Other provisions
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 285(1) of Income Tax Act 2025
285(1) In an assessment, reassessment or recomputation made under section 279, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment.
Section 285(2) of Income Tax Act 2025
285(2) The Assessing Officer may drop the proceedings initiated under section 279 on a claim made by the assessee to the effect that—
- (a) he had been assessed on an amount not lower than what he would be rightly liable for, even if the income alleged to have escaped assessment had been taken into account, or the assessment or computation had been properly made; and
- (b) he has not impugned any part of the original assessment order for the relevant year under section 356 or 357 or 378.
Section 285(3) of Income Tax Act 2025
285(3) Where a claim has been made by an assessee under sub-section (2), he shall not be entitled to reopen matters concluded by an order under section 287 or 288 or 365(10) or 368 or 377.
FAQs on Section 285 of Income Tax Act 2025
What is the main purpose of Section 285 of the Income Tax Act, 2025?
Section 285 provides specific provisions related to assessments, reassessments, or recomputations under section 279, focusing on the applicable tax rates and conditions under which such proceedings may be dropped by the Assessing Officer.
What does Section 285(1) state about the tax rate for reassessed or recomputed income?
Section 285(1) provides that tax in cases of assessment, reassessment, or recomputation under section 279 shall be charged at the same rate or rates as would have applied if the income had originally been assessed correctly.
Can an assessee request the Assessing Officer to drop reassessment proceedings?
Yes, under Section 285(2), an assessee can claim that the proceedings under section 279 be dropped if certain conditions are satisfied.
What are the conditions under which the Assessing Officer may drop proceedings under Section 285(2)?
The Assessing Officer may drop the proceedings if the assessee proves that:
(a) they were assessed on an amount not less than what would be rightly liable, even if the income alleged to have escaped had been included, and
(b) they have not challenged any part of the original assessment for that year under section 356, 357, or 378.
If the Assessing Officer drops the proceedings based on assessee’s claim under Section 285(2), can the assessee reopen concluded matters?
No, as per Section 285(3), once a claim is made under subsection (2), the assessee cannot reopen matters that have been concluded by an order under section 287, 288, 365(10), 368, or 377.
What does ‘income alleged to have escaped assessment’ refer to in this context?
It refers to income that the Assessing Officer believes was not included in the original assessment and thus needs to be reassessed or recomputed under section 279.
Does Section 285(1) permit the use of a different tax rate for escaped income?
No, Section 285(1) mandates that the same rate or rates that would have applied originally must be used when taxing the escaped income.
Is it mandatory for the Assessing Officer to accept the assessee’s claim under Section 285(2)?
No, the decision is at the discretion of the Assessing Officer. The officer must be satisfied that both conditions under clause (a) and (b) are met for the proceedings to be dropped.
What happens if the assessee has appealed the original assessment order?
If the assessee has challenged any part of the original assessment under section 356, 357, or 378, they are not eligible to claim relief under Section 285(2).
Can the assessee simultaneously claim under Section 285(2) and pursue an appeal or revision for the same year?
No, pursuing an appeal or revision under the specified sections would disqualify the assessee from making a claim under Section 285(2).
