Section 115WG is the FBT reassessment charge — the counterpart of s.147. Where the Assessing Officer has 'reason to believe' that fringe benefits chargeable to tax have escaped assessment, he may, subject to ss.115WH, 150 and 153, assess or reassess them and any other escaped fringe benefits coming to notice. The Explanation deems three situations to be escapement (no return; return filed but no assessment and understatement noticed; assessment made but under-assessment). The settled s.147/148 safeguards apply through s.115WL.
Historical context / FA amendment trail
Inserted by the Finance Act, 2005 w.e.f. AY 2006-07. Inapplicable from AY 2010-11 (s.115WM); reassessment of the operative years (2006-07 to 2009-10) survives the sunset.
Operative consequences
• 'Reason to believe' founded on tangible material is the jurisdictional foundation; a mere change of opinion is impermissible (Kelvinator).
• Reassessment must be preceded by a valid s.115WH notice with recorded reasons.
• Deemed-escapement clauses mirror the Explanation to s.147.
• GKN Driveshafts procedure (furnish reasons; dispose of objections) applies.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Block 1 reproduces the statutory text verbatim from the Income-tax Act, 1961 (text as printed; the Chapter remains on the statute book but is inapplicable from AY 2010-11 by s.115WM). The Finance Act, 2026 makes no substantive change to Chapter XII-H. Not legal advice.
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Chapter: XII-H — Income-tax on Fringe Benefits (Fringe Benefit Tax). Inserted by the Finance Act, 2005 with effect from assessment year 2006-07.
Operative life: FBT was levied for assessment years 2006-07 to 2009-10. By section 115WM (inserted by the Finance (No. 2) Act, 2009), the Chapter does not apply from assessment year 2010-11 onwards. The sections were NOT omitted — they remain on the statute book but are switched off prospectively.
Finance Act, 2026: Makes no substantive amendment to Chapter XII-H. (The Finance Act, 2026 carries only consequential cross-references to sections 115WD/115WH in a penalty provision; the FBT charge, scope and machinery are untouched.)
Part: C — Procedure for filing of return, assessment and payment.
Parallel: FBT analogue of section 147 (income escaping assessment).
A. SECTION COMMENTARY
Section 115WG is the FBT reassessment charge. Where the Assessing Officer 'has reason to believe' that fringe benefits chargeable to tax have escaped assessment for any assessment year, he may — subject to sections 115WH, 150 and 153 — assess or reassess such fringe benefits and any other escaped fringe benefits coming to notice during the proceedings. The Explanation deems three situations to be 'escapement': no return filed; return filed but no assessment made and understatement noticed; or assessment made but fringe benefits under-assessed (the FBT counterpart of the deemed-escapement Explanation to section 147).
'Reason to believe' is the jurisdictional foundation, identical in character to section 147. The reassessment must be preceded by a valid notice under section 115WH (which requires recorded reasons) and is bounded by the limitation in section 115WH(3)-(4). The settled section 147/148 safeguards — a live nexus between the material and the belief, no reassessment on a mere change of opinion, and the GKN Driveshafts procedure of furnishing reasons and disposing of objections — apply to FBT through section 115WL.
No FBT-specific reported merits decision construes section 115WG; the section 147 jurisprudence governs.
B. STATUTORY POSITION (verbatim text)
Section 115WG, Income-tax Act, 1961:
115WG. If the Assessing Officer has reason to believe that any fringe benefits chargeable to tax have escaped assessment for any assessment year, he may, subject to the provisions of sections 115WH, 150 and 153, assess or reassess such fringe benefits and also any other fringe benefits chargeable to tax which have escaped assessment and which come to his notice subsequently in the course of the proceedings under this section, for the assessment year concerned (hereafter referred to as the relevant assessment year).
Explanation.—For the purposes of this section, the following shall also be deemed to be cases where fringe benefits chargeable to tax have escaped assessment, namely:— (a) where no return of fringe benefits has been furnished by the assessee; (b) where a return of fringe benefits 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 value of fringe benefits in the return; (c) where an assessment has been made, but the fringe benefits chargeable to tax have been under-assessed.
