Comparison of section 271 "Best judgment assessment" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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..... Effective date or enactment date: Not stated in the document. Background & Scope Statutory hooks: Clause 271 refers to sections 263, 268 and 270 of the Bill (sub-sections as indicated). The provision is situated under "Procedure for assessment" and governs the power of the Assessing Officer to make a "best judgment assessment" where the assessee fails to make or comply with statutory filing obligations or notices. Definitions or explanations: Not stated in the document beyond the operative text. The clause indicates the triggering events (failures under specified sections), the procedural requirement to consider relevant materials, an opportunity of being heard, and an exception to the requirement to give a show-cause opportunity in a s....

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....in clause (3). The provision balances revenue protection with procedural safeguards. No express standard for the degree of inquiry or onus of proof is prescribed in the clause. Exceptions/Provisos The sole express proviso in the clause: where a notice u/s 268(1) has been issued before the assessment under this section is made, it is "not necessary" to give the show-cause opportunity referred to in clause (2). The conditions that would make the show-cause unnecessary beyond a prior 268(1) notice are not stated. Any other carve-outs or thresholds: Not stated in the document. Illustrations * Example 1: A taxpayer never files the return required under 263(1) and does not subsequently file a revised/updated return under 263(4)/(5)/(6). The ....

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.... made a return or a revised return u/s 263(4) or (5) or an updated return u/s 263(6);" The enacted Section 271 states: "fails to furnish the return required u/s 263(1) or (4) or (5) or (6);" * Practical impact: The Bill's language explicitly frames the condition as a failure to make a return under sub-section (1) combined with an absence of any subsequent return/revised/updated returns under the specified subsections. The Act's language is conciser and aggregates the referenced subsections with "or," potentially broadening the textual reading to cover failure to "furnish" any of the returns mentioned in 263(1), (4), (5) or (6). In practice this may create interpretive differences about whether the provision applies only when an or....

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....whereas the Act text must be interpreted on its face. * Terminology: "furnish" vs "make": The Act uses "furnish the return"; the Bill uses "make the return" (in sub-clause (a)). * Practical impact: "Furnish" typically emphasises submission to the tax authority; "make" emphasises the act of preparing/filing. The Act's use of "furnish" could be read to require proof of delivery to the authority; the Bill's "make" could be read to require that a return be prepared (and possibly filed) - however the Bill qualifies the failure as including absence of filing/revised/updated returns. Overall, both target non-submission of returns; the drafting variance is unlikely to produce materially different outcomes but may feature in technical di....