Income escaping assessment
Section 147 of the Income-tax Act, 1961 deals with income escaping assessment. 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 deduc The Act came into force on 01 Apr 1962. Repealed by the Income-tax Act, 2025 with effect from 1 April 2026, but conduct before that date is still charged, tried and appealed under it.
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.
[Assessing Officer for purposes of sections 148 and 148A. 147A.Notwithstanding anything contained in any judgment, order or decree of any court or in section 151A or in any scheme framed thereunder, for the removal of doubts, it is hereby clarified that the Assessing Officer for the purposes of sections 148 and 148A shall mean and shall always be deemed to have meant to be an Assessing Officer other than the National Faceless Assessment Centre or any assessment unit referred to in sub-section (3) of section 144B.]
Section 147, The Income-tax Act, 1961 (Act 43 of 1961).
Now in the Income-tax Act
INCOME-TAX-ACT-2025 279 Income escaping assessment Official correspondence
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 42
- Finance Act s. 33 Amendment of section 147
- Finance Act s. 58 Amendment of section 147
- Finance Act s. 64 Amendment of section 147
- Finance Act s. 69 Amendment of section 147
- Finance Act s. 40 Substitution of new section for section 147
- Finance Act s. 9 Insertion of new section 147A
- Finance Act s. 47 Amendment of section 147
- Finance Act s. 132 Declaration by declarant
- s. 9 Income deemed to accrue or arise in India
- s. 14A Expenditure incurred in relation to income not includible in total income
- s. 92C Computation of arm's length price
- s. 92CA Reference to Transfer Pricing Officer
and 30 more
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
-
Commnr. of Income Tax, Delhi vs Kelvinator of India LTD
Court's Decision & Legal Precedent
After 1st April 1989, the Assessing Officer has the power to reopen an assessment under Section 147 of the Income Tax Act, 1961, provided there is 'tangible material' to come to the conclusion that income has escaped assessment. The concept of 'change of opinion' cannot be the basis for reopening; instead, the reasons for reopening must have a live link with the formation of the belief that income has escaped assessment. The expression 'reason to believe' must be given a schematic interpretation to prevent arbitrary exercise of power and to maintain the distinction between the power to review (which the Assessing Officer does not possess) and the power to reassess (which he does possess).
On this section: The Court analyzed the evolution of Section 147 through three phases: pre-1987, post-1987 (pre-1989), and post-1989. The Court held that post-1989, the Assessing Officer requires 'reason to believe' based on tangible material, not mere change of opinion, to reopen assessments.
-
Mepco Industries Ltd. Madurai vs Commr. of Income Tax
Court's Decision & Legal Precedent
A 'rectifiable mistake' under Section 154 of the Income Tax Act must be a patent and apparent mistake obvious from the record of the order itself, and whose discovery is not dependent on elaborate arguments, complex legal interpretation, or subsequent judicial pronouncements. A rectifiable mistake cannot be based on change of opinion regarding a debatable point of law. When the same legal question yields different answers based on different factual matrices (as with classification of different types of government subsidies), applying a new court's decision in one case to rectify an order in a factually distinct case constitutes change of opinion, not rectification of apparent mistake. The Department cannot use Section 154 to rectify orders based on subsequent Supreme Court judgments in unrelated cases; such retroactive application requires invocation of Section 147 (reassessment) with its associated procedural safeguards and time limits.
On this section: Reassessment powers - Distinguished from Section 154; allows reassessment if income has escaped assessment, but subject to time limits. Court noted Department did not invoke this provision despite being within time limit.
