. File electronically through the prescribed mechanism.
7. Preserve records. Keep the notice, pre-notice show-cause, order, return acknowledgement, tax challans, submissions and supporting evidence.

Time Limits for Reassessment

Under the Income-tax Act, 2025, the time limit for issuing a reassessment notice is governed by Section 282, while the time limit for completing reassessment is governed by Section 286. These provisions should be applied with reference to the relevant tax year, the nature and amount of alleged escaped income, and any statutory exclusions or extensions.

Legacy Sections 147, 148, 148A, 149, 151 and 153

For earlier assessment years and proceedings that continue under the Income-tax Act, 1961, Section 147 remains the substantive reassessment provision, Section 148 governs the reassessment notice, Section 148A generally provides the pre-notice opportunity, Section 149 governs notice limitation, Section 151 governs approval and Section 153 governs completion of reassessment.

For notices governed by the post-1 September 2024 version of Section 149, the ordinary limitation is generally three years and three months from the end of the relevant assessment year. The extended window can reach five years and three months where the statutory conditions, including the ₹50 lakh threshold linked to specified books, documents or evidence, are satisfied.

For a legacy Section 148 notice, the return period specified in the notice cannot exceed three months from the end of the month in which the notice is issued; following the Finance Act, 2026 amendment, it cannot be less than 30 days from the date of notice.

Legacy Section 153 generally provides 12 months from the end of the financial year in which a Section 148 notice is served for completion of reassessment in cases covered by the post-1 April 2019 proviso, subject to exclusions and extensions.

What May Happen after Filing the Reassessment Return?

The Assessing Officer may examine the alleged escaped income and other issues that lawfully come to notice during reassessment. The proceeding may result in acceptance of the returned income, reassessment of escaped income, recomputation of loss or allowances, disallowance of deductions or creation of an additional demand.

Checklist after Receiving a Reassessment Notice

1. Which tax year or assessment year is involved?
2. Which Act applies-the Income-tax Act, 2025 or the saved 1961 Act?
3. When was the notice issued and served?
4. Was the statutory pre-notice procedure followed?
5. Was the information suggesting escapement supplied?
6. Was adequate opportunity to respond provided?
7. Was the statutory approval obtained from the competent authority?
8. Is the notice within the applicable limitation period?
9. Does the case satisfy any monetary or evidentiary threshold required for an extended period?
10. Was the alleged income already disclosed or examined?
11. Is there an impermissible change-of-opinion issue under the applicable law?
12. Was the return filed within the time allowed in the notice?

Official References

Income Tax Department - Income-tax Act, 2025

Income-tax Act, 2025 as amended by Finance Act, 2026

CBDT - FAQs on Interplay and Transition

Frequently Asked Questions

What replaced Section 147 for current tax years?

Section 279 of the Income-tax Act, 2025 is the current substantive provision dealing with income escaping assessment.

What replaced Section 148?

Section 280 now governs issue of the reassessment notice.

What replaced Section 148A?

Section 281 now contains the general pre-notice show-cause and decision procedure.

How much time can be given for filing a return under Section 280?

The notice period cannot be less than 30 days from the date of notice and cannot exceed three months from the end of the month in which the notice is issued.

Do Sections 147 and 148 still matter after 1 April 2026?

Yes. They remain relevant for earlier tax years and reassessment proceedings governed or preserved under the Income-tax Act, 1961.