Section 285 — Other provision. Successor to s.152 of the 1961 Act.
Section 285 is in Chapter XVI — Procedure for Assessment, which runs from section 268 to section 301.
Sub-section (1) fixes the rate in a reassessment: in an assessment, reassessment or recomputation made under section 279, tax is chargeable at the rate or rates at which it would have been charged had the income not escaped assessment. Sub-section (2) allows the proceeding to be stopped. Proceedings initiated under section 279 are to be dropped on a claim made by the assessee where he shows both that he had already been assessed on an amount not lower than what he would rightly be liable for, even taking into account the income said to have escaped assessment or a properly made assessment or computation, and that he has not impugned any part of the original assessment order for that tax year under section 356, 357 or 378. Sub-section (3) is the price of that claim: an assessee who makes it is not entitled to reopen matters concluded by an order under section 287, 288, 365(10), 368 or 377.
Reassessment is about income that escaped, not about a change of rate, so sub-section (1) freezes the rates at those that would have applied in the original year. Sub-section (2) then spares everyone a pointless exercise where the assessee has already been assessed on enough: if bringing in the escaped income would not increase the right liability, there is nothing to reassess. Sub-section (3) stops that concession being used as a route back into settled issues.
The claim under sub-section (2) has two limbs and both must be established by the assessee — the arithmetic that he has already been assessed on an amount not lower than his right liability, and the clean record that he has not challenged any part of the original assessment order under section 356, 357 or 378. A pending or decided appeal against any part of that order therefore defeats the claim entirely. Sub-section (3) makes the choice one-way: once the claim is made, matters already concluded by an order under section 287, 288, 365(10), 368 or 377 are shut, so the assessee gives up the ability to unsettle them in return for the proceeding being dropped. And sub-section (1) means a reassessment carries no rate advantage or disadvantage of its own — the rates are those that would have applied had the income never escaped.
An assessee is assessed on Rs. 90 lakh; a section 279 proceeding is later started on Rs. 8 lakh said to have escaped assessment. He shows that his correct liability, even after including the Rs. 8 lakh, would be on an amount no higher than the Rs. 90 lakh already assessed, and that he has filed no appeal or revision against any part of that assessment order. On that claim the proceeding is dropped under sub-section (2) — but sub-section (3) then bars him from reopening anything already concluded by an order under section 287, 288, 365(10), 368 or 377.
A taxpayer meets this section in a reassessment proceeding started by a notice under section 279, either in the tax computation of the resulting order or in a written claim filed to have that proceeding dropped.
the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment
he has not impugned any part of the original assessment order for the relevant tax year under section 356 or 357 or 378
See the full 1961 to 2025 concordance.