-
Union Of India vs Rajeev Bansal
Court's Decision & Legal Precedent
The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 (TOLA), enacted to extend time limits for completing actions during the COVID-19 pandemic, continues to apply to reassessment proceedings under the Income Tax Act after 1 April 2021 when the Finance Act 2021 substituted the reassessment provisions. TOLA extends the time limit for issuing reassessment notices under Section 148 and for obtaining sanction under Section 151 until 30 June 2021 for all actions falling for completion between 20 March 2020 and 31 March 2021. Reassessment notices issued under the old regime between 1 April 2021 and 30 June 2021 are deemed to be show-cause notices under Section 148A(b) of the new regime, and reassessment notices under the new regime issued in pursuance thereof must be issued within the time surviving under the Income Tax Act read with TOLA, failing which they are time-barred. The surviving time is calculated by excluding (a) the period during which show-cause notices were deemed stayed due to non-supply of material and (b) the period allowed to assessee to respond to show-cause notice.
On this section: Empowers assessing officer to reopen assessment based on reason to believe income escaped - core provision for reassessment jurisdiction
-
Union Of India vs Rajeev Bansal
Court's Decision & Legal Precedent
After 1 April 2021, when Finance Act 2021 substitutes Sections 147-151 of Income Tax Act, the new regime applies to reassessment proceedings for past assessment years. However, the TOLA extended time limits (till 30 June 2021) continue to apply to reassessment notices that fall for completion between 20 March 2020 and 31 March 2021. The reassessment notices issued under the old regime between 1 April 2021 and 30 June 2021 are deemed to have been issued as show-cause notices under the new regime with effect from their original date of issuance. The surviving time limit for issuing reassessment notices under the new regime in pursuance of such deemed notices is the balance of days between the original issuance date and 30 June 2021 (the TOLA extended deadline). All reassessment notices issued under the new regime beyond the surviving time limit calculated under the Income Tax Act read with TOLA are time-barred and liable to be set aside.
On this section: Power of assessing officer to reassess income that has escaped assessment; old regime provided reason to believe standard; new regime provides prior information and approval standard
-
Union Of India vs Rajeev Bansal
Court's Decision & Legal Precedent
TOLA continues to apply to the Income Tax Act after Finance Act 2021 came into effect on 1 April 2021, extending the time limit for issuance of reassessment notices till 30 June 2021. The first proviso to Section 149(1)(b) of the new regime does not bar application of TOLA. Reassessment notices issued after 30 June 2021 are time-barred. The directions in Ashish Agarwal judgment deeming Section 148 notices under old regime as show-cause notices under Section 148A of new regime apply to all 90,000 notices issued between 1 April 2021 and 30 June 2021, creating a legal fiction that stops the clock of limitation. The surviving time for issuance of notices under Section 148 of the new regime is the balance time between the date of issuance of the deemed notice and 30 June 2021, after excluding periods when proceedings were stayed and time allowed to assesses to respond.
On this section: Core reassessment procedure provisions; interpreted to understand jurisdiction of assessing officer, time limits, and sanctioning authority requirements
-
Principal Commissioner of Income Tax vs Gahoi Foods Pvt. LTD
Court's Decision & Legal Precedent
In a case where a search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961 has been conducted, the Assessing Officer assumes jurisdiction to assess or reassess the total income under Section 153A only for: (a) all pending assessments/reassessments which shall stand abated and be assessed afresh as a unified assessment for the six preceding assessment years; and (b) completed/unabated assessments, only if and to the extent incriminating material relating to those assessment years is found or unearthed during the search or requisition. In the absence of incriminating material being found during search in respect of any completed/unabated assessment within the six-year block period, the Assessing Officer cannot assess or reassess the total income taking into consideration other material available on record, but the completed assessments remain binding, subject to the Revenue's preserved right to initiate reassessment proceedings under Sections 147/148 of the Act, subject to fulfilment of the statutory conditions specified therein.
On this section: Reassessment when income has escaped assessment
-
Pr. Commissioner of Income Tax vs Gahoi Food Pvt. LTD
Court's Decision & Legal Precedent
In case of search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961, the Assessing Officer assumes jurisdiction for block assessment under Section 153A for six assessment years. While all pending assessments/reassessments for those years stand abated and can be reassessed for total income including all available material, in respect of completed/unabated assessments, the Assessing Officer can make an addition or reassessment only if incriminating material related to that issue has been found and unearthed during the search. In the absence of any incriminating material being unearthed during the search, the Assessing Officer cannot assess or reassess taking into consideration other material in respect of completed/unabated assessments. However, the completed/unabated assessments can be reopened by the Assessing Officer in exercise of powers under Sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged under those sections.