C. AUTHORITIES
Candour note: no FBT-specific reported decision construes section 115WG. As the FBT mirror of section 147, it is governed by the settled 'reason to believe' jurisprudence and the GKN Driveshafts procedure, imported through section 115WL (and expressly via the recorded-reasons requirement in section 115WH(2)).
C-1 Reassessment procedure — recorded reasons and disposal of objections (cognate)
GKN Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19 (SC)
Proposition: On receipt of a notice to reassess, the assessee may seek the recorded reasons; the Assessing Officer must furnish them and dispose of the assessee's objections by a speaking order before proceeding. This procedural code governs reassessment generally.
Why relevant: Sections 115WG-115WH adopt a 'fringe benefits escaping assessment' scheme parallel to sections 147-148, and section 115WH(2) requires reasons to be recorded before issuing notice. Read with section 115WL, the GKN Driveshafts safeguards apply to FBT reassessment.
C-2 'Reason to believe' / change of opinion (cognate, via s.115WL)
Counterpart of section 147 — live nexus, no change of opinion
Principle: Reassessment requires a 'reason to believe' founded on tangible material with a live nexus to escapement; a mere change of opinion is not permitted. The deemed-escapement clauses in the Explanation to 115WG mirror those in section 147.
Source: Settled section 147 jurisprudence (e.g. CIT v. Kelvinator of India (2010) 320 ITR 561 (SC) on change of opinion), applied to FBT through section 115WL.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the Income-tax Act, 1961 (text as printed in the Act, the Chapter remaining on the statute book but rendered inapplicable from assessment year 2010-11 onwards by section 115WM). Citations are stated as reported; rulings of the Authority for Advance Rulings and orders of the Tribunal are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority (including the machinery provisions imported by section 115WL) is given. This material is for professional reference and is not legal advice.
Function in the statutory architecture
Section 115WG is the FBT reassessment charge — the counterpart of s.147. Where the Assessing Officer has 'reason to believe' that fringe benefits chargeable to tax have escaped assessment, he may, subject to ss.115WH, 150 and 153, assess or reassess them and any other escaped fringe benefits coming to notice. The Explanation deems three situations to be escapement (no return; return filed but no assessment and understatement noticed; assessment made but under-assessment). The settled s.147/148 safeguards apply through s.115WL.
Historical context / FA amendment trail
Inserted by the Finance Act, 2005 w.e.f. AY 2006-07. Inapplicable from AY 2010-11 (s.115WM); reassessment of the operative years (2006-07 to 2009-10) survives the sunset.
Operative consequences
• 'Reason to believe' founded on tangible material is the jurisdictional foundation; a mere change of opinion is impermissible (Kelvinator).
• Reassessment must be preceded by a valid s.115WH notice with recorded reasons.
• Deemed-escapement clauses mirror the Explanation to s.147.
• GKN Driveshafts procedure (furnish reasons; dispose of objections) applies.
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Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Block 1 reproduces the statutory text verbatim from the Income-tax Act, 1961 (text as printed; the Chapter remains on the statute book but is inapplicable from AY 2010-11 by s.115WM). The Finance Act, 2026 makes no substantive change to Chapter XII-H. Not legal advice.
Case Laws & Commentary
Section 115WG — Fringe Benefits Escaping Assessment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Chapter: XII-H — Income-tax on Fringe Benefits (Fringe Benefit Tax). Inserted by the Finance Act, 2005 with effect from assessment year 2006-07.
Operative life: FBT was levied for assessment years 2006-07 to 2009-10. By section 115WM (inserted by the Finance (No. 2) Act, 2009), the Chapter does not apply from assessment year 2010-11 onwards. The sections were NOT omitted — they remain on the statute book but are switched off prospectively.
Finance Act, 2026: Makes no substantive amendment to Chapter XII-H. (The Finance Act, 2026 carries only consequential cross-references to sections 115WD/115WH in a penalty provision; the FBT charge, scope and machinery are untouched.)
