Income Tax 2025

Appearance

Issue of notice. ​

280(1) ​

  • (a) Before making the assessment, reassessment or recomputation under section 279, the Assessing Officer shall, subject to the provisions of section 281, issue a notice to the assessee, along with a copy of the order passed under section 281(3).
  • (b) the notice referred to in clause (a) shall require the assessee to furnish, within such period as may be specified therein, a return of his income or income of any other person in respect of whom he is assessable under this Act during the relevant tax year; and.
  • (c) the period specified in the notice referred to in clause (a) shall not exceed three months from the end of the month in which such notice is issued.

280(2) ​

The return of income required under sub-section (1) shall be furnished in such form, verified in such manner and setting forth such other particulars, as prescribed, and the provisions of this Act shall apply accordingly, as if such return were a return required to be furnished under section 263.

280(3) ​

Any return of income required under sub-section (1), furnished after the expiry of the period specified in the notice under the said sub-section, shall not be deemed to be a return under section 263.

280(4) ​

No notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant tax year.

280(5) ​

No notice under this section shall be issued without prior approval of the specified authority, where the Assessing Officer has received––

  • (a) information under the scheme notified under section 260; or
  • (b) directions from the Approving Panel under section 274(6); or
  • (c) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law.

280(6) ​

For the purposes of this section and section 281, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means—

  • (a) any information in the case of the assessee for the relevant tax year as per the risk management strategy formulated by the Board from time to time;
  • (b) any audit objection to the effect that the assessment in the case of the assessee for the relevant tax year has not been made as per this Act;
  • (c) any information received under an agreement referred to in section 159 of this Act;
  • (d) any information made available to the Assessing Officer under the scheme notified under section 260;
  • (e) any information which requires action in consequence of the order of a Tribunal or a Court;
  • (f) any information in the case of the assessee emanating from the survey conducted under section 253, other than under sub-section (4) of the said section;
  • (g) any directions in the case of the assessee given by the Approving Panel under section 274(6);
  • (h) any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under this Act by way of appeal, reference or revision, or by a Court in any proceeding under any other law.
Explanation

Section Summary: ​

Section 280 of the new income tax law outlines the process for issuing notices by the Assessing Officer (AO) before making an assessment, reassessment, or recomputation under Section 279. It specifies the conditions under which such notices can be issued, the requirements for the taxpayer to respond, and the time limits for compliance. The section also defines what constitutes "information" that suggests income has escaped assessment, and mandates prior approval from a specified authority in certain cases.

Key Changes: ​

  1. Notice Requirements: The AO must issue a notice to the taxpayer before making an assessment, reassessment, or recomputation. This notice must include a copy of the order passed under Section 281(3).
  2. Time Limit for Response: The taxpayer must furnish a return of income within a specified period, which cannot exceed three months from the end of the month in which the notice is issued.
  3. Prior Approval: In specific cases (e.g., information received under Section 260 or directions from the Approving Panel), the AO must obtain prior approval from a specified authority before issuing a notice.
  4. Definition of "Information": The section explicitly defines what constitutes "information" that suggests income has escaped assessment, including audit objections, court orders, and information from risk management strategies.

Practical Implications: ​

  1. For Taxpayers:
    • Taxpayers must respond to notices within the specified time frame (up to three months) to avoid penalties or adverse consequences.
    • Late submissions of returns under this section will not be treated as valid returns under Section 263.
  2. For Assessing Officers:
    • AOs must ensure they have valid "information" suggesting escaped income before issuing a notice.
    • They must follow the procedural requirements, such as obtaining prior approval in specific cases.
  3. For Businesses:
    • Businesses must maintain accurate records and be prepared to respond to notices promptly, especially if they are flagged under risk management strategies or audit objections.

Critical Concepts: ​

  1. Escaped Income: Income that was not reported or underreported in the original assessment, leading to a lower tax liability.
  2. Specified Authority: A higher authority whose approval is required before issuing a notice in certain cases, such as when information is received under Section 260 or from the Approving Panel.
  3. Risk Management Strategy: A framework developed by the tax board to identify high-risk cases or discrepancies in tax filings.
  4. Interaction with Other Laws: This section interacts with Sections 260, 274(6), and 281, which deal with information sharing, approval processes, and procedural requirements.

Compliance Steps: ​

  1. For Taxpayers:
    • Respond to notices within the specified time frame (up to three months).
    • Ensure the return of income is filed in the prescribed form and includes all required particulars.
    • Maintain accurate records to substantiate income and deductions claimed.
  2. For Assessing Officers:
    • Verify that there is valid "information" suggesting escaped income before issuing a notice.
    • Obtain prior approval from the specified authority in cases involving information under Section 260, directions from the Approving Panel, or court orders.
    • Issue notices with a copy of the order under Section 281(3) and specify the time limit for response.

Examples: ​

  1. Scenario 1: A taxpayer filed their income tax return for FY 2022-23, but the AO receives information from a risk management strategy indicating unreported income from a foreign source. The AO issues a notice under Section 280, requiring the taxpayer to file a revised return within three months.

    • Outcome: The taxpayer must file the revised return within the specified time. If they fail to do so, the return will not be considered valid under Section 263.

  2. Scenario 2: An audit objection reveals that a business underreported its income by not including cash sales in its original return. The AO must obtain prior approval from the specified authority before issuing a notice under Section 280.

    • Outcome: Once approved, the AO issues the notice, and the business must file a revised return within three months.

This section ensures a structured and transparent process for addressing cases of escaped income while safeguarding taxpayer rights through procedural safeguards like prior approval and defined time limits.