Section 288 — Other amendments. Successor to s.155 of the 1961 Act.
Section 288 is in Chapter XVI — Procedure for Assessment, which runs from section 268 to section 301.
Sub-section (1) gives the Assessing Officer a power of consequential amendment: he may carry out the actions in column B of the Table, for the reasons stated there and subject to the conditions in column C, within the four years referred to in section 287(8) reckoned from the time in column D, and section 287 applies so far as may be.
The Table has eleven entries. Sl. No. 1 amends a partner's assessment where remuneration determined in the firm's completed assessment is later found not deductible under section 35(e). Sl. No. 2 does the same for a member of an association of persons or body of individuals whose share was omitted or wrongly included. Sl. No. 3 recomputes succeeding years' income where a loss or depreciation carried forward under section 111(1), 112(1), 113(2) or 115(1) is recomputed following section 279 proceedings. Sl. No. 4 recomputes a transferor company's income where an exempted intra-group gain becomes chargeable under section 71(1) because the asset was converted into or treated as stock-in-trade, or the whole share capital ceased to be held, before eight years from the transfer expire. Sl. No. 5 excludes a capital gain that becomes not chargeable under a section referred to in section 89 once the new asset is acquired or the gain deposited or invested within the extended period. Sl. No. 6 allows a section 144 deduction once income in convertible foreign exchange is received in or brought into India. Sl. No. 7 gives credit for foreign tax earlier refused as under dispute, once the dispute is settled and the assessee furnishes evidence of settlement and payment and an undertaking that no credit has been or will be claimed for any other tax year, within six months from the end of the month of settlement. Sl. No. 8 recomputes a capital gain where the stamp duty value adopted under section 78(1) is revised in an appeal, revision or reference under section 78(2)(b). Sl. No. 9 recomputes where compensation on a compulsory acquisition, or consideration determined or approved by the Central Government or the Reserve Bank of India, is later reduced by a court, Tribunal or other authority. Sl. No. 10 withdraws a section 152 deduction where a patent is revoked or the assessee's name excluded from the register by the Controller or the High Court under the Patents Act, 1970. Sl. No. 11 shifts credit for tax deducted at source to the tax year in which the income was returned, and not to any other year, where the tax was paid to the Central Government in a later tax year and the assessee applies in the prescribed form within two years from the end of the tax year of deduction.
Sub-section (2)(a) deals with transfer pricing: where the arm's length price is determined under section 166(6) for a tax year and the Transfer Pricing Officer has declared the assessee's option valid under section 166(9) for the two consecutive tax years immediately following, the Assessing Officer shall recompute total income for those two years by amending the assessment order or the intimation or deemed intimation under section 270(1), in conformity with the price determined under section 166(12) and taking into account directions under section 275(5), within three months from the end of the month in which the assessment for the option year is completed, with sections 165(7) and (8) applying. Clause (b) gives a fresh three months from the end of the month in which the order or intimation for those years is made, where it comes later.
Assessments are completed on the facts as they stand, and later events — an order in another person's case, a settled foreign tax dispute, a revised stamp valuation, a reduced compensation award, a revoked patent, tax deducted in a different year — can make a closed assessment wrong. The section lists the situations in which that later event may be carried back into an existing order, ties each to its own starting point for the four-year limit, and borrows section 287 for the procedure.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Outer period for every amendment under sub-section (1) | Four years | The four years referred to in section 287(8), reckoned from the time in column D for that entry | Sub-section (1) |
| Period after which the Sl. No. 4 deemed gain no longer arises | Eight years from the date of the transfer | The conversion into stock-in-trade, or cessation of holding the whole share capital, must occur before it expires | Sub-section (1), Table Sl. No. 4 |
| Window to furnish evidence of a settled foreign tax dispute | Six months | From the end of the month of settlement; evidence of settlement and payment plus an undertaking that no credit has been or will be claimed for any other tax year | Sub-section (1), Table Sl. No. 7(b) |
| Window to apply for tax deducted at source to be credited in the year the income was returned | Two years | From the end of the tax year in which the tax was deducted; application in such form as may be prescribed | Sub-section (1), Table Sl. No. 11(b) |
| Time to recompute income for the two option years | Three months | From the end of the month in which the assessment is completed for the tax year for which the arm's length price was determined | Sub-section (2)(a) |
| Fallback time where the later years' order or intimation comes afterwards | Three months | From the end of the month in which that order, intimation or deemed intimation under section 270(1) is made | Sub-section (2)(b) |
The four-year period is uniform but its starting point is not: column D gives each entry its own trigger, usually the end of the financial year in which the later order, settlement, receipt or deduction occurred, so an assessment closed long ago can still be amended on that narrow point. The power is not general — it is confined to the eleven actions in column B, each with its own condition. Two entries depend on the assessee acting: Sl. No. 7 needs evidence and an undertaking within six months of settlement, and Sl. No. 11 needs an application within two years of the end of the tax year of deduction, after which the credit cannot be shifted at all. Sub-section (2) is mandatory in terms and runs on a three-month clock from completion of the option year's assessment.
A firm's assessment is revised and part of the partners' remuneration is found not deductible under section 35(e). Once that order is passed in the firm's case, the Assessing Officer may amend each partner's already completed assessment to adjust the corresponding income, and the four years run from the end of the financial year in which the firm's order was passed. A partner whose own assessment closed years earlier is still open on that one point.
As an order amending an assessment, intimation or deemed intimation already made; the order identifies the Table entry relied on, and section 287 governs how it is passed. Table Sl. No. 11 runs the other way — the assessee applies, in the prescribed form, to move tax deducted at source credit to the year the income was returned.
within four years referred to in section 287(8) which shall be reckoned from the time as specified in column D
the Assessing Officer shall proceed to recompute the total income of the assessee for the said two consecutive tax years
See the full 1961 to 2025 concordance.
All of them are in the Rules 2026 index.
