Reassessment Under Income-tax Act, 2025: Sections 279–286, Six-Lock Test & Limitation

Summary: The Income-tax Act, 2025 provides the statutory framework for reassessment of income escaping assessment under Sections 279 to 286. The provisions deal with the power of the Assessing Officer to reassess escaped income, issuance of reassessment notices, preliminary show-cause proceedings, limitation periods, consequences of appellate or judicial orders, sanction by the specified authority and the time limit for completing reassessment. A practical method of examining these proceedings is the six-lock validity test, which checks jurisdiction, procedural fairness, statutory approval, notice limitation, permissible scope and completion limitation. The framework distinguishes between the preliminary notice under Section 281 and the reassessment notice under Section 280. Under Section 282, the ordinary outer limits are four years for the preliminary notice and four years and three months for the reassessment notice, with extended periods of six years and six years and three months where the prescribed ₹50 lakh threshold is satisfied. Section 286 separately governs the time available for completing reassessment, ordinarily one year from the end of the financial year in which the Section 280 notice was served, subject to applicable statutory adjustments. The following guide explains the statutory mapping from the Income-tax Act, 1961, the information categories under Section 280(6), the procedural flow, common jurisdictional objections, practical examples and the distinction between notice limitation and assessment completion limitation.

Reassessment Under Income-tax Act, 2025: Sections 279–286 – Six-Lock Validity Test and Practical Cheat Sheet | The Six Locks: Reassessment Validity Test

Reassessment under the Income-tax Act, 2025 must satisfy the applicable statutory requirements. The six-lock model provides a convenient preliminary checklist for identifying defects in reassessment proceedings.

Practical test: Examine these requirements in sequence. A failure of an applicable mandatory requirement may provide a ground for challenging the proceedings. The consequences of any particular defect must be assessed with reference to the statutory exceptions, saving provisions and relevant judicial decisions.

Section-Wise Reassessment Framework Under Income-tax Act, 2025

Section 279: Power to Reassess Escaped Income

Section 279 empowers the Assessing Officer to assess or reassess income chargeable to tax that has escaped assessment for the relevant tax year. It also covers recomputation of losses, depreciation allowances and other allowances or deductions, subject to the applicable provisions.

Section 279(2) also permits the Assessing Officer to examine additional issues of escaped income coming to notice during reassessment proceedings, notwithstanding that the preliminary procedure under Section 281 has not been followed separately for those additional issues.

Consequently, the permissible scope of reassessment should not be described as invariably restricted to the issues originally identified in the reopening notice. The statutory power concerning subsequently discovered issues must also be considered.

Section 280: Notice Where Income Has Escaped Assessment

Section 280 governs the issuance of a notice before reassessment or recomputation under Section 279.

The notice requires the assessee to furnish a return for the relevant tax year within the specified period. The provision operates together with Section 281, which prescribes the preliminary procedure, and Section 282, which prescribes the applicable limitation periods.

Section 280(6): Information Suggesting Escapement of Income

The supplied cheat sheet identifies the following statutory information categories as relevant to the initiation of reassessment proceedings:

• Information identified through the Risk Management Strategy formulated by the Central Board of Direct Taxes.
• Audit objections concerning the assessment.
• Information received under international information-exchange arrangements referred to in Section 159.
• Information made available under a scheme notified under Section 260.
• Information requiring action in consequence of a Tribunal or Court order.
• Information emanating from a survey under Section 253, subject to the specified exclusion.
• Directions from the Approving Panel under Section 274(6).
• Relevant findings or directions in proceedings under the Income-tax Act or other laws.

For practical scrutiny, the assessee should identify the category of information relied upon by the Assessing Officer and examine whether the statutory conditions for using that information have been satisfied.

Section 281: Show-Cause Notice, Reply and Decision

Section 281 provides the preliminary procedure ordinarily required before issuing a reassessment notice under Section 280.

Step 1: Issue of Show-Cause Notice

The Assessing Officer provides an opportunity to explain why reassessment proceedings should not be initiated, along with the information suggesting escapement of income.

Step 2: Consideration of Assessee’s Reply

The Assessing Officer must consider the material available and the explanation submitted by the assessee.

