The officer has reopened a very old year and says he is only giving effect to a finding in an appellate order, so limitation does not apply. Is that right, and what stops him?
Section 150(1) lifts the time limit in section 149: where an assessment, reassessment or recomputation is in consequence of or to give effect to a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may be issued at any time. Section 150(2) is the limit on that power and it is the provision that decides cases — sub-section (1) does not apply where the year in question could not have been assessed, by reason of any other time limit, at the moment the order that was the subject-matter of the appeal, reference or revision was made, so a year already dead on that date stays dead. The Supreme Court so held in K.M. Sharma, quashing notices for assessment years 1968-69 to 1971-72 and 1981-82, and the Constitution Bench in Murlidhar Bhagwan Das had already confined “finding” and “direction” to what was necessary for the year under appeal, so a remark about another year does not open it. Section 150 was substituted with retrospective effect from 1 February 2026: sub-section (1) is re-lettered and widened to a court in a proceeding under this Act, sub-section (2) gains a second measuring date, and a new sub-section (3) gives the department only three months from the end of the quarter in which the certified copy of the order reaches the jurisdictional Principal Commissioner or Commissioner. For a tax year beginning on or after 1 April 2026 the provision is section 283 of the Income-tax Act, 2025.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2026-02-01, reported as Section 150(2) of the Income-tax Act, 1961, as amended up to 2026. It bears on section 150, section 150(2), section 150(1), section 150(3), section 149, section 148, section 153(6), section 250, section 254, section 263, section 264, section 283 (Act of 2025) of the Income Tax Act 1961, in Reassessment & Reopening, Assessment & Scrutiny and How Tax Law Is Read matters.
This is the provision that separates a reopening you must fight on the merits from one you can kill on a date, and the date is not the one people reach for. Work an example. An assessment for assessment year 2013-14 is made and you appeal. The Commissioner (Appeals) disposes of that appeal on 20 August 2024 and, in deleting an addition, records that the receipt really belongs to assessment year 2011-12. The officer issues a notice under section 148 for 2011-12 and says section 150(1) lets him do it at any time. Do not start with whether 2011-12 is barred today; that is the wrong question and it is the one the officer wants you to answer. Start with 20 August 2024, the date the order that was the subject-matter of the appeal — the assessment order — was made, and ask whether on that date a notice for 2011-12 could still have been issued under the limitation then applicable. If it could not, section 150(2) switches section 150(1) off altogether and the notice is bad without more. That is K.M. Sharma, where the Supreme Court quashed notices for years as far back as 1968-69 on exactly this reasoning. Then, and only then, take the second point: Murlidhar Bhagwan Das confines a finding to what was necessary to decide the year that was actually before the appellate authority, so an observation about 2011-12 made while deciding 2013-14 is very often not a finding or a direction at all, and if it is not, section 150(1) never engaged in the first place. Since 1 February 2026 there is a third point, and it is the easiest of the three to check: sub-section (3) requires the notice to issue within three months from the end of the quarter in which the jurisdictional Principal Commissioner or Commissioner received the certified copy of the order. Ask for the date of receipt in writing. If the certified copy came in during the quarter ended 31 December 2026, the notice had to go out by 31 March 2027, and a notice dated later than that fails on the face of the section however good the finding behind it.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Marginal note: “Provision for cases where assessment is in pursuance of an order on appeal, etc”. The section as it now stands, on the departmental page stamped Year 2026, against which the footnote reads “Substituted by Act No. 4 of 2026, w.r.e.f. 1-2-2026” — that Act being the Finance Act, 2026, which received assent on 30 March 2026, and the substitution being made by its section 11, which enacts that “For section 150 of the Income-tax Act, the following section shall be substituted and shall be deemed to have been substituted with effect from the 1st day of February, 2026, namely:—”: 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation, in consequence of, or to give effect to, any finding or direction contained in an order passed by— (a) any authority in any proceeding under this Act by way of appeal, reference or revision; or (b) a court in any proceeding under this Act or any other law. (2) The provisions of sub-section (1) shall not apply in any case where the assessment or reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment or reassessment or recomputation could not have been made, by reason of any other provision limiting the time within which any action for assessment or reassessment or recomputation may be taken, at the time when,— (a) the order which was the subject matter of the appeal, reference or revision, as the case may be, was made; or (b) the proceedings relating to assessment or reassessment or recomputation under this Act (other than those proceedings which have culminated in an order), which was the subject-matter before the Court, was initiated. (3) For the purposes of sub-section (1), notice under section 148 shall be issued within a period of three months from the end of the quarter in which the certified copy of the order of the authority or the Court, as the case may be, is received by the jurisdictional Principal Commissioner or Commissioner. The text it replaced, which is what every decision before 2026 was given on, and which is printed on the departmental pages stamped Year 2025 and Year 2024 (No. 2): 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken.
