Modification and revision of notice in certain cases
[Section-290 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 290(1) of Income Tax Act 2025
290(1) The Assesssing Officer shall serve on the assessee a modified notice of demand specifying the sum payable, if any, and such notice shall be treated as a notice under section 289 and the provisions of this Act shall accordingly, apply in relation to such notice, where—
- (a) any tax, interest, penalty, fine or any other sum in respect of which a notice of demand has been issued earlier under section 289; and
- (b) such tax, interest, penalty, fine or any other sum is reduced as a result of an order of the Adjudicating Authority as defined in section 5(1) of the Insolvency and Bankruptcy Code, 2016.
Section 290(2) of Income Tax Act 2025
290(2) The modified notice of demand as referred to in sub- section (1) shall be revised where the order referred to in sub-section (1)(b) is modified by the National Company Law Appellate Tribunal or the Supreme Court.
FAQs on Section 290 of Income Tax Act 2025
What is the purpose of Section 290 of the Income Tax Act, 2025?
Section 290 provides for issuing a modified notice of demand in cases where the tax liability is reduced due to an order by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016.
When can a modified notice of demand be issued under Section 290(1)?
A modified notice of demand can be issued when there is a reduction in tax, interest, penalty, fine or other sums originally demanded under Section 289, following an order by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016.
Who issues the modified notice of demand under Section 290?
The Assessing Officer is responsible for issuing the modified notice of demand under this section.
How is the modified notice of demand treated under the Act?
The modified notice is treated as a notice under Section 289, and all related provisions of the Act apply accordingly.
Does Section 290(1) require a previous notice under Section 289 to have been issued?
Yes, the issuance of a modified notice under Section 290(1) is contingent on a previous notice of demand having been issued under Section 289.
What triggers the revision of the modified notice under Section 290(2)?
A revision is triggered if the order of the Adjudicating Authority, which led to the original modification, is subsequently modified by either the National Company Law Appellate Tribunal or the Supreme Court.
What happens if the NCLAT or Supreme Court alters the earlier order that reduced the tax liability?
In such a case, the Assessing Officer must revise the earlier modified notice of demand in line with the updated order.
Is the revised notice also treated as a notice under Section 289?
Yes, both the modified and revised notices under Section 290 are treated as notices under Section 289.
Does Section 290 apply only in cases of insolvency proceedings?
Yes, Section 290 specifically applies when the reduction in tax liability results from an order under the Insolvency and Bankruptcy Code, 2016.
Can a taxpayer challenge the modified or revised notice issued under Section 290?
Yes, the taxpayer retains the right to appeal or challenge such notices in accordance with the general provisions of the Act.
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