On this section: Reassessment when income has escaped assessment; saved remedy available when Section 153A cannot be applied
-
Dayawanti through Smt. Sunita Gupta (legal Heir) vs Commissioner of Income Tax
Court's Decision & Legal Precedent
In case of search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961: (i) All pending assessments/reassessments shall abate and merge into assessment under Section 153A, permitting Assessing Officer to assess 'total income' for the entire six assessment years; (ii) In respect of abated/pending assessments, the AO can assess total income incorporating both disclosed income and undisclosed income found during search or available from other sources; (iii) However, in respect of completed/unabated assessments where no assessment was pending at the date of search initiation, the AO can only assess or reassess by reopening such assessment when incriminating material is found relating to that specific assessment year; (iv) Where no incriminating material whatsoever is found during the search for a particular assessment year, the AO cannot assess or reassess a completed assessment for that year under Section 153A, and the completed assessment remains final and protected; (v) In such cases, the Revenue's only remedy is to resort to reassessment under Sections 147/148, subject to fulfillment of the conditions stated therein, and these powers are expressly saved; (vi) The assessment under Section 153A is fundamentally linked to the search or requisition under Sections 132/132A, and its object is to bring to tax undisclosed income detected through such search - foundation for Section 153A assessment is the existence of incriminating material.
On this section: Reassessment when income has escaped assessment - permits AO to reopen assessment where satisfactory reason exists that income chargeable to tax has escaped assessment
-
Pr Commissioner of Income Tax (c) 1 vs Rehab Housing PVT LTD
Court's Decision & Legal Precedent
In case of search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961, the Assessing Officer assumes jurisdiction for block assessment under Section 153A. All pending assessments/reassessments shall stand abated. In case any incriminating material is found/unearthed during the search, even in case of unabated/completed assessments, the Assessing Officer would assume jurisdiction to assess or reassess the total income taking into consideration the incriminating material unearthed during the search and other material available with the Assessing Officer including income declared in returns. However, in case no incriminating material is unearthed during the search, the Assessing Officer cannot assess or reassess taking into consideration other material in respect of completed assessments/unabated assessments. Therefore, in respect of completed/unabated assessments, no addition can be made by the Assessing Officer in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. The completed/unabated assessments can be re-opened by the Assessing Officer in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under Sections 147/148.
On this section: Reassessment in case of income having escaped assessment - cited as independent remedy available to Revenue for completed assessments even where no incriminating material found during search
-
Pr Commissioner of Income Tax (c) 1 vs Rehab Housing PVT LTD through Its Md
Court's Decision & Legal Precedent
In Case Of Search Under Section 132 Or Requisition Under Section 132A, The Assessing Officer Assumes Jurisdiction For Block Assessment Under Section 153A For Six Assessment Years. While All Pending Assessments/Reassessments Shall Stand Abated, In Case Of Completed/Unabated Assessments, The Assessing Officer Can Only Assess Or Reassess The Total Income Taking Into Consideration Incriminating Material Unearthed During The Search And Other Material Available. In Case No Incriminating Material Is Unearthed During The Search, The Assessing Officer Cannot Assess Or Reassess Taking Into Consideration Other Material In Respect Of Completed/Unabated Assessments. The Assessment Under Section 153A Is Inextricably Linked With The Search And Requisition Under Sections 132 And 132A, And The Object Is To Bring Under Tax The Undisclosed Income Which Is Found During The Course Of Search Or Pursuant To Search Or Requisition. Only In Cases Where Undisclosed Income Is Found Based On Incriminating Material, The Assessing Officer Assumes Jurisdiction To Assess Or Reassess Total Income For The Entire Six-Year Block Assessment Period Even In Case Of Completed/Unabated Assessments.