Part: C — Procedure for filing of return, assessment and payment.
Parallel: FBT analogue of section 147 (income escaping assessment).
A. SECTION COMMENTARY
Section 115WG is the FBT reassessment charge. Where the Assessing Officer 'has reason to believe' that fringe benefits chargeable to tax have escaped assessment for any assessment year, he may — subject to sections 115WH, 150 and 153 — assess or reassess such fringe benefits and any other escaped fringe benefits coming to notice during the proceedings. The Explanation deems three situations to be 'escapement': no return filed; return filed but no assessment made and understatement noticed; or assessment made but fringe benefits under-assessed (the FBT counterpart of the deemed-escapement Explanation to section 147).
'Reason to believe' is the jurisdictional foundation, identical in character to section 147. The reassessment must be preceded by a valid notice under section 115WH (which requires recorded reasons) and is bounded by the limitation in section 115WH(3)-(4). The settled section 147/148 safeguards — a live nexus between the material and the belief, no reassessment on a mere change of opinion, and the GKN Driveshafts procedure of furnishing reasons and disposing of objections — apply to FBT through section 115WL.
No FBT-specific reported merits decision construes section 115WG; the section 147 jurisprudence governs.
B. STATUTORY POSITION (verbatim text)
Section 115WG, Income-tax Act, 1961:
115WG. If the Assessing Officer has reason to believe that any fringe benefits chargeable to tax have escaped assessment for any assessment year, he may, subject to the provisions of sections 115WH, 150 and 153, assess or reassess such fringe benefits and also any other fringe benefits chargeable to tax which have escaped assessment and which come to his notice subsequently in the course of the proceedings under this section, for the assessment year concerned (hereafter referred to as the relevant assessment year).
Explanation.—For the purposes of this section, the following shall also be deemed to be cases where fringe benefits chargeable to tax have escaped assessment, namely:— (a) where no return of fringe benefits has been furnished by the assessee; (b) where a return of fringe benefits 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 value of fringe benefits in the return; (c) where an assessment has been made, but the fringe benefits chargeable to tax have been under-assessed.
C. AUTHORITIES
Candour note: no FBT-specific reported decision construes section 115WG. As the FBT mirror of section 147, it is governed by the settled 'reason to believe' jurisprudence and the GKN Driveshafts procedure, imported through section 115WL (and expressly via the recorded-reasons requirement in section 115WH(2)).
C-1 Reassessment procedure — recorded reasons and disposal of objections (cognate)
GKN Driveshafts (India) Ltd. v. ITO (2003) 259 ITR 19 (SC)
Proposition: On receipt of a notice to reassess, the assessee may seek the recorded reasons; the Assessing Officer must furnish them and dispose of the assessee's objections by a speaking order before proceeding. This procedural code governs reassessment generally.
Why relevant: Sections 115WG-115WH adopt a 'fringe benefits escaping assessment' scheme parallel to sections 147-148, and section 115WH(2) requires reasons to be recorded before issuing notice. Read with section 115WL, the GKN Driveshafts safeguards apply to FBT reassessment.
C-2 'Reason to believe' / change of opinion (cognate, via s.115WL)
Counterpart of section 147 — live nexus, no change of opinion
Principle: Reassessment requires a 'reason to believe' founded on tangible material with a live nexus to escapement; a mere change of opinion is not permitted. The deemed-escapement clauses in the Explanation to 115WG mirror those in section 147.
Source: Settled section 147 jurisprudence (e.g. CIT v. Kelvinator of India (2010) 320 ITR 561 (SC) on change of opinion), applied to FBT through section 115WL.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the Income-tax Act, 1961 (text as printed in the Act, the Chapter remaining on the statute book but rendered inapplicable from assessment year 2010-11 onwards by section 115WM). Citations are stated as reported; rulings of the Authority for Advance Rulings and orders of the Tribunal are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority (including the machinery provisions imported by section 115WL) is given. This material is for professional reference and is not legal advice.