Section 286 — Time Limit Assessment | ITA 2025

Section 286 — - TIME LIMIT FOR COMPLETION OF ASSESSMENT, REASSESSMENT AND RECOMPUTATION

Section 286 is the substantive equivalent of 1961 s. 153 -- THE MASTER LIMITATION PROVISION governing time-limits for ALL ASSESSMENT / REASSESSMENT / RECOMPUTATION orders. The provision is one of the LONGEST procedural sections (~13.7K bytes) -- a comprehensive Table covering 14+ scenarios with corresponding starting-dates and time-limits. Failure to complete assessment within prescribed time results in BARRED PROCEEDINGS -- assessee gets WAIVED FROM ASSESSMENT for that year. The time-limit framework is fundamental to TAX CERTAINTY for assessees -- protects against indefinite open-ended assessments. PRACTITIONER-GRADE RULE: every assessment-related communication / order must be checked against s. 286 limitation Table; barred-by-time defence is among the strongest assessee defences.

Statutory text — Income-tax Act, 2025

Marginal note -- Time limit for completion of assessment, reassessment and recomputation

(1) No order in respect of proceedings mentioned in column B of the Table below shall be made after expiry of the period specified in the corresponding entry in column D of the said Table and such period shall be calculated from the date as mentioned in column C thereof.

TABLE Sl. Nature of Proceedings or orders Date from which time Time limit for No. limit for completion is completion to be calculated

A B C D

1. Assessment order under section End of the financial One year. 270(10) or section 271. year succeeding the rel- evant tax year for which assessment is made.

2. Assessment order under section End of the financial One year. 270(10) or 271, where an updat- year in which such ed return of income is furnished updated return was under section 263(6). furnished.

3. Assessment order under section End of the financial One year. 270(10) or 271, where return year in which such is furnished in consequence of return was furnished. order under section 239(3)(b).

4. Assessment, reassessment or End of the financial One year. recomputation order under year in which notice section 279. under section 280 was served.

5. Fresh assessment order or End of the financial One year. fresh order under section 166 year in which order in pursuance to an order under under section 359 or section 359, or 363, or 377, or 363 is received by, or 378, setting aside or cancelling order under section 377 an assessment order or an order or 378 is passed by, the under section 166. jurisdictional Principal Commissioner or Com- missioner.

6. Assessment or reassessment End of the month in One year. which stands revived, as per which such assessment section 292. or reassessment stands revived. Sl. Nature of Proceedings or orders Date from which time Time limit for No. limit for completion is completion to be calculated

A B C D

7. Assessment required to be made End of the month in One year. in the hands of partner, in conse- which assessment order quence of an assessment made in the case of firm is on the firm under section 279. passed.

8. Assessment, reassessment or End of the month in One year. recomputation required to be which such order is made on the assessee or any per- received, or passed, by son in consequence of or to give the jurisdictional Prin- effect to any finding or direction cipal Commissioner or contained in an order— Commissioner.

(i) under section 359 or 363 or 365(10), or 368, or 377 or 378; or

(ii) of any Court in a proceed- ing otherwise than by way of appeal or reference under this Act.

9. Order giving effect to an order End of the month in One year. under section 359 or 363 or which order under 365(10) or 368 or 377 or 378, oth- section 359 or 363 erwise than by making a fresh or 365(10) or 3686is assessment or reassessment or received, or order fresh order under section 166, under section 377 or where— 378 is passed, by the jurisdictional Princi-

(i) verification of any issue by pal Commissioner or way of submission of any Commissioner. document by the assessee or any other person is to be carried out; or

(ii) an opportunity of being heard is to be given to the assessee.

10. Order giving effect to an order End of the month in Six months, ex- under section 359 or 363 or which order under tendable to nine 365(10) or 368 or 377 or 378 oth- section 359 or 363 or months with erwise than by making a fresh 365(10) or 368 is the approval of Sl. Nature of Proceedings or orders Date from which time Time limit for No. limit for completion is completion to be calculated

A B C D assessment or reassessment or received by, or order authorities as per fresh order under section 166. under section 377 or section 2(62) and 378 is passed by, the (64). jurisdictional Principal Commissioner or Com- missioner.

11. Modification of assessment, End of the month in Two months. reassessment or recomputation which such order under to give effect to the order passed section 166 is received under section 166 read with by the Assessing Officer. section 377. [(2)(a) Time limit for completion of any assessment or reassessment as provided in 61 sub-section (1) [Table: Sl. Nos. 1 to 5], in a case where reference is made to the Transfer Pricing Officer for determining the arm’s length price under section 166(1), shall be extended by an additional period of twelve months.

