Section 285 Other provisions.

Income-tax Act, 2025

At a Glance

These texts reproduce Clause/Section 285 dealing with "Other provisions" in relation to assessments, reassessments and recomputations u/s 279 of the Income-tax enactment (Bill 2025 - Old Version and the enacted Act text as presented). The change of wording between the Bill version and the enacted/Section version materially affects who must or may drop proceedings u/s 279 when an assessee makes a claim. The provisions primarily affect taxpayers and assessing officers; the effective date or decision date is Not stated in the document.

Background & Scope

Statutory hooks: section 279 (assessment, reassessment or recomputation procedures), and the enumerated related provisions referenced in sub-section (2)(b) and sub-section (3) - sections 356, 357, 378, 287, 288, 365(10), 368 and 377. The clause addresses (i) the rate at which tax is chargeable in assessments/reassessments/recomputations u/s 279, (ii) the conditions under which proceedings u/s 279 shall be dropped (or may be dropped), and (iii) the effect of a claim on the ability to reopen matters concluded by specified orders. The text contains no definitions or extended explanations beyond the three sub-sections. Any interpretive definitions are Not stated in the document.

Statutory Provision Mode

Text & Scope

Coverage: Clause/Section 285 comprises three sub-sections:

• Sub-section (1): In assessment, reassessment or recomputation u/s 279, tax is chargeable at the rate(s) at which it would have been charged had the income not escaped assessment.
• Sub-section (2): Procedural consequence for proceedings initiated u/s 279 where a claim is made by the assessee-two limbs of the claim are specified: (a) the assessee has been assessed on an amount not lower than what he would rightly be liable for even if the escaped income were taken into account, or the assessment/computation had been properly made; and (b) the assessee has not impugned any part of the original assessment order for the relevant year under specified sections (356 or 357 or 378). The operative verb differs between the two texts: the Bill (Old Version) states "The Assessing Officer may drop the proceedings... on a claim made by the assessee," whereas the Section (Act) text states "the proceedings initiated u/s 279 shall be dropped on a claim made by the assessee and on his showing to the effect that..."
• Sub-section (3): If an assessee makes the claim under sub-section (2), he shall not be entitled to reopen matters concluded by orders under listed sections (287, 288, 365(10), 368, 377).

Interpretation

Legislative intent and interpretive principles indicated by the text: Not stated in the document. The literal wording, however, suggests the following interpretive points grounded solely in the text: (a) sub-section (1) fixes the chargeable tax rate for section 279 actions by reference to the rates that would apply if the escaped income had been included; (b) sub-section (2) conditions the cessation of section 279 proceedings on a claim by the assessee satisfying two specified criteria; and (c) sub-section (3) imposes finality - an assessee who obtains relief under sub-section (2) relinquishes the right to reopen certain matters. Any legislative history, purposive statements or explanatory memorandum are Not stated in the document.

Exceptions/Provisos

No express provisos or carve-outs beyond the two-part condition in sub-section (2) and the non-entitlement in sub-section (3). The specific limitations are: the assessee must show (a) assessed amount not lower than correct liability (even if escaped income included) or that assessment/computation had been properly made; and (b) the assessee must not have impugned any part of the original assessment order for the relevant year under the specified sections. Any exceptions, administrative discretion beyond the wording, or safeguards are Not stated in the document.

Illustrations

• Example 1: A taxpayer under assessment year X was initially assessed at Rs. 10 lakh. The revenue initiates proceedings u/s 279 asserting escaped income of Rs. 2 lakh. If, after inclusion of the escaped income, the correct tax liability would still be met by the Rs. 10 lakh assessment (i.e. Rs. 10 lakh >= liability including escaped income), and the taxpayer has not appealed under the listed sections against the original assessment, then (per the enacted text) the proceedings u/s 279 shall be dropped on the claim by the assessee.
• Example 2: A taxpayer has been assessed and has filed an appeal under one of the listed sections (356/357/378) against part of the original assessment. The taxpayer then seeks to claim that proceedings u/s 279 should be dropped. Under clause (2)(b), the taxpayer would not satisfy the condition, so the relief to drop proceedings would not apply.

Interplay

Interaction with other provisions is limited to the express cross-references in the text. The provision references section 279 as the triggering procedural provision; sections 356, 357 and 378 as bars to claiming the dropping of proceedings; and sections 287, 288, 365(10), 368 and 377 as matters that cannot be reopened once a claim under sub-section (2) is allowed. Any interaction with rules, notifications or circulars is Not stated in the document.

Practical Implications

• Compliance and risk areas : The assessee seeking to stop proceedings u/s 279 must be able to demonstrate both limbs in sub-section (2). The taxpayer should ensure no pending impugnment under the specified sections for the relevant year, because such impugnment precludes relief.
• Record-keeping/evidence points suggested by the text: The assessee will need contemporaneous evidence showing the original assessment amount and that it is not lower than correct liability (calculation of tax with the escaped income included) or documentation showing proper assessment/computation; and proof that no appeal or other impugnment was made under the specified sections for the relevant year. The text itself does not prescribe formats, timelines or procedures for making the claim-those are Not stated in the document.

Key Takeaways

• Sub-section (1) fixes tax in section 279 proceedings at the rate(s) that would have applied had the escaped income been assessed.
• The principal textual change between the Bill (Old Version) and the Section/Act text is the operative verb in sub-section (2): Bill used "Assessing Officer may drop"; enacted text states "the proceedings ... shall be dropped" (removing explicit AO discretion in favour of a mandatory outcome on fulfilment of the claim conditions, as presented).
• Relief under sub-section (2) is conditional on two cumulative limbs: assessment not lower than correct liability (or properly made assessment/computation) and absence of any impugnment under the listed sections for the relevant year.
• Acceptance of a claim under sub-section (2) triggers finality under sub-section (3): the assessee cannot thereafter reopen matters concluded by orders under the listed sections.
• Procedural specifics (how to make the claim, timelines, evidentiary standards, AO's role on fact-finding) are Not stated in the document.

Differences between the two provisions and Practical Impact

Action Points

• Taxpayers should collate records demonstrating that their assessed amount meets or exceeds correct liability (or that the assessment/computation was properly made), and confirm they have not impugned the original assessment under the listed sections for the relevant year before making a claim under sub-section (2).
• Assessing officers should document the factual basis for accepting or, if permissible, rejecting a claim-however, procedural rules governing this are Not stated in the document.
• Advisers should note the substantive shift in wording from "may" to "shall" (as presented) and consider the implications for appeals and administrative practice, while recognizing that procedural modalities and higher court interpretation are Not stated in the document.

Full Text:

Section 285 Other provisions.