Sub-section (2) is meaningless on its own, so read the pair. Sub-section (1) is an exception to section 149. Where an assessment, reassessment or recomputation is in consequence of, or to give effect to, a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may go out at any time, and the ordinary outer dates in section 149 do not bind. Sub-section (2) then takes most of that back. Sub-section (1) does not apply at all where the year now sought to be assessed was, by reason of some other time limit, already beyond assessment at the moment the order under appeal, reference or revision was made. The test is not whether the year is barred today. It is whether it was barred on that earlier date. A year that was already dead when the order was passed cannot be brought back by an appellate remark about it, however emphatic. That is exactly what the Supreme Court decided in K.M. Sharma v Income Tax Officer, Ward 13(7), New Delhi, Civil Appeal No. 7742 of 1997, decided on 11 April 2002 by a Bench of three — Santosh Hegde and Dharmadhikari JJ sitting with the Chief Justice of India — and reported as AIR 2002 SC 1715 and (2002) 254 ITR 772. The Court held that the amendment to sub-section (1), which took effect on 1 April 1989, applies prospectively from that date, and that sub-section (1) as so amended “does not enable the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989”. Of sub-section (2) itself the Court said it “aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation”. The appeal was allowed with costs, the Delhi High Court's judgment of 24 May 1996 was set aside, and the notices under sections 148 and 142 for assessment years 1968-69 to 1971-72 and 1981-82 were quashed. Before you get to sub-section (2), though, there is a prior question, and it is the one that disposes of more notices: is there a finding or direction at all? The words come from the second proviso to section 34(3) of the Indian Income-tax Act, 1922, and a Constitution Bench construed them in Income-tax Officer, A-Ward, Sitapur v Murlidhar Bhagwan Das, decided on 29 January 1964 and reported at [1964] 52 ITR 335. Five judges sat — Sinha CJ, Subba Rao, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar JJ. The majority of three took up the definition the Allahabad High Court had given in Pt. Hazari Lal v Income-tax Officer, Kanpur — that the word “finding” “will only cover material questions which arise in a particular case for decision by the authority hearing the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing” — and said in terms, “We agree with this definition of ‘finding’.” They held that an assessment or reassessment pursuant to such an order “must necessarily relate to the assessment of the year under review, revision or appeal, as the case may be”. Raghubar Dayal and Mudholkar JJ dissented, Mudholkar J taking the view that “the finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding it is not necessary that it should be the final and ultimate conclusion”. The Court recorded that “in view of the judgment of the majority, the appeal fails and is dismissed with costs”. The majority is the law, and the Supreme Court restated it in Commissioner of Income-tax, Bihar v Banwari Lal Agarwal, decided on 18 January 1971: the expressions “finding” and “direction” mean “respectively, a finding necessary for giving relief in respect of the assessment for the year in question, and a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned in that proviso”. Put together, the two decisions give a reader two separate answers to the same notice. Murlidhar Bhagwan Das says the observation the officer is relying on is probably not a finding or a direction at all if it was not necessary to decide the year that was before the appellate authority. K.M. Sharma says that even if it is, sub-section (2) stops it reviving a year that was already barred when the order under appeal was made. The substitution changes three things and leaves that core alone. It was made by section 11 of the Finance Act, 2026, which was assented to on 30 March 2026 and directs that the new section “shall be deemed to have been substituted with effect from the 1st day of February, 2026” — so it reaches back over notices issued in February and March 2026. First, sub-section (1) is split into clauses and clause (b) is widened: the old text reached a court only “in any proceeding under any other law”, and the new one reads “a court in any proceeding under this Act or any other law”. Second, sub-section (2) acquires a second measuring date in clause (b) for a court proceeding that has not culminated in an order: the date those assessment, reassessment or recomputation proceedings were initiated. Third, and this one is new in kind, section 150(3) puts a deadline on the department for the first time. The section 148 notice must issue within three months from the end of the quarter in which the certified copy of the order is received by the jurisdictional Principal Commissioner or Commissioner. Until 31 January 2026 section 150 had no outer date of its own at all; a certified copy received on, say, 5 May 2026 now carries a notice deadline of 30 September 2026, being three months from the end of the quarter ending 30 June 2026. The date of receipt is a departmental record, and you are entitled to ask for it. Nothing in the substitution touches what K.M. Sharma decided. Sub-section (2) still says that sub-section (1) does not apply to a year that could not have been assessed at the relevant moment, and the new clause (b) adds a measuring point rather than removing one. One thing section 150 does not do: it governs the notice, not the order. Where an assessment, reassessment or recomputation is made to give effect to a finding or direction in an order under section 250, 254, 260, 262, 263 or 264, or in an order of a court in a proceeding otherwise than by way of appeal or reference, section 153(6)(i) gives the officer twelve months from the end of the month in which that order is received or passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to complete it. Two clocks, two different triggers, and both worth checking. The boundary. Section 150 belongs to the Income-tax Act, 1961, repealed on 1 April 2026 by section 536(1) of the Income-tax Act, 2025. Section 536(2) continues it for assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeal in respect of any tax year beginning before 1 April 2026, including proceedings initiated on or after that date, which is what the Department's transition FAQ says at Q1.18. So a section 148 notice issued in 2027 for assessment year 2024-25 is still governed by section 150. For tax year 2026-27 onwards the provision is section 283 of the Income-tax Act, 2025, which was substituted by the same amending Act with effect from 1 April 2026 and carries the same shape: sub-section (1) keyed to a notice under section 280 and extended to directions of the Approving Panel under section 274(6), sub-section (2) with three measuring moments rather than two — the third being the date a reference was made to the Approving Panel under section 274(4) — and the same three-month rule in sub-section (3).
