Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. Supplementary provisions for reassessment under section 147: sub-section (1) fixes the rate of tax in a reassessment by reference to the rate applicable for the relevant assessment year; sub-section (2) permits the assessee, in a reassessment, to claim that an item earlier over-assessed (or wrongly assessed) be reduced, and provides for dropping the proceedings in stated circumstances, subject to the finality of concluded matters.
FA 2026: No substantive amendment by the Finance Act, 2026; sub-section (2) carries the reference to the position as it stood before the commencement of the Finance (No. 2) Act, 2024.
A. SECTION COMMENTARY
Section 152 supplies the machinery rules that accompany a reassessment under section 147. Sub-section (1) ensures that the escaped income is taxed at the rate that would have applied for the relevant assessment year. Sub-section (2) gives the assessee a limited, defensive benefit: in reassessment proceedings he may show that an amount has been over-assessed and seek its reduction, and the proceedings may be dropped where the assessee satisfies the AO that the income had in fact been assessed or that the basis of reopening does not survive — but always subject to the principle that reassessment cannot be used to re-open concluded matters in the assessee's favour.
The provision is largely uncontested in isolation; its operation is governed by the scope-of-reassessment principle in Sun Engineering — the assessee cannot, under cover of section 152(2), re-agitate or claim recomputation of issues that attained finality in the original assessment, the reassessment being confined to the escaped income.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
152. (1) In an assessment, reassessment or recomputation made under section 147, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment.
(2) Where an assessment is reopened under section 147, the assessee may, if he has not impugned any part of the original assessment order for that year either under sections 246 to 248 or under section 264, claim that the proceedings under section 147 shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account, or the assessment or computation had been properly made :
Provided that in so doing he shall not be entitled to reopen matters concluded by an order under section 154, 155, 260, 262 or 263.
(3) Where a search has been initiated under section 132 or requisition is made under section 132A, or a survey is conducted under section 133A other than under sub-section (2A) of the said section, on or after the 1st day of April, 2021 but before the 1st day of September, 2024, the provisions of sections 147 to 151 shall apply as they stood immediately before the commencement of the Finance (No. 2) Act, 2024.
(4) Where, in a case other than that covered under sub-section (3), a notice under section 148 has been issued or an order under clause (d) of section 148A has been passed, prior to the 1st day of September, 2024, the assessment, reassessment or recomputation in such case shall be governed as per the provisions of sections 147 to 151, as they stood immediately before the commencement of the Finance (No. 2) Act, 2024.
C. AUTHORITIES
The governing authority is the scope-of-reassessment principle; section 152(2) is read subject to it.
CIT v. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC) — controlling
Held: Reassessment is confined to the escaped income; the assessee cannot, in reassessment, seek to re-open or re-compute matters that have attained finality in the original assessment, nor convert the proceeding into a fresh assessment to his advantage. The benefit available in reassessment is limited and cannot defeat the finality of concluded issues.
Relevance: Defines the limits within which section 152(2) operates: the assessee's right to seek reduction of an over-assessed amount cannot be used to re-agitate concluded matters. (See section 147.)
Position: Sub-section (1) applies the rate for the relevant assessment year to the reassessment. Sub-section (2) allows the assessee to claim reduction of an over-assessment and provides for dropping the proceedings where appropriate, confined by the Sun Engineering principle. The provision is machinery and has attracted little independent litigation.
Candour note: No major Supreme Court decision construes section 152 in isolation; it is applied as supplementary machinery read with sections 147-151 and Sun Engineering.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; orders of the Tribunal, Authority for Advance Rulings and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 152 — Other Provisions
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live. Supplementary provisions for reassessment under section 147: sub-section (1) fixes the rate of tax in a reassessment by reference to the rate applicable for the relevant assessment year; sub-section (2) permits the assessee, in a reassessment, to claim that an item earlier over-assessed (or wrongly assessed) be reduced, and provides for dropping the proceedings in stated circumstances, subject to the finality of concluded matters.
FA 2026: No substantive amendment by the Finance Act, 2026; sub-section (2) carries the reference to the position as it stood before the commencement of the Finance (No. 2) Act, 2024.
A. SECTION COMMENTARY
Section 152 supplies the machinery rules that accompany a reassessment under section 147. Sub-section (1) ensures that the escaped income is taxed at the rate that would have applied for the relevant assessment year. Sub-section (2) gives the assessee a limited, defensive benefit: in reassessment proceedings he may show that an amount has been over-assessed and seek its reduction, and the proceedings may be dropped where the assessee satisfies the AO that the income had in fact been assessed or that the basis of reopening does not survive — but always subject to the principle that reassessment cannot be used to re-open concluded matters in the assessee's favour.
The provision is largely uncontested in isolation; its operation is governed by the scope-of-reassessment principle in Sun Engineering — the assessee cannot, under cover of section 152(2), re-agitate or claim recomputation of issues that attained finality in the original assessment, the reassessment being confined to the escaped income.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
152. (1) In an assessment, reassessment or recomputation made under section 147, the tax shall be chargeable at the rate or rates at which it would have been charged had the income not escaped assessment.
(2) Where an assessment is reopened under section 147, the assessee may, if he has not impugned any part of the original assessment order for that year either under sections 246 to 248 or under section 264, claim that the proceedings under section 147 shall be dropped on his showing that he had been assessed on an amount or to a sum not lower than what he would be rightly liable for even if the income alleged to have escaped assessment had been taken into account, or the assessment or computation had been properly made :
Provided that in so doing he shall not be entitled to reopen matters concluded by an order under section 154, 155, 260, 262 or 263.
(3) Where a search has been initiated under section 132 or requisition is made under section 132A, or a survey is conducted under section 133A other than under sub-section (2A) of the said section, on or after the 1st day of April, 2021 but before the 1st day of September, 2024, the provisions of sections 147 to 151 shall apply as they stood immediately before the commencement of the Finance (No. 2) Act, 2024.
(4) Where, in a case other than that covered under sub-section (3), a notice under section 148 has been issued or an order under clause (d) of section 148A has been passed, prior to the 1st day of September, 2024, the assessment, reassessment or recomputation in such case shall be governed as per the provisions of sections 147 to 151, as they stood immediately before the commencement of the Finance (No. 2) Act, 2024.
C. AUTHORITIES
The governing authority is the scope-of-reassessment principle; section 152(2) is read subject to it.
1. Scope-of-reassessment limit on section 152(2)
CIT v. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC) — controlling
Held: Reassessment is confined to the escaped income; the assessee cannot, in reassessment, seek to re-open or re-compute matters that have attained finality in the original assessment, nor convert the proceeding into a fresh assessment to his advantage. The benefit available in reassessment is limited and cannot defeat the finality of concluded issues.
Relevance: Defines the limits within which section 152(2) operates: the assessee's right to seek reduction of an over-assessed amount cannot be used to re-agitate concluded matters. (See section 147.)
Section 152(1) — rate of tax; section 152(2) — defensive relief
Position: Sub-section (1) applies the rate for the relevant assessment year to the reassessment. Sub-section (2) allows the assessee to claim reduction of an over-assessment and provides for dropping the proceedings where appropriate, confined by the Sun Engineering principle. The provision is machinery and has attracted little independent litigation.
Candour note: No major Supreme Court decision construes section 152 in isolation; it is applied as supplementary machinery read with sections 147-151 and Sun Engineering.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; orders of the Tribunal, Authority for Advance Rulings and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.