Sections 279 to 286 Explained

The Income-tax Department may reopen a taxpayer's case where it has information suggesting that income chargeable to tax has escaped assessment. Under the Income-tax Act, 2025, the reassessment framework is mainly contained in Sections 279 to 286.

These provisions came into force from 1 April 2026 and apply to Tax Year 2026-27 and subsequent tax years. Reassessment relating to earlier periods continues to be governed by the relevant provisions of the Income-tax Act, 1961.

What is reassessment under the Income-tax Act, 2025?

Reassessment is a process through which the Assessing Officer may assess or reassess income where income chargeable to tax has escaped assessment for a particular tax year.

The reassessment provisions also permit the Assessing Officer to recompute a loss, depreciation allowance, deduction or another allowance where required.

Once valid reassessment proceedings are initiated, the Assessing Officer may also examine another issue involving escaped income that comes to notice during the reassessment proceedings, subject to the provisions of the Act.

Sections 279 to 286 at a glance

Section 279 – Income escaping assessment

Section 279 provides the basic power for reassessment. Where income chargeable to tax has escaped assessment for a tax year, the Assessing Officer may, subject to Sections 280 to 286:

• assess previously unassessed income
• reassess income
• recompute a loss
• recompute depreciation or
• recompute another allowance or deduction

During reassessment, if another issue involving escaped income subsequently comes to the Assessing Officer's notice, that issue may also be assessed or reassessed in accordance with Section 279.

Section 280 – Reassessment notice

Before making an assessment, reassessment or recomputation under Section 279, the Assessing Officer is generally required to issue a notice under Section 280.

Where the procedure under Section 281 applies, the Section 280 notice must be accompanied by a copy of the order passed under Section 281(3).

The notice requires the taxpayer to furnish a return for the relevant tax year within the period specified in the notice.

Time allowed to file return against Section 280 notice

Following the amendment made by the Finance Act, 2026, the period specified in a Section 280 notice:

• cannot be less than 30 days from the date of the 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 will not be treated as a return under Section 263 for this purpose.

When can a Section 280 notice be issued?

A reassessment notice cannot ordinarily be issued merely on suspicion. The Assessing Officer must have information suggesting that income chargeable to tax has escaped assessment.

Such information may include, among other things:

• information identified under the CBDT's risk management strategy
• an audit objection
• information received under an agreement with a foreign country or specified territory
• information received under a notified information-collection scheme
• information requiring action because of a Tribunal or Court order
• specified information arising from a survey
• directions from the Approving Panel and
• findings or directions contained in specified orders of authorities, Tribunals or Courts

Section 281 – Opportunity to respond before reassessment

Section 281 generally provides an important procedural safeguard before a final reassessment notice is issued.

The normal procedure is:

1. Information suggesting escaped income: The Assessing Officer has information indicating that income may have escaped assessment.
2. Show-cause notice: A notice under Section 281(1) is issued asking the taxpayer to explain why a notice under Section 280 should not be issued.
3. Information is provided: The show-cause notice must be accompanied by the information suggesting that income has escaped assessment.
4. Taxpayer's reply: The taxpayer may submit a response within the period specified in the notice.
5. Reply is considered: The Assessing Officer considers the available material and the taxpayer's response.
6. Order under Section 281(3): With prior approval of the specified authority, the Assessing Officer determines whether it is a fit case for issuing a Section 280 notice.
7. Section 280 notice: If the case is considered fit for reassessment, the reassessment notice is issued.

When can the Section 281 procedure be skipped?

Section 281 contains specified exceptions where the pre-notice procedure is not required, including cases involving:

• information received under the scheme notified under Section 260
• directions issued by the Approving Panel under Section 274(6) or
• specified findings or directions contained in orders of an authority, Tribunal or Court

The statutory approval requirements applicable to the reassessment notice must nevertheless be complied with.

Section 282 – Time limits for reassessment notices

Section 282 prescribes separate limitation periods for the show-cause notice under Section 281 and the reassessment notice under Section 280.

For the extended limitation period, the statutory conditions relating to escaped income of ₹50 lakh or more must be satisfied.

For a Section 280 notice in the extended period, the Assessing Officer must possess books of account, documents or evidence relating to an asset, expenditure, transaction or entry showing that escaped income amounts to, or is likely to amount to, ₹50 lakh or more.

Section 282(3) further provides that a notice under Section 280 or Section 281 cannot be issued within one year from the end of the relevant tax year.

Section 283 – Reassessment pursuant to Court, Tribunal or other orders

Section 283 contains special provisions where reassessment or recomputation is required to give effect to certain findings or directions contained in orders of authorities, Tribunals or Courts, or specified directions of the Approving Panel.

Subject to the conditions contained in the section, Section 283 can override the normal limitation under Section 282.

However, it does not revive a case where reassessment was already barred by limitation at the relevant statutory point specified under Section 283.

As amended by the Finance Act, 2026, the relevant Section 280 notice for cases covered by Section 283(1) is required to be issued within three months from the end of the quarter in which the certified copy of the relevant order is received by the jurisdictional Principal Commissioner or Commissioner.

Section 284 – Approval required before issuing notice

Section 284 specifies the authority whose approval is required for the purposes of Sections 280 and 281.

The specified authority may be:

• Additional Commissioner
• Additional Director
• Joint Commissioner or
• Joint Director

The applicable approval requirements must be complied with before the relevant reassessment action is taken.

Section 285 – Other reassessment provisions

Rate of tax

Where income is reassessed under Section 279, tax is charged at the rate or rates at which the income would have been taxed if it had not escaped assessment.

When reassessment proceedings may be dropped

Section 285 also permits an assessee to claim that reassessment proceedings should be dropped in specified circumstances.