Not applicable — this is a statement of the statutory text as printed on the departmental section pages, with the amendment history taken from the footnote apparatus on those pages. The two Supreme Court decisions named in the body were read in their own text.
The provisions of sub-section (1) shall not apply in any case where the assessment or reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment or reassessment or recomputation could not have been made, by reason of any other provision limiting the time within which any action for assessment or reassessment or recomputation may be taken, at the time when,— (a) the order which was the subject matter of the appeal, reference or revision, as the case may be, was made
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Handle my notice → Ask a CA on WhatsAppSection 150(1) lifts the time limit in section 149: where an assessment, reassessment or recomputation is in consequence of or to give effect to a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may be issued at any time. Section 150(2) is the limit on that power and it is the provision that decides cases — sub-section (1) does not apply where the year in question could not have been assessed, by reason of any other time limit, at the moment the order that was the subject-matter of the appeal, reference or revision was made, so a year already dead on that date stays dead. The Supreme Court so held in K.M. Sharma, quashing notices for assessment years 1968-69 to 1971-72 and 1981-82, and the Constitution Bench in Murlidhar Bhagwan Das had already confined “finding” and “direction” to what was necessary for the year under appeal, so a remark about another year does not open it. Section 150 was substituted with retrospective effect from 1 February 2026: sub-section (1) is re-lettered and widened to a court in a proceeding under this Act, sub-section (2) gains a second measuring date, and a new sub-section (3) gives the department only three months from the end of the quarter in which the certified copy of the order reaches the jurisdictional Principal Commissioner or Commissioner. For a tax year beginning on or after 1 April 2026 the provision is section 283 of the Income-tax Act, 2025. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 150, section 150(2), section 150(1), section 150(3), section 149, section 148, section 153(6), section 250, section 254, section 263, section 264, section 283 (Act of 2025) of the Income Tax Act 1961. It is reported as Section 150(2) of the Income-tax Act, 1961, as amended up to 2026. This is the provision that separates a reopening you must fight on the merits from one you can kill on a date, and the date is not the one people reach for. Work an example. An assessment for assessment year 2013-14 is made and you appeal. The Commissioner (Appeals) disposes of that appeal on 20 August 2024 and, in deleting an addition, records that the receipt really belongs to assessment year 2011-12. The officer issues a notice under section 148 for 2011-12 and says section 150(1) lets him do it at any time. Do not start with whether 2011-12 is barred today; that is the wrong question and it is the one the officer wants you to answer. Start with 20 August 2024, the date the order that was the subject-matter of the appeal — the assessment order — was made, and ask whether on that date a notice for 2011-12 could still have been issued under the limitation then applicable. If it could not, section 150(2) switches section 150(1) off altogether and the notice is bad without more. That is K.M. Sharma, where the Supreme Court quashed notices for years as far back as 1968-69 on exactly this reasoning. Then, and only then, take the second point: Murlidhar Bhagwan Das confines a finding to what was necessary to decide the year that was actually before the appellate authority, so an observation about 2011-12 made while deciding 2013-14 is very often not a finding or a direction at all, and if it is not, section 150(1) never engaged in the first place. Since 1 February 2026 there is a third point, and it is the easiest of the three to check: sub-section (3) requires the notice to issue within three months from the end of the quarter in which the jurisdictional Principal Commissioner or Commissioner received the certified copy of the order. Ask for the date of receipt in writing. If the certified copy came in during the quarter ended 31 December 2026, the notice had to go out by 31 March 2027, and a notice dated later than that fails on the face of the section however good the finding behind it. If it applies to you, the first step is this: Identify the order the officer is relying on and get its date. Everything in section 150(2) is measured from the date the order that was the subject-matter of the appeal, reference or revision was made — not from the date of the appellate order and not from today.