On this section: Regular Reassessment Provision; Court Holds This As Available Remedy For Completed Assessments When Section 153A Cannot Be Applied Due To Absence Of Incriminating Material
-
Maxopp Investment Ltd. . Director vs Commr. of I. T New Delhi
Court's Decision & Legal Precedent
The dominant purpose or intention behind investment in shares is not relevant in determining applicability of Section 14A. Where dividend income is earned on shares, whether held as investment for acquiring controlling interest or as stock-in-trade, the principle of apportionment of expenditure between taxable and non-taxable income applies under Section 14A. Expenditure incurred in relation to earning tax-exempt dividend income must be disallowed proportionately. However, where shares are held as stock-in-trade and dividend is earned incidentally, the apportionment must be done based on actual facts and circumstances. The Assessing Officer must record satisfaction before applying apportionment under Section 14A(2) read with Rule 8D, and must examine the nature of loan taken for purchasing shares. Rule 8D is prospective in nature and applies only to assessment years from 2007-08 onwards.
On this section: Reassessment provision; cited in proviso to Section 14A regarding limitations on reassessment
-
Union Of India vs Rajeev Bansal
Court's Decision & Legal Precedent
1. TOLA 2020 continues to apply to reassessment procedures under Income Tax Act even after Finance Act 2021 substituted the regime on 1 April 2021, provided the action falls for completion between 20 March 2020 and 31 March 2021. 2. The non obstante clause in Section 3(1) of TOLA overrides Section 149 of Income Tax Act only to the extent of relaxing the time limit for issuance of reassessment notices; it does not extend the time limit of three years (or six years for pre-April 2021 assessments) prescribed by the Income Tax Act itself. 3. Section 151 relating to grant of sanction by specified authority is subject to TOLA to the extent that the time limit of three years falls between 20 March 2020-31 March 2021, thereby extending to 30 June 2021 the time for grant of sanction. 4. The legal fiction created in Ashish Agarwal by deeming Section 148 notices under old regime as Section 148A(b) show cause notices under new regime operates with effect from the date of original issuance of the notices, and the surviving time limit for issuance of reassessment notices under new regime must be calculated after accounting for exclusions specified in the third proviso to Section 149. 5. Reassessment notices issued under Section 148 of the new regime in pursuance of the deemed show cause notices must be issued within the surviving time limit under Income Tax Act read with TOLA; all notices issued beyond this surviving period are time-barred and liable to be set aside. 6. The directions in Ashish Agarwal judgment extend PAN INDIA to all ninety thousand reassessment notices issued under the old regime between 1 April 2021 and 30 June 2021, including those not individually challenged before courts.
On this section: Power to reassess - allows assessing officer to reopen assessment if reason to believe income chargeable to tax has escaped assessment; quasi-judicial function
-
Brij Lal vs Commnr. of Income Tax, Jalandhar
Court's Decision & Legal Precedent
Sections 234A, 234B and 234C of the Income Tax Act, 1961 are applicable to proceedings of the Settlement Commission under Chapter XIX-A to the extent indicated in the judgment, specifically that these interest provisions are applicable up to the date of the order under section 245D(1) allowing the settlement application and not beyond to the date of the final settlement order under section 245D(4). The Settlement Commission cannot reopen its concluded proceedings by invoking section 154 of the Act to levy interest under section 234B, as section 154 is inapplicable to Chapter XIX-A proceedings which have their own finality regime under section 245I.
