48

[Income escaping assessment49.

147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any
assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or
reassess such income or recompute the loss or the depreciation allowance or any other allowance or
deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as
the relevant assessment year).
Explanation.—For the purposes of assessment or reassessment or recomputation under this section, the
Assessing Officer may assess or reassess the income in respect of any issue, which has escaped
assessment, and such issue comes to his notice subsequently in the course of the proceedings under this
section, irrespective of the fact that the provisions of section 148A have not been complied with.]

48. Substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section
147, as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988/1-4-
1989, Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989, Finance Act, 2008, w.e.f.
1-4-2008, Finance (No. 2) Act, 2009, w.r.e.f. 1-4-1989, Finance Act, 2012, w.e.f. 1-7-2012
and Finance Act, 2016, w.e.f. 1-6-2016, read as under :
"*147. Income escaping assessment.—If the Assessing Officer has reason to believe** that any
income chargeable to tax has escaped assessment** for any assessment year, he may**, subject to
the provisions of sections 148 to 153, assess or reassess** such** income **and also any other
income chargeable to tax which has escaped assessment and which comes to his notice
subsequently in the course of the proceedings** under this section, or recompute the loss or the
depreciation allowance or any other allowance, as the case may be, for the assessment year
concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment
year) :
where no return of income has been furnished by the assessee although his total
P income or the total income of any other person in respect of which he is assessable
r under this Act during the previous year exceeded the maximum amount which is not
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(b) where a return of income has been furnished by the assessee but no assessment has
been made and it is noticed by the Assessing Officer that the assessee has
understated the income or has claimed excessive loss, deduction, allowance or relief
in the return ;
(ba) where the assessee has failed to furnish a report in respect of any international
transaction which he was so required under section 92E;
(c) where an assessment has been made, but—
(i) income chargeable to tax has been underassessed ; or
(ii) such income has been assessed at too low a rate†† ; or
(iii) such income has been made the subject of excessive relief under this Act ; or
(iv) excessive loss or depreciation allowance or any other allowance under this Act has
been computed;
(ca) where a return of income has not been furnished by the assessee or a return of
income has been furnished by him and on the basis of information or document
received from the prescribed income-tax authority, under sub-section (2) of section
133C, it is noticed by the Assessing Officer that the income of the assessee exceeds
the maximum amount not chargeable to tax, or as the case may be, the assessee has
understated the income or has claimed excessive loss, deduction, allowance or relief
in the return;
(d) where a person is found to have any asset (including financial interest in any entity)
located outside India.
 Explanation 3.—For the purpose of assessment or reassessment†† under this section, the Assessing
Officer may assess or reassess the income in respect of any issue, which has escaped assessment,
and such issue comes to his notice subsequently in the course of the proceedings under this section,
notwithstanding that the reasons for such issue have not been included in the reasons recorded
under sub-section (2) of section 148.
Explanation 4.—For the removal of doubts, it is hereby clarified that the provisions of this section,
as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on
or before the 1st day of April, 2012."
*See also Circular [F. No. 45A/180/52-IT], dated 6-12-1955 (Piecemeal assessments to be
avoided), Circular No. 40/2016, dated 9-12-2016 (Demonetization and reassessment) and
Instruction F. No. 225/40/2021/ITA-II, dated 4-3-2021 (Selection of cases for issue of notice u/s
148). For details, see Taxmann's Master Guide to Income-tax Act.
For relevant case laws, see Taxmann's Master Guide to Income-tax Act.
**For the meaning of the terms/expressions "reason to believe", "escaped assessment", "assess or
reassess", "such", "in the course of the proceedings", "may", "and also ... chargeable to tax", see
Taxmann's Direct Taxes Manual, Vol. 3.
†For the meaning of the expressions "after expiry of four years from end of relevant assessment
year", "failure" and "material facts", see Taxmann's Direct Taxes Manual, Vol. 3.
††For the meaning of the expressions "production", "not necessarily", "rate" and "assessment or
reassessment", see Taxmann's Direct Taxes Manual, Vol. 3.
49. See Instruction No. 1/2022, dated 11-5-2022 [Implementation of Supreme Court's
judgment in Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64/286 Taxman
183]. For details, see Taxmann's Master Guide to Income-tax Act.