Marginal note: “Provision for cases where assessment is in pursuance of an order on appeal, etc”. The section as it now stands, on the departmental page stamped Year 2026, against which the footnote reads “Substituted by Act No. 4 of 2026, w.r.e.f. 1-2-2026” — that Act being the Finance Act, 2026, which received assent on 30 March 2026, and the substitution being made by its section 11, which enacts that “For section 150 of the Income-tax Act, the following section shall be substituted and shall be deemed to have been substituted with effect from the 1st day of February, 2026, namely:—”: 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation, in consequence of, or to give effect to, any finding or direction contained in an order passed by— (a) any authority in any proceeding under this Act by way of appeal, reference or revision; or (b) a court in any proceeding under this Act or any other law. (2) The provisions of sub-section (1) shall not apply in any case where the assessment or reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment or reassessment or recomputation could not have been made, by reason of any other provision limiting the time within which any action for assessment or reassessment or recomputation may be taken, at the time when,— (a) the order which was the subject matter of the appeal, reference or revision, as the case may be, was made; or (b) the proceedings relating to assessment or reassessment or recomputation under this Act (other than those proceedings which have culminated in an order), which was the subject-matter before the Court, was initiated. (3) For the purposes of sub-section (1), notice under section 148 shall be issued within a period of three months from the end of the quarter in which the certified copy of the order of the authority or the Court, as the case may be, is received by the jurisdictional Principal Commissioner or Commissioner. The text it replaced, which is what every decision before 2026 was given on, and which is printed on the departmental pages stamped Year 2025 and Year 2024 (No. 2): 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. The matter was decided on 2026-02-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Sub-section (2) is meaningless on its own, so read the pair. Sub-section (1) is an exception to section 149. Where an assessment, reassessment or recomputation is in consequence of, or to give effect to, a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may go out at any time, and the ordinary outer dates in section 149 do not bind. Sub-section (2) then takes most of that back. Sub-section (1) does not apply at all where the year now sought to be assessed was, by reason of some other time limit, already beyond assessment at the moment the order under appeal, reference or revision was made. The test is not whether the year is barred today. It is whether it was barred on that earlier date. A year that was already dead when the order was passed cannot be brought back by an appellate remark about it, however emphatic. That is exactly what the Supreme Court decided in K.M. Sharma v Income Tax Officer, Ward 13(7), New Delhi, Civil Appeal No. 7742 of 1997, decided on 11 April 2002 by a Bench of three — Santosh Hegde and Dharmadhikari JJ sitting with the Chief Justice of India — and reported as AIR 2002 SC 1715 and (2002) 254 ITR 772. The Court held that the amendment to sub-section (1), which took effect on 1 April 1989, applies prospectively from that date, and that sub-section (1) as so amended “does not enable the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989”. Of sub-section (2) itself the Court said it “aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation”. The appeal was allowed with costs, the Delhi High Court's judgment of 24 May 1996 was set aside, and the notices under sections 148 and 142 for assessment years 1968-69 to 1971-72 and 1981-82 were quashed. Before you get to sub-section (2), though, there is a prior question, and it is the one that disposes of more notices: is there a finding or direction at all? The words come from the second proviso to section 34(3) of the Indian Income-tax Act, 1922, and a Constitution Bench construed them in Income-tax Officer, A-Ward, Sitapur v Murlidhar Bhagwan Das, decided on 29 January 1964 and reported at [1964] 52 ITR 335. Five judges sat — Sinha CJ, Subba Rao, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar JJ. The majority of three took up the definition the Allahabad High Court had given in Pt. Hazari Lal v Income-tax Officer, Kanpur — that the word “finding” “will only cover material questions which arise in a particular case for decision by the authority hearing the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing” — and said in terms, “We agree with this definition of ‘finding’.” They held that an assessment or reassessment pursuant to such an order “must necessarily relate to the assessment of the year under review, revision or appeal, as the case may be”. Raghubar Dayal and Mudholkar JJ dissented, Mudholkar J taking the view that “the finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding it is not necessary that it should be the final and ultimate conclusion”. The Court recorded that “in view of the judgment of the majority, the appeal fails and is dismissed with costs”. The majority is the law, and the Supreme Court restated it in Commissioner of Income-tax, Bihar v Banwari Lal Agarwal, decided on 18 January 1971: the expressions “finding” and “direction” mean “respectively, a finding necessary for giving relief in respect of the assessment for the year in question, and a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned in that proviso”. Put together, the two decisions give a reader two separate answers to the same notice. Murlidhar Bhagwan Das says the observation the officer is relying on is probably not a finding or a direction at all if it was not necessary to decide the year that was before the appellate authority. K.M. Sharma says that even if it is, sub-section (2) stops it reviving a year that was already barred when the order under appeal was made. The substitution changes three things and leaves that core alone. It was made by section 11 of the Finance Act, 2026, which was assented to on 30 March 2026 and directs that the new section “shall be deemed to have been substituted with effect from the 1st day of February, 2026” — so it reaches back over notices issued in February and March 2026. First, sub-section (1) is split into clauses and clause (b) is widened: the old text reached a court only “in any proceeding under any other law”, and the new one reads “a court in any proceeding under this Act or any other law”. Second, sub-section (2) acquires a second measuring date in clause (b) for a court proceeding that has not culminated in an order: the date those assessment, reassessment or recomputation proceedings were initiated. Third, and this one is new in kind, section 150(3) puts a deadline on the department for the first time. The section 148 notice must issue within three months from the end of the quarter in which the certified copy of the order is received by the jurisdictional Principal Commissioner or Commissioner. Until 31 January 2026 section 150 had no outer date of its own at all; a certified copy received on, say, 5 May 2026 now carries a notice deadline of 30 September 2026, being three months from the end of the quarter ending 30 June 2026. The date of receipt is a departmental record, and you are entitled to ask for it. Nothing in the substitution touches what K.M. Sharma decided. Sub-section (2) still says that sub-section (1) does not apply to a year that could not have been assessed at the relevant moment, and the new clause (b) adds a measuring point rather than removing one. One thing section 150 does not do: it governs the notice, not the order. Where an assessment, reassessment or recomputation is made to give effect to a finding or direction in an order under section 250, 254, 260, 262, 263 or 264, or in an order of a court in a proceeding otherwise than by way of appeal or reference, section 153(6)(i) gives the officer twelve months from the end of the month in which that order is received or passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to complete it. Two clocks, two different triggers, and both worth checking. The boundary. Section 150 belongs to the Income-tax Act, 1961, repealed on 1 April 2026 by section 536(1) of the Income-tax Act, 2025. Section 536(2) continues it for assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeal in respect of any tax year beginning before 1 April 2026, including proceedings initiated on or after that date, which is what the Department's transition FAQ says at Q1.18. So a section 148 notice issued in 2027 for assessment year 2024-25 is still governed by section 150. For tax year 2026-27 onwards the provision is section 283 of the Income-tax Act, 2025, which was substituted by the same amending Act with effect from 1 April 2026 and carries the same shape: sub-section (1) keyed to a notice under section 280 and extended to directions of the Approving Panel under section 274(6), sub-section (2) with three measuring moments rather than two — the third being the date a reference was made to the Approving Panel under section 274(4) — and the same three-month rule in sub-section (3).