On this section: Reassessment provisions for escaped income, contrasted with settlement commission jurisdiction
-
Brij Lal vs Commnr. of Income Tax, Jalandhar
Court's Decision & Legal Precedent
Sections 234A, 234B and 234C of the Income Tax Act, 1961 are applicable to proceedings of the Settlement Commission under Chapter XIX-A to the extent that they govern the computation of interest on undisclosed income disclosed in settlement applications. However, the terminal point for levy of interest under section 234B is the date of the order under section 245D(1) (admission of settlement application) and not the date of the order under section 245D(4) (final settlement order). The Settlement Commission cannot reopen its concluded proceedings by invoking section 154 of the Act to levy interest under section 234B that was not levied in the original proceedings, as section 154 is not applicable to Chapter XIX-A proceedings and section 245I makes settlement orders final and conclusive.
On this section: Cited to establish reassessment procedure and its interaction with settlement proceedings
-
K C Builders vs The Asstt Commnr of Income Tax
Court's Decision & Legal Precedent
When the Income Tax Appellate Tribunal, which is the final court on facts, finds that there is no concealment of income and cancels penalties levied under Section 271(1)(c) of the Income Tax Act, the criminal prosecution under Section 276C of the Act must be automatically quashed. The finding of the Appellate Tribunal is conclusive and binding on the criminal court. Since the basis for criminal prosecution (concealment of income) has been negated by the Tribunal's final order, no offence survives under the Income Tax Act, and the criminal proceedings cannot be sustained. The Assessing Officer has no alternative except to cancel the penalty following the Tribunal's order, and the criminal court cannot proceed with prosecution after such cancellation.
On this section: Deals with income escaping assessment; cited to establish framework for reassessment proceedings initiated against appellants
-
Anila Rasiklal Mehta vs The Union of India
Court's Decision & Legal Precedent
While the Black Money Act provisions may be applied to undisclosed foreign assets that come to the notice of the assessing officer, and respondents may proceed pursuant to notices issued under the Act, no coercive measures may be taken against assessees who were statutorily barred from making voluntary declarations under Section 59 due to Section 71(d)(iii) and who raise arguable constitutional questions regarding discrimination and retrospective application, pending final determination of the constitutional validity of such provisions.
On this section: Escaped assessment; basis for reopening assessment
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 147
What have the courts held on Section 147 of the Income-tax Act?
Commnr. of Income Tax, Delhi vs Kelvinator of India LTD (18 Jan 2010) is the leading judgment on this section among those set out below: The Court analyzed the evolution of Section 147 through three phases: pre-1987, post-1987 (pre-1989), and post-1989. The Court held that post-1989, the Assessing Officer requires 'reason to believe' based on tangible material, not mere change of opinion, to reopen assessments. Another 15 judgments on this section are set out below, 15 of them from the Supreme Court. They run from 2004 to 2024.
How do I find court cases under Section 147 of the Income-tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Income Tax Act 147, section 147 Income Tax Act, section 147 of the Income-tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 16 reported judgments on this section are set out on this page, beginning with Commnr. of Income Tax, Delhi vs Kelvinator of India LTD (18 Jan 2010).
What should I read with Section 147 of the Income-tax Act, and has it changed?
Its own text turns on section 144B (Faceless Assessment), section 148 (Issue of notice where income has escaped assessment), section 148A (Procedure before issuance of notice under section 148), section 151A (Faceless assessment of income escaping assessment), and on 1 further provision, so none of them can safely be read on its own. 42 other provisions in this corpus refer back to it. For anything done on or after 1 April 2026 the provision to read is Income-tax Act, 2025, section 279 (Income escaping assessment), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 147 of the Income-tax Act come into force?
Section 147 of the Income-tax Act, cited as Income Tax Act 147, came into force on 01 Apr 1962, having been enacted on 13 Sep 1961. It is no longer in force.
Other sections of this Act
- 10. Incomes not included in total income30885 words
- 2. Definitions11419 words
- 80HHF. Deduction in respect of profits and gains from export or transfer of film software, etc7148 words
- 80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings5474 words
- 155. Other amendments5451 words
- 139. Return of income5400 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by the Income Tax Department, as amended by the Finance Act, 2026. India Code holds no record of this Act in any form. This page is not a substitute for legal advice.