Broadly, the taxpayer must demonstrate that:

• the amount on which the taxpayer was originally assessed was not lower than the amount on which the taxpayer would correctly have been liable even after considering the alleged escaped income or correcting the computation and
• the taxpayer has not challenged the relevant part of the original assessment in the manner specified by Section 285

This provision is subject to the precise statutory conditions and should be examined carefully before making such a claim.

Section 286 – Time limit for completing reassessment

Section 286 prescribes the time limits within which various assessment and reassessment proceedings must be completed.

For an assessment, reassessment or recomputation under Section 279, the order must generally be passed within:

One year from the end of the financial year in which the notice under Section 280 was served.

The Act also contains provisions for exclusion or extension of time in specified situations, including certain Court or Tribunal stays and other prescribed proceedings. Therefore, the actual limitation date should be determined after considering the facts of the particular case.

How does reassessment normally work under the Income-tax Act, 2025?

The normal reassessment flow can be summarised as follows:

1. Information suggesting escaped income comes to the Assessing Officer.
2. The taxpayer receives a show-cause notice under Section 281.
3. The taxpayer examines the information and submits a response.
4. The Assessing Officer considers the response and available material.
5. An order under Section 281(3) determines whether reassessment is appropriate.
6. If it is a fit case, a notice under Section 280 is issued.
7. The taxpayer files the required return within the period specified in the notice.
8. Reassessment proceedings are conducted under Section 279.
9. The reassessment order is completed within the applicable limitation period under Section 286.

Which Act applies to old assessment years?

This is particularly important after the commencement of the Income-tax Act, 2025.

What happens to reassessment proceedings already pending on 1 April 2026?

Section 536 of the Income-tax Act, 2025 contains repeal and saving provisions.

Reassessment proceedings relating to earlier years that were pending when the new Act commenced continue under the Income-tax Act, 1961.

Further, even after 1 April 2026, fresh proceedings relating to tax periods governed by the old Act may continue to be initiated under the Income-tax Act, 1961 where permitted by its limitation provisions and the saving provisions of Section 536.

What should you do if you receive a reassessment notice?

• Check the section: Determine whether you have received a Section 281 show-cause notice, Section 280 reassessment notice, or a notice under the Income-tax Act, 1961 for an earlier year.
• Check the tax year: This determines whether the 1961 Act or the 2025 Act applies.
• Check the deadline: Note the response or return-filing deadline mentioned in the notice.
• Review the information: Understand the transaction, income, asset, deduction or other item on which the Department has raised the issue.
• Reconcile records: Compare the notice with your return, AIS, TIS, Form 26AS, Form 16/16A, bank statements, capital gains reports and other relevant records.
• Prepare supporting documents: Keep documentary evidence supporting the position taken in the return.
• Respond accurately: Do not ignore the notice or submit an incomplete response without understanding the issue.
• Preserve records: Keep copies of notices, replies, acknowledgements, orders and supporting documents.

Common mistakes when responding to reassessment notices

• Assuming every notice received after 1 April 2026 is governed by the Income-tax Act, 2025.
• Confusing a Section 281 show-cause notice with the final reassessment notice under Section 280.
• Ignoring the response deadline.
• Filing a return after the time allowed in the Section 280 notice.
• Responding without reconciling AIS, Form 26AS and previously filed return data.
• Providing explanations without supporting documents.
• Assuming that the ₹50 lakh threshold applies to every reassessment case.
• Ignoring the limitation period applicable to the relevant tax year.

Frequently Asked Questions

1. Can the Income Tax Department reopen a return under the Income-tax Act, 2025?

Yes. If income chargeable to tax has escaped assessment and the statutory conditions are satisfied, reassessment may be initiated under Sections 279 to 286 for Tax Year 2026-27 and subsequent tax years.

2. What is the difference between Sections 280 and 281?

Section 281 generally deals with the pre-notice show-cause procedure, while Section 280 is the reassessment notice requiring the taxpayer to furnish a return for the relevant tax year.

3. Is the taxpayer given an opportunity to explain before reassessment?

Generally, yes. Section 281 requires the Assessing Officer to provide an opportunity of being heard before issuing the Section 280 notice. However, specified exceptions are provided under Section 281(4).

4. How long can the Department go back under the Income-tax Act, 2025?

The general outer limits are four years for a Section 281 show-cause notice and four years and three months for a Section 280 notice. Where escaped income is ₹50 lakh or more and the applicable statutory conditions are satisfied, these limits may extend to six years and six years and three months respectively.

5. How much time is available to file the return after receiving a Section 280 notice?

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

6. Does the Income-tax Act, 2025 apply to reassessment of AY 2025-26?

No. Reassessment relating to a period beginning before 1 April 2026 continues to be governed by the Income-tax Act, 1961, subject to the repeal and saving provisions of Section 536 of the Income-tax Act, 2025.

7. What is the time limit for completing reassessment?

A reassessment order under Section 279 must generally be completed within one year from the end of the financial year in which the Section 280 notice was served, subject to statutory extensions and exclusions.

Key takeaway

The Income-tax Act, 2025 has reorganised the reassessment framework into Sections 279 to 286. The framework retains safeguards such as information suggesting escaped income, a pre-notice opportunity in applicable cases, approval by specified senior authorities and statutory time limits.

The most important point during the transition is to identify the tax period to which the reassessment relates. Sections 279 to 286 apply to Tax Year 2026-27 onwards, while reassessment for earlier periods continues under the Income-tax Act, 1961 in accordance with Section 536 and the applicable old-Act provisions.

Since reassessment proceedings may involve detailed legal and factual issues, taxpayers should review the notice, applicable limitation period, underlying information and supporting documents carefully before submitting a response.

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