Not applicable — this is a statement of the statutory text as printed on the departmental section pages, with the amendment history taken from the footnote apparatus on those pages. The two Supreme Court decisions named in the body were read in their own text. In the words reproduced by the source cited on this page: "The provisions of sub-section (1) shall not apply in any case where the assessment or reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment or reassessment or recomputation could not have been made, by reason of any other provision limiting the time within which any action for assessment or reassessment or recomputation may be taken, at the time when,— (a) the order which was the subject matter of the appeal, reference or revision, as the case may be, was made"
It was decided by the CBDT Circulars & Instructions on 2026-02-01 and is reported as Section 150(2) of the Income-tax Act, 1961, as amended up to 2026. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 150, section 150(2), section 150(1), section 150(3), section 149, section 148, section 153(6), section 250, section 254, section 263, section 264, section 283 (Act of 2025), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Sub-section (2) is meaningless on its own, so read the pair. Sub-section (1) is an exception to section 149. Where an assessment, reassessment or recomputation is in consequence of, or to give effect to, a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may go out at any time, and the ordinary outer dates in section 149 do not bind. Sub-section (2) then takes most of that back. Sub-section (1) does not apply at all where the year now sought to be assessed was, by reason of some other time limit, already beyond assessment at the moment the order under appeal, reference or revision was made. The test is not whether the year is barred today. It is whether it was barred on that earlier date. A year that was already dead when the order was passed cannot be brought back by an appellate remark about it, however emphatic. That is exactly what the Supreme Court decided in K.M. Sharma v Income Tax Officer, Ward 13(7), New Delhi, Civil Appeal No. 7742 of 1997, decided on 11 April 2002 by a Bench of three — Santosh Hegde and Dharmadhikari JJ sitting with the Chief Justice of India — and reported as AIR 2002 SC 1715 and (2002) 254 ITR 772. The Court held that the amendment to sub-section (1), which took effect on 1 April 1989, applies prospectively from that date, and that sub-section (1) as so amended “does not enable the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989”. Of sub-section (2) itself the Court said it “aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation”. The appeal was allowed with costs, the Delhi High Court's judgment of 24 May 1996 was set aside, and the notices under sections 148 and 142 for assessment years 1968-69 to 1971-72 and 1981-82 were quashed. Before you get to sub-section (2), though, there is a prior question, and it is the one that disposes of more notices: is there a finding or direction at all? The words come from the second proviso to section 34(3) of the Indian Income-tax Act, 1922, and a Constitution Bench construed them in Income-tax Officer, A-Ward, Sitapur v Murlidhar Bhagwan Das, decided on 29 January 1964 and reported at [1964] 52 ITR 335. Five judges sat — Sinha CJ, Subba Rao, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar JJ. The majority of three took up the definition the Allahabad High Court had given in Pt. Hazari Lal v Income-tax Officer, Kanpur — that the word “finding” “will only cover material questions which arise in a particular case for decision by the authority hearing the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing” — and said in terms, “We agree with this definition of ‘finding’.” They held that an assessment or reassessment pursuant to such an order “must necessarily relate to the assessment of the year under review, revision or appeal, as the case may be”. Raghubar Dayal and Mudholkar JJ dissented, Mudholkar J taking the view that “the finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding it is not necessary that it should be the final and ultimate conclusion”. The Court recorded that “in view of the judgment of the majority, the appeal fails and is dismissed with costs”. The majority is the law, and the Supreme Court restated it in Commissioner of Income-tax, Bihar v Banwari Lal Agarwal, decided on 18 January 1971: the expressions “finding” and “direction” mean “respectively, a finding necessary for giving relief in respect of the assessment for the year in question, and a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned in that proviso”. Put together, the two decisions give a reader two separate answers to the same notice. Murlidhar Bhagwan Das says the observation the officer is relying on is probably not a finding or a direction at all if it was not necessary to decide the year that was before the appellate authority. K.M. Sharma says that even if it is, sub-section (2) stops it reviving a year that was already barred when the order under appeal was made. The substitution changes three things and leaves that core alone. It was made by section 11 of the Finance Act, 2026, which was assented