Section 280 Income Tax Notice (Income Escaping Assessment) New Income Tax Act 2025
Under the Income-tax Act, 2025, a Section 280 Notice is the formal legal notice issued by an Assessing Officer (AO) to initiate proceedings for assessing or reassessing income that has escaped assessment for a specific tax year. This notice is the actual demand for a return of income, which typically follows the initial show-cause procedure under Section 281.
Here is the complete analysis of the rules governing a Section 280 Notice:
1. What the Notice Demands
- Filing a New Return: The primary purpose of the notice is to compel the assessee to furnish a return of their income (or the income of any other person they are assessable for) for the relevant tax year.
- Time Limit for Filing: The AO will specify a deadline in the notice, which cannot exceed three months from the end of the month in which the notice is issued.
- Treatment of the Return: If the return is furnished within the specified time, it will be treated just like a regular tax return filed under Section 263. However, if filed after the expiry of the allowed time, it loses this legal status.
2. Mandatory Prerequisites for Issuance
The AO cannot issue this notice arbitrarily. Strict conditions must be met:
- Accompanied by Section 281 Order: The Section 280 notice must be served along with a copy of the order passed under Section 281(3), which formally concludes that the case is fit for reassessment.
- Possession of “Information”: The AO must possess specific information suggesting that income has escaped assessment. The Act strictly defines this “information” as data flagged by the Board’s risk management strategy, audit objections, findings from a survey, directions from an Approving Panel, or findings/orders from a Tribunal or Court.
- Prior Approval: In certain scenarios (such as information received from the faceless collection scheme or a Tribunal order), the AO must obtain prior approval from a “specified authority”. This authority is defined as the Additional Commissioner/Director or the Joint Commissioner/Director.
3. Strict Time Limits for Issuing the Notice (Section 282) The law places strict statutes of limitation on when a Section 280 notice can be issued:
- Cooling-off Period: The notice cannot be issued within one year from the end of the relevant tax year.
- Standard Limit: In standard cases, the notice must be issued before four years and three months have elapsed from the end of the relevant tax year.
- Extended Limit for High-Value Cases: The AO can issue the notice beyond the standard limit—up to six years and three months from the end of the tax year—only if they have in their possession evidence (books of account, documents, etc.) showing that the escaped income amounts to (or is likely to amount to) ₹ 50,00,000 (Fifty lakh rupees) or more.
Related Post
Section 263 Income Tax Act 2025 Return of income.
Section 280 Income Tax Act 2025 Issue of notice where income has escaped assessment.
Section 281 Income Tax Act 2025 Procedure before issuance of notice under section 280.
Section 282 Income Tax Act 2025 Time limit for notices under sections 280 and 281.