Step 3: Order Determining Whether Reassessment Should Proceed

Following the applicable statutory procedure and approval requirements, the Assessing Officer determines whether it is a fit case for issuance of notice under Section 280.

Important: The supplied cheat sheet also recognises exceptions under Section 281(4). The preliminary procedure should therefore not be described as mandatory without exception in every reassessment case.

Section 282: Limitation for Reassessment Notices

Section 282 prescribes separate time limits for notices under Sections 280 and 281.

The prescribed ₹50 lakh threshold and the nature of the material supporting the alleged escapement must be examined under the statutory language. Section 282 also contains other restrictions and applicable rules that must be considered when calculating limitation.

Section 283: Reassessment Pursuant to Appellate or Judicial Orders

Section 283 addresses cases in which reassessment notices are issued in consequence of or to give effect to specified findings or directions in appellate or judicial proceedings.

The provision permits notices in specified circumstances notwithstanding the ordinary limitation rules, subject to its statutory restrictions. The proviso and the position at the time of the original order must be examined before concluding that a notice may be issued without an ordinary time limit.

Section 284: Sanction for Issue of Notice

Section 284 identifies the specified authority for approval under the reassessment framework.

The existence of the prescribed approval, the authority granting it and compliance with the statutory approval procedure should be checked as part of the jurisdictional review.

Section 285: Other Provisions Relating to Reassessment

Section 285 contains other provisions relating to reassessment, including the applicable rate of tax and circumstances in which proceedings may be dropped.

These provisions should be examined alongside the principal reassessment powers and procedural safeguards rather than omitted from a complete statutory review.

Section 286: Time Limit for Completion of Reassessment

Section 286 governs the time limit for completion of assessment, reassessment and recomputation.

For reassessment under Section 279, the general completion period identified in the supplied cheat sheet is one year from the end of the financial year in which the notice under Section 280 was served.

This period is separate from the limitation for issuing the notice. Applicable statutory exclusions, extensions and special provisions must be considered when determining the final deadline.

The Two Clocks: Notice Limitation and Reassessment Completion

The supplied cheat sheet distinguishes two principal limitation calculations: the time available for initiating reassessment through the statutory notices and the time available for completing the reassessment order.

Clock 1: Limitation for Issuing Notices

The notice limitation under Section 282 is calculated with reference to the end of the relevant tax year, subject to the applicable statutory provisions.

• Section 281 show-cause notice: ordinarily four years, or six years where the extended limitation conditions apply.
• Section 280 reassessment notice: ordinarily four years and three months, or six years and three months where the extended limitation conditions apply.

Clock 2: Limitation for Completing the Reassessment

The completion limitation under Section 286 is ordinarily calculated from the end of the financial year in which the Section 280 notice was served.

The general period identified in the supplied material is one year, subject to applicable statutory extensions and exclusions.

Illustration: Reassessment Notice Served in FY 2026-27

Reassessment Procedure: Step-by-Step Flow

The flowchart in the supplied cheat sheet can be expressed as the following practical sequence:

• Identify escaped income: Determine whether the Assessing Officer possesses qualifying information suggesting that income chargeable to tax has escaped assessment.
• Check Section 282 limitation: Examine whether the proposed preliminary and reassessment notices fall within their respective statutory periods.
• Follow Section 281 procedure: Where applicable, issue the show-cause notice, consider the assessee’s reply and pass the prescribed order.
• Obtain the required approval: Verify compliance with the sanction provisions under Section 284.
• Issue Section 280 notice: Require the assessee to furnish the return within the prescribed period.
• Conduct reassessment: Examine escaped income and additional issues falling within the statutory powers under Section 279.
• Complete the order: Pass the reassessment order within the applicable limitation under Section 286.

The sequence must be read with the statutory exceptions under Section 281 and the special provisions for cases arising from appellate or judicial orders under Section 283.

Common Mistakes in Reassessment Proceedings

1. Ignoring the Preliminary Procedure Under Section 281

Where the preliminary procedure applies, failure to provide the required opportunity or comply with the prescribed decision-making process may affect the validity of the subsequent notice.

2. Overlooking Sanction Under Section 284

The existence of a notice does not itself establish compliance with the statutory approval requirement. The specified authority and approval stage should be verified.