to on 30 March 2026 and directs that the new section “shall be deemed to have been substituted with effect from the 1st day of February, 2026” — so it reaches back over notices issued in February and March 2026. First, sub-section (1) is split into clauses and clause (b) is widened: the old text reached a court only “in any proceeding under any other law”, and the new one reads “a court in any proceeding under this Act or any other law”. Second, sub-section (2) acquires a second measuring date in clause (b) for a court proceeding that has not culminated in an order: the date those assessment, reassessment or recomputation proceedings were initiated. Third, and this one is new in kind, section 150(3) puts a deadline on the department for the first time. The section 148 notice must issue within three months from the end of the quarter in which the certified copy of the order is received by the jurisdictional Principal Commissioner or Commissioner. Until 31 January 2026 section 150 had no outer date of its own at all; a certified copy received on, say, 5 May 2026 now carries a notice deadline of 30 September 2026, being three months from the end of the quarter ending 30 June 2026. The date of receipt is a departmental record, and you are entitled to ask for it. Nothing in the substitution touches what K.M. Sharma decided. Sub-section (2) still says that sub-section (1) does not apply to a year that could not have been assessed at the relevant moment, and the new clause (b) adds a measuring point rather than removing one. One thing section 150 does not do: it governs the notice, not the order. Where an assessment, reassessment or recomputation is made to give effect to a finding or direction in an order under section 250, 254, 260, 262, 263 or 264, or in an order of a court in a proceeding otherwise than by way of appeal or reference, section 153(6)(i) gives the officer twelve months from the end of the month in which that order is received or passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to complete it. Two clocks, two different triggers, and both worth checking. The boundary. Section 150 belongs to the Income-tax Act, 1961, repealed on 1 April 2026 by section 536(1) of the Income-tax Act, 2025. Section 536(2) continues it for assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeal in respect of any tax year beginning before 1 April 2026, including proceedings initiated on or after that date, which is what the Department's transition FAQ says at Q1.18. So a section 148 notice issued in 2027 for assessment year 2024-25 is still governed by section 150. For tax year 2026-27 onwards the provision is section 283 of the Income-tax Act, 2025, which was substituted by the same amending Act with effect from 1 April 2026 and carries the same shape: sub-section (1) keyed to a notice under section 280 and extended to directions of the Approving Panel under section 274(6), sub-section (2) with three measuring moments rather than two — the third being the date a reference was made to the Approving Panel under section 274(4) — and the same three-month rule in sub-section (3). It arises in Reassessment & Reopening, Assessment & Scrutiny and How Tax Law Is Read matters, on section 150, section 150(2), section 150(1), section 150(3), section 149, section 148, section 153(6), section 250, section 254, section 263, section 264, section 283 (Act of 2025) of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask whether, on that date, a notice for the year now reopened could still have been issued under the limitation then in force. If it could not, section 150(2) disapplies section 150(1) and the notice fails. Read the passage the officer calls a finding or a direction, in full, and ask whether it was necessary to decide the year that was before the appellate authority. If it was not, it is not a finding within Murlidhar Bhagwan Das and section 150(1) never engaged. Check that the finding is about you. The provision reaches an assessment on a person against whom a finding or direction was given; it is not a licence to reopen anyone mentioned in an order. For any notice issued on or after 1 February 2026, work section 150(3). Ask in writing for the date on which the jurisdictional Principal Commissioner or Commissioner received the certified copy of the order, then count three months from the end of that quarter. Check which text applies to your notice. A notice issued up to 31 January 2026 falls under the old sub-sections (1) and (2), which had no sub-section (3) and reached a court only in a proceeding under some other law. Once the notice stands, turn to section 153(6)(i) and check the twelve months from the end of the month in which the order was received or passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. An order completed after that is out of time even if the notice was good. Do not concede that section 150 dispenses with sanction, service or the section 148A procedure. It lifts the time limit in section 149 and nothing else. If the year is a tax year beginning on or after 1 April 2026, read section 283 of the Income-tax Act, 2025, where the same structure applies to a notice under section 280 and sub-section (2) has a third measuring moment for a reference to the Approving Panel.
