Section 155 — Section 155 — Other Procedural Amendments…

STATUTORY ARCHITECTURE — 18-ROW MAP

Statutory text — Income-tax Act, 1961

155. (1) Where, in respect of any completed assessment of a partner in a firm for the assessment year

commencing on the 1st day of April, 1992, or any earlier assessment year, it is found—

(a) on the assessment or reassessment of the firm, or

(b) on any reduction or enhancement made in the income of the firm under this section, section 154,

section 250, section 254, section 260, section 262, section 263 or section 264, or

(c) on any order passed under sub-section (4) of section 245D on the application made by the firm,

that the share of the partner in the income of the firm has not been included in the assessment of the partner

or, if included, is not correct, the Assessing Officer may amend the order of assessment of the partner with a

view to the inclusion of the share in the assessment or the correction thereof, as the case may be; and the

provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in

sub-section (7) of that section being reckoned from the end of the financial year in which the final order was

passed in the case of the firm.

(1A) Where in respect of any completed assessment of a firm it is found—

(a) on the assessment or reassessment of the firm, or

(b) on any reduction or enhancement made in the income of the firm under this section, section 154,

section 250, section 254, section 260, section 262, section 263 or section 264, or

(c) on any order passed under sub-section (4) of section 245D on the application made by the firm,

that any remuneration to any partner is not deductible under clause (b) of section 40, the Assessing Officer

may amend the order of assessment of the partner with a view to adjusting the income of the partner to the

extent of the amount not so deductible ; and the provisions of section 154 shall, so far as may be, apply

thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of

the financial year in which the final order was passed in the case of the firm.

Parallel provisions — Income-tax Act, 2025 mapping

Income-tax Act, 1961	Income-tax Act, 2025
s. 155(1A) and (2): partner's remuneration not deductible under s. 40(b); share of a member of an association of persons or body of individuals	s. 288(1), Table Sl. Nos. 1 and 2
s. 155(4) and (7B): recomputation after reassessment of loss or depreciation; transferor company where s. 47A applies	s. 288(1), Table Sl. Nos. 3 and 4
s. 155(11), (11A), (14A), (15), (16), (17) and (20): s. 54H extended period; deduction under ss. 10A, 10AA, 10B, 10BA; foreign tax credit after dispute; stamp-duty value revised; compensation reduced; s. 80RRB patent revoked; credit of tax deducted in a later year	s. 288(1), Table Sl. Nos. 5 to 11
s. 155(21): recomputation for two following years where the transfer pricing option is held valid	s. 288(2)
s. 155(1), (4A), (5), (5A), (5B), (7), (10A), (12), (13), (14), (18) and (19)	No corresponding provision in s. 288

Function in the statutory architecture

Section 155 empowers the Assessing Officer to amend completed assessments where later events make the original order incorrect. Each sub-section applies s. 154 "so far as may be", and most fix their own starting point for the four-year period under s. 154(7). Examples are the end of the financial year in which the firm's final order was passed, or of the previous year in which compensation was received or the patent order made.

Several sub-sections are historical: (1) covers partners for the assessment year commencing on 1 April 1992 or earlier; (4A), (5) and (5A) withdraw investment allowance, development rebate and development allowance; (12) covers assessment years commencing before 1 April 1988. Sub-sections (6), (7A), (8), (8A), (9), (9A), (10), (10B) and (10C) are "[Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1992.]". Sub-section (3) is shown as "[***]".

Operative consequences

Under (14), credit for tax deducted or collected is given if the certificate is produced within two years from the end of the assessment year, provided the income was disclosed in the return.
Under (14A), foreign tax credit denied because of a dispute is allowed if, within six months from the end of the month the dispute is settled, the assessee furnishes evidence and an undertaking against double credit.
Under (20), the assessee applies within two years from the end of the financial year in which tax was deducted; credit is not allowed in any other year.

Status

Section 155 is operative for AY 2026-27. Sub-section (21) is shown as "inserted after sub-section (20) of section 155 by the Finance Act, 2025, w.e.f. 1-4-2026". The Finance Act, 2026 does not amend s. 155.

In the 2025 Act the amendments are set out in the Table to s. 288(1), with the transfer pricing recomputation in s. 288(2). Rectification under s. 154 corresponds to s. 287.

The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 288.

Case law on Section 155

ITAT, High Court and Supreme Court judgments applying this section, on BharatTax.net, our income tax case law search.

Section 155 case laws

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