3. Confusing Notice Limitation with Completion Limitation

Section 282 and Section 286 address different stages. A reassessment notice issued within time does not automatically mean that the eventual reassessment order was completed within time.

4. Applying the Old Three-Year Notice Period Without Checking the New Act

The ordinary notice limits in the supplied Income-tax Act, 2025 framework are four years for Section 281 and four years and three months for Section 280.

5. Assuming That Every Case Has an Extended Limitation Period

The extended period is subject to the prescribed statutory conditions. The Assessing Officer must establish the relevant basis for invoking it.

6. Treating Section 282 as a Provision Governing Reassessment Scope

Section 282 governs notice limitation. The power to examine additional escaped-income issues is addressed by Section 279(2).

7. Ignoring the Exceptions Under Sections 281 and 283

The preliminary hearing procedure and ordinary notice limitation are subject to specified statutory exceptions. The correct provision must be applied to the particular facts.

8. Failing to Identify the Information Relied Upon Under Section 280(6)

Where reassessment is initiated on information suggesting escaped income, the material relied upon should be examined against the categories specified in Section 280(6).

Practical Self-Test: Six Reassessment Questions

Q1. A Reassessment Notice Is Issued Four Years After the End of the Relevant Tax Year. Is It Within Time?

Answer: It is within the ordinary four-year-and-three-month outer period prescribed for a Section 280 notice, subject to the other applicable statutory conditions. The timing of the Section 281 notice must be checked separately.

Q2. A Notice Is Issued Five Years After the Relevant Tax Year, with Alleged Escaped Income of ₹60 Lakh. Is It Valid?

Answer: The notice may fall within the extended six-year-and-three-month period if the statutory conditions for invoking the extended limitation are satisfied. The amount alone should not be treated as proof of compliance with every jurisdictional requirement.

Q3. The Assessing Officer Issues a Section 280 Notice Without Following Section 281. What Is the Consequence?

Answer: The notice may be challenged for non-compliance with the prescribed preliminary procedure. However, the statutory exceptions under Section 281(4) must first be examined.

Q4. A Section 280 Notice Is Served During FY 2026-27 and the Reassessment Order Is Passed in September 2028. Is the Order Within Time?

Answer: Under the ordinary one-year completion rule, the deadline would be 31 March 2028. An order passed in September 2028 would therefore be beyond that ordinary deadline, unless an applicable statutory extension or exclusion alters the calculation.

Q5. The Assessing Officer Relies on Information That Does Not Fall Within the Categories Under Section 280(6). What Should Be Examined?

Answer: The assessee should examine whether the material satisfies the statutory requirements for information suggesting escaped income. A failure to establish the required statutory basis may support a jurisdictional objection.

Q6. A Tribunal Directs Reassessment After the Ordinary Notice Limitation Has Expired. Can a Notice Still Be Issued?

Answer: Section 283 provides special rules for notices issued in consequence of or to give effect to specified findings or directions. Its conditions and restrictions must be examined before concluding that a notice is permissible.

Old Income-tax Act, 1961 vs New Income-tax Act, 2025: Section Mapping

The above mapping is a subject-wise comparison of the principal reassessment provisions. It should not be treated as confirmation that every provision in the 1961 Act and the 2025 Act is identical in wording or operation.

Conclusion

The reassessment framework under the Income-tax Act, 2025 requires attention to both substantive jurisdiction and procedural compliance. Sections 279 to 286 establish the power to reassess, the preliminary safeguards, notice requirements, limitation periods, sanction requirements, special cases arising from appellate or judicial orders and the time limit for completion.

The six-lock test offers a useful starting point for examining reassessment proceedings. However, it is a practical checklist rather than a substitute for the statutory text. Each notice and order must be evaluated against the applicable provisions, exceptions, transitional rules and relevant facts.

Editorial Note: This article is adapted from the supplied six-page reassessment cheat sheet. Its section mapping and limitation framework have been clarified where the source contains overlapping or inconsistent descriptions. In particular, Section 282 is treated as the notice-limitation provision, while Section 279(2) addresses additional issues arising during reassessment. The timelines discussed are general rules and remain subject to applicable statutory conditions, exclusions, extensions and transitional provisions.