Superseded by amendment. Two separate movements, and you need both. Section 150 itself was substituted by section 11 of the Finance Act, 2026 (No. 4 of 2026), which was assented to on 30 March 2026 and deems the substitution to have been made with effect from 1 February 2026, so the text printed here is the current text and the earlier text, also set out above, governs a notice issued up to 31 January 2026. Separately, the Income-tax Act, 1961 was repealed on 1 April 2026 by section 536(1) of the Income-tax Act, 2025. Income earned in financial year 2025-26 stays under the 1961 Act and is assessed in assessment year 2026-27 — the last assessment year under the old Act, not 2025-26 — and section 536(2) continues the repealed Act for assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeal in respect of any tax year beginning before 1 April 2026, including proceedings initiated after that date, which the Department's transition FAQ repeats at Q1.18. So section 150 still governs a section 148 notice issued today for any of those years. For a tax year beginning on or after 1 April 2026 the provision is section 283 of the 2025 Act. Version relied on: the departmental page for section 150 stamped Year 2026, whose footnote records the substitution, read together with the enacted Finance Act, 2026, where section 11 sets out the substituted section in the same words. Twelve year-stamped versions were compared, back to 1966. The pre-substitution text was read on the Year 2025 and Year 2024 (No. 2) prints and is identical on both. Be warned that the unsuffixed departmental page for this section serves the Year 2000 text, which has no sub-section (3); do not cite it for a notice issued now. One thing is open. No decision on the substituted section, or on the retrospective date it carries, was found. K.M. Sharma and Murlidhar Bhagwan Das were decided on the earlier words, and are treated here as undisturbed because sub-section (2) survives the substitution intact and sub-section (1) still turns on a finding or direction. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Statutory text transcribed from the departmental page for section 150 stamped Year 2026, which carries the substituted three sub-sections and a footnote crediting “Act No. 4 of 2026” with effect from 1 February 2026. That Act is the Finance Act, 2026, assented to on 30 March 2026, and the substitution is made by its section 11; the enacted Act was read on the Department's own PDF, where section 11 sets out the new section in the same words. The pre-substitution text comes from the Year 2025 and Year 2024 (No. 2) prints, which are identical; twelve year-stamped versions were compared in all. The substitution is corroborated from a second direction: section 283 of the Income-tax Act, 2025 was substituted by the same Act with effect from 1 April 2026, and its Year 2026 print carries a sub-section (1) reaching a proceeding under that Act as well as any other law, the same extra measuring moment in sub-section (2) and the same three-month rule in sub-section (3), while its Year 2025 print shows the earlier words. The two are not identical in shape — section 283(1) is not split into authority and court limbs as section 150(1)(a) and (b) are, and it has an Approving Panel limb section 150 lacks — but they were redrawn together. Murlidhar Bhagwan Das was read in full: Supreme Court, 29 January 1964, five judges — Sinha CJ, Subba Rao, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar JJ — Dayal and Mudholkar JJ dissenting, the appeal dismissed with costs. The definition of “finding” quoted in the body is the Allahabad High Court's in Pt. Hazari Lal, which the Supreme Court set out and expressly agreed with; it is attributed that way because the words are not the Court's own. The report at [1964] 52 ITR 335 comes from citation strings printed inside five later judgments, and the holding is restated by the Supreme Court in Banwari Lal Agarwal on 18 January 1971, read separately; that sentence is the later Court's, not a headnote. K.M. Sharma was read on two differently published reproductions, which agree on the coram, on the sentences quoted and on the order — appeal allowed with costs, the Delhi High Court's judgment of 24 May 1996 set aside and the notices for assessment years 1968-69 to 1971-72 and 1981-82 quashed. Both print the presiding judge only as “CJI”, so this entry does not name him. The reports at AIR 2002 SC 1715 and (2002) 254 ITR 772, and the Delhi decision set aside at (1996) 221 ITR 202, come from citation strings printed alongside those judgments; no headnote was used. Section 153(6)(i) was read on the Year 2025 and Year 2026 prints, which agree, and the transition FAQ on the departmental PDF. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Sub-section (2) is meaningless on its own, so read the pair. Sub-section (1) is an exception to section 149. Where an assessment, reassessment or recomputation is in consequence of, or to give effect to, a finding or direction in an order passed on appeal, reference or revision, or by a court, the section 148 notice may go out at any time, and the ordinary outer dates in section 149 do not bind. Sub-section (2) then takes most of that back. Sub-section (1) does not apply at all where the year now sought to be assessed was, by reason of some other time limit, already beyond assessment at the moment the order under appeal, reference or revision was made. The test is not whether the year is barred today. It is whether it was barred on that earlier date. A year that was already dead when the order was passed cannot be brought back by an appellate remark about it, however emphatic. That is exactly what the Supreme Court decided in K.M. Sharma v Income Tax Officer, Ward 13(7), New Delhi, Civil Appeal No. 7742 of 1997, decided on 11 April 2002 by a Bench of three — Santosh Hegde and Dharmadhikari JJ sitting with the Chief Justice of India — and reported as AIR 2002 SC 1715 and (2002) 254 ITR 772. The Court held that the amendment to sub-section (1), which took effect on 1 April 1989, applies prospectively from that date, and that sub-section (1) as so amended “does not enable the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989”. Of sub-section (2) itself the Court said it “aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation”. The appeal was allowed with costs, the Delhi High Court's judgment of 24 May 1996 was set aside, and the notices under sections 148 and 142 for assessment years 1968-69 to 1971-72 and 1981-82 were quashed. Before you