Amendment of assessment on appeal
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
If as a result of an appeal under section 356 or 357 or 362, any change is made in the assessment of a body of individuals or an association of persons, or a new assessment is directed in such cases, the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal, shall pass an order authorising the Assessing Officer to either amend the assessment of any member of the body or association or make a fresh assessment on such member.
FAQs on Section 371 of Income Tax Act 2025
What is the purpose of Section 371 under the Income Tax Act, 2025?
Section 371 enables the amendment or fresh assessment of an individual member of a body of individuals (BOI) or association of persons (AOP) when the assessment of the BOI or AOP is altered as a result of an appeal.
Which appellate authorities can invoke Section 371?
The Joint Commissioner (Appeals), Commissioner (Appeals), and the Appellate Tribunal have the authority to direct an Assessing Officer under Section 371.
When can an assessment be amended under Section 371?
An assessment can be amended when an appeal under section 356, 357, or 362 results in a change to the assessment of a BOI or AOP.
Can a fresh assessment be made under this section?
Yes, if directed by the appellate authority, the Assessing Officer may make a fresh assessment on any member of the BOI or AOP.
Does Section 371 apply only when there is an appeal?
Yes, this section is triggered only when there is a change or new direction as a result of an appeal under the specified sections.
Is prior notice to the member mandatory before making an amendment under Section 371?
The section itself does not specify procedural requirements like notice, but general principles of natural justice and procedural provisions of the Act would apply.
What happens if the original assessment of the BOI or AOP is cancelled on appeal?
If the original assessment is cancelled and a fresh assessment is directed, then fresh assessments of the members can also be made under Section 371.
Is this section applicable to firms or companies?
No, Section 371 specifically applies to a body of individuals or an association of persons, not to firms or companies.
From which date is Section 371 effective?
Section 371 is effective from 1st April, 2026.
Does the Assessing Officer have discretion to amend the member’s assessment on his own under Section 371?
No, the Assessing Officer can act only when authorized by the Joint Commissioner (Appeals), Commissioner (Appeals), or Appellate Tribunal under this section.
