TaxTMI 
TaxTMI 
procedural aspects of assessment, reassessment, and recomputation where income has allegedly escaped assessment : Clause 285 of Income Tax Bill, 2025 Vs. Section 152 of Income Tax Act, 1961
X X X X Extracts X X X X
X X X X Extracts X X X X
.... seek the dropping of reassessment proceedings under certain conditions, and set limitations on the reopening of concluded matters. The evolution from Section 152 to Clause 285 reflects legislative intent to streamline, modernize, and possibly clarify the assessment process in light of contemporary tax administration challenges and judicial interpretations. This commentary provides a detailed examination of Clause 285, its objectives, interpretative nuances, practical implications, and a comparative analysis with Section 152 of the Income-tax Act, 1961, highlighting the continuities and departures between the two frameworks. Objective and Purpose Legislative Intent and Policy Considerations The core objective underlying both Clause 285 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment, reassessment or recomputation made u/s 279, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment." * Interpretation: This provision mandates that, in cases of assessment, reassessment, or recomputation u/s 279 (presumably the corresponding provision for escaped income in the new Bill), the tax rates to be applied are those that would have been applicable had the income originally been assessed. This ensures that taxpayers are neither penalized nor advantaged by changes in tax rates occurring after the original assessment year. * Legal Principle: The principle of "taxing as if the income had never escaped assessment" is a well-established doctrine, preventi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... where it would have no practical effect. It recognizes the principle of "no prejudice, no proceedings." * Discretion of AO: The use of "may" indicates that the AO has discretion, though this must be exercised judiciously and is subject to judicial review in cases of arbitrary or unreasonable rejection of the assessee's claim. * Procedural Requirements: The onus is on the assessee to make a claim and substantiate it with evidence. The AO must verify the correctness of the claim before dropping the proceedings. * Exclusion of Assessees in Appeal/Revision: Assessees who have challenged the original assessment order under the specified sections are excluded from this relief, to prevent inconsistent positions and multiplicity of proce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stent stances. * Procedural Burden: The burden of proof lies on the assessee to substantiate the claim, necessitating careful documentation and analysis. For Revenue Authorities * Efficient Administration: Enables the AO to focus on cases with actual revenue impact, reducing administrative backlog. * Discretionary Power: AOs must exercise discretion judiciously, with potential for judicial scrutiny if claims are rejected without adequate reasoning. For the Appellate and Judicial Forums * Reduction in Frivolous Litigation: The provision may reduce the number of appeals and writ petitions arising from reassessment proceedings with no tax effect. * Scope for Judicial Interpretation: Disputes may arise regarding the sufficiency of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....resumably corresponding to appeals/revisions in the new Bill). The language is slightly modernized and streamlined. * Analysis: The key difference lies in the updated cross-references. The principle, procedural safeguards, and taxpayer rights are preserved. The use of "may" in both provisions grants discretion to the AO, subject to judicial review. Sub-section (3): Bar on Reopening * Section 152(2) Proviso: Prohibits reopening matters concluded by orders u/ss 154, 155, 260, 262, or 263. * Clause 285(3): Prohibits reopening matters concluded by orders u/ss 287, 288, 365(10), 368, or 377. The substance is identical, with updated references. * Analysis: No substantive change; only modernized references. Additional Sub-sections in Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission of Transitional Provisions: Section 152(3) and (4) contain detailed transitional clauses for cases around the 2024 amendments, which are not present in Clause 285. The handling of legacy cases in the new Bill will depend on separate transition provisions. * Language and Structure: Clause 285 uses more streamlined and modern legislative language, potentially reducing ambiguity and improving clarity. Potential Areas of Ambiguity or Concern * Discretion of the Assessing Officer: The continued use of "may" leaves room for subjective interpretation. Clear guidelines or administrative instructions may be necessary to ensure uniform application. * Scope of Bar on Reopening: The precise ambit of the corresponding sections (287, 288, ....