get to sub-section (2), though, there is a prior question, and it is the one that disposes of more notices: is there a finding or direction at all? The words come from the second proviso to section 34(3) of the Indian Income-tax Act, 1922, and a Constitution Bench construed them in Income-tax Officer, A-Ward, Sitapur v Murlidhar Bhagwan Das, decided on 29 January 1964 and reported at [1964] 52 ITR 335. Five judges sat — Sinha CJ, Subba Rao, Raghubar Dayal, Rajagopala Ayyangar and Mudholkar JJ. The majority of three took up the definition the Allahabad High Court had given in Pt. Hazari Lal v Income-tax Officer, Kanpur — that the word “finding” “will only cover material questions which arise in a particular case for decision by the authority hearing the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing” — and said in terms, “We agree with this definition of ‘finding’.” They held that an assessment or reassessment pursuant to such an order “must necessarily relate to the assessment of the year under review, revision or appeal, as the case may be”. Raghubar Dayal and Mudholkar JJ dissented, Mudholkar J taking the view that “the finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding it is not necessary that it should be the final and ultimate conclusion”. The Court recorded that “in view of the judgment of the majority, the appeal fails and is dismissed with costs”. The majority is the law, and the Supreme Court restated it in Commissioner of Income-tax, Bihar v Banwari Lal Agarwal, decided on 18 January 1971: the expressions “finding” and “direction” mean “respectively, a finding necessary for giving relief in respect of the assessment for the year in question, and a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned in that proviso”. Put together, the two decisions give a reader two separate answers to the same notice. Murlidhar Bhagwan Das says the observation the officer is relying on is probably not a finding or a direction at all if it was not necessary to decide the year that was before the appellate authority. K.M. Sharma says that even if it is, sub-section (2) stops it reviving a year that was already barred when the order under appeal was made. The substitution changes three things and leaves that core alone. It was made by section 11 of the Finance Act, 2026, which was assented to on 30 March 2026 and directs that the new section “shall be deemed to have been substituted with effect from the 1st day of February, 2026” — so it reaches back over notices issued in February and March 2026. First, sub-section (1) is split into clauses and clause (b) is widened: the old text reached a court only “in any proceeding under any other law”, and the new one reads “a court in any proceeding under this Act or any other law”. Second, sub-section (2) acquires a second measuring date in clause (b) for a court proceeding that has not culminated in an order: the date those assessment, reassessment or recomputation proceedings were initiated. Third, and this one is new in kind, section 150(3) puts a deadline on the department for the first time. The section 148 notice must issue within three months from the end of the quarter in which the certified copy of the order is received by the jurisdictional Principal Commissioner or Commissioner. Until 31 January 2026 section 150 had no outer date of its own at all; a certified copy received on, say, 5 May 2026 now carries a notice deadline of 30 September 2026, being three months from the end of the quarter ending 30 June 2026. The date of receipt is a departmental record, and you are entitled to ask for it. Nothing in the substitution touches what K.M. Sharma decided. Sub-section (2) still says that sub-section (1) does not apply to a year that could not have been assessed at the relevant moment, and the new clause (b) adds a measuring point rather than removing one. One thing section 150 does not do: it governs the notice, not the order. Where an assessment, reassessment or recomputation is made to give effect to a finding or direction in an order under section 250, 254, 260, 262, 263 or 264, or in an order of a court in a proceeding otherwise than by way of appeal or reference, section 153(6)(i) gives the officer twelve months from the end of the month in which that order is received or passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to complete it. Two clocks, two different triggers, and both worth checking. The boundary. Section 150 belongs to the Income-tax Act, 1961, repealed on 1 April 2026 by section 536(1) of the Income-tax Act, 2025. Section 536(2) continues it for assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeal in respect of any tax year beginning before 1 April 2026, including proceedings initiated on or after that date, which is what the Department's transition FAQ says at Q1.18. So a section 148 notice issued in 2027 for assessment year 2024-25 is still governed by section 150. For tax year 2026-27 onwards the provision is section 283 of the Income-tax Act, 2025, which was substituted by the same amending Act with effect from 1 April 2026 and carries the same shape: sub-section (1) keyed to a notice under section 280 and extended to directions of the Approving Panel under section 274(6), sub-section (2) with three measuring moments rather than two — the third being the date a reference was made to the Approving Panel under section 274(4) — and the same three-month rule in sub-section (3).
TaxSphere, “Statutory position — s.150(2): a finding or direction cannot revive a year that was already time-barred when the order under appeal was passed, and from 1 February 2026 the notice itself has a deadline”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-150-2-a-finding-or-direction-cannot-revive-a-year-already-barred-when-the-order-under-appeal-was-passed/ (validity last checked 2026-09-23)
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The officer says a court's order in my land acquisition case lets him reopen years going back to the sixties, because s.150(1) says the notice may be issued at any time. Can he?
The Commissioner (Appeals) allowed my appeal for one year and said in passing that the amount really belongs to an earlier year. The officer has now reopened that earlier year and calls the remark a finding. Is it one?
I am arguing that a section 56(2)(vii)(b) addition on land my client bought below circle rate produces double taxation. How is the department going to answer that?
They issued a 148 notice in my late husband's name. Can they just issue a fresh one now?
