Comparison of section 281 "Procedure before issuance of notice u/s 280." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....axpayers, assessing officers and departmental oversight. Effective date or enactment date: Not stated in the document. Background & Scope Statutory hooks: Clause 281 of the Income Tax Bill, 2025 (old version) which corresponds to procedure before issuance of notice under clause 280. The provision is placed under the chapter heading "Procedure for assessment." The text defines a pre-notice show-cause procedure where an Assessing Officer (AO) who has information suggesting escaped income must serve a show-cause notice and provide the information underlying the suspicion. It also requires the AO, after considering the assessee's reply and the material on record, to obtain prior approval of a specified authority before issuing a notice un....

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....roving Panel u/s 274(6); or 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. Interpretation The text indicates a legislative intent to create a structured, procedural safeguard before issuing a formal notice under clause 280. Key interpretive pointers from the text are: * Mandatory pre-notice hearing: The AO's duty to provide an opportunity of being heard is framed in mandatory language ("shall"), suggesting it is a pre-condition to issuance of clause 280 notices. * Disclosure of underlying information: The show-cause notice must be accompanied by the information th....

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....y, the AO decides whether to issue the clause 280 notice. (Factual particulars such as timelines, identity of the third party and the specified authority's identity are Not stated in the document.) * Example 2: The AO has a Tribunal order in favour of finding income escaped assessment. Sub-section (4)(c) applies and the pre-notice show-cause requirement does not apply. (Specific application rules for such cases are Not stated in the document.) Interplay The clause references other provisions (sections 260 and 274(6)) and clause 280, indicating cross-statutory interaction. The text does not reproduce or summarise those provisions; therefore, the precise nature of the "scheme" u/s 260, the composition or powers of the "Approving Pan....

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....e notice; the content and length of that period are not prescribed in the clause. * The AO must obtain prior approval of a "specified authority" after considering record material and the assessee's response; the identity, powers and procedure for that authority are Not stated in the document. * Cases where the AO has specific institutional or judicial information (u/s 260 scheme, Approving Panel directions u/s 274(6), or judicial/tribunal orders) are excluded from the pre-notice requirement. * The provision aims to introduce transparency and a supervisory check before escalating to formal proceedings for escaped income; however, many operational details (timelines, identities of approving authorities, consequences of non-complianc....