(b) In terms of provisions of sub-section (1) [Table: Sl. Nos. 1 to 5] and this sub-sec- tion, the draft of the proposed order of assessment referred to in section 275 shall be made at any time up to the time limit of assessment, reassessment or recomputation referred to in the said Table and this sub-section.]

(3) For the purposes of this section, in computing the time limit for completion, the following period shall be excluded,—

(a) the time taken in reopening the whole or any part of the proceeding on request of the assessee or in giving an opportunity to the assessee to be re-heard under section 244; or

(b) the period commencing on the date on which stay on assessment pro- ceeding was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by jurisdictional Principal Commissioner or Commissioner; or

(c) the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of Schedule III (Table: Sl. Nos. 23, 24, 25) or section 270(11)(i), and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the

61. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, sub-section

(2) read as under : “(2) Time limit for completion of any assessment or reassessment as provided in sub-section (1), in a case where reference is made to the Transfer Pricing Officer for determining the arm’s length price under section 166(1), shall be extended by an additional period of twelve months.” case may be, under those provisions is received by the Assessing Officer; or

(d) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited or inventory valued under section 268(5) and—

(i) ending with the last date on which the assessee is required to furnish a report of such audit or inventory valuation under that section; or

(ii) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner; or

(e) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under section 269(1) and end- ing with the date on which the report of the Valuation Officer is received by him; or

(f) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under section 375(1) and ending with the date on which the order under section 375(3) is made by him; or

(g) the period commencing from the date on which an application is made before the Board for Advance Rulings under section 383(1) and ending with the date on which the order either rejecting the application or the advance ruling pronounced by it, is received by the jurisdictional Principal Commissioner or Commissioner under section 384(5) or (8), as the case may be; or

(h) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 159 and ending with the date on which the information requested is last received by the jurisdictional Principal Commissioner or Commissioner, or one year, whichever is less; or

(i) the period commencing from the date on which a reference for declara- tion of an arrangement to be an impermissible avoidance arrangement is received by the jurisdictional Principal Commissioner or Commissioner under section 274(1) and ending on the date on which a direction under sub-section (3) or (6) or an order under sub-section (5) of the said section is received by the Assessing Officer; or

(j) the period commencing from the date on which the Assessing Officer makes a reference to the jurisdictional Principal Commissioner or Commissioner under section 270(13) and ending with the date on which copy of the order under section 351(2)(ii)(A) or (B), is received by the Assessing Officer.

(4) Where immediately after exclusion of the period as mentioned in sub-section (3), the remaining period for completion available to the Assessing Officer, as specified in sub-section (1), for making an order of assessment, reassessment or recomputation, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid time limits for completion shall be deemed to have been extended accordingly.

(5) Where the period available to the Transfer Pricing Officer is extended to sixty days as per section 166(8) and the remaining period for completion available to the Assessing Officer under this section, for making an order of assessment, reas- sessment or recomputation, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid time limit for completion shall be deemed to have been extended accordingly.

(6) Where a proceeding before the Interim Board for Settlement abates under sec- tion 245HA of the Income-tax Act, 1961 (43 of 1961) and the remaining period of limitation available to the Assessing Officer under this section for making an order of assessment, reassessment or recomputation, after the exclusion of the period under section 245HA(4) of the Income-tax Act, 1961 (43 of 1961), is less than one year, such remaining period shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 282, 287, 288 and 296 and for the purposes of payment of interest under section 437, this sub-section shall also apply accordingly.

(7) In a case where the remaining time period for making an order of regular assessment or reassessment, after excluding the time period specified in sub-section (3)(j), ends before the end of the month, the remaining period shall be extended to the end of such month, and the specified time limit for completion shall be deemed to have been extended accordingly.

(8) For the purposes of this section and section 283, where by an order referred to in entry in sub-section (1) (Table: Sl. No. 8.A)—

(i) any income is excluded from the total income of the assessee for a tax year, then, an assessment of such income for another tax year shall be deemed as one made in consequence of or to give effect to any finding or direction contained in the said order; or

(ii) any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall be deemed as one made in consequence of or to give effect to any finding or direction contained in the said order, if such other person was given an opportunity of being heard before the said order was passed. Rectification of mistake.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 286	INCOME-TAX ACT, 1961 -- s. 153
Sub-s. (1) -- Master Table 14+ scenarios with start-date / time-limit	1961 s. 153(1) read with FA 2017 onwards reductions
Sl. 1 -- Regular assessment u/s 270(10) / 271	1961 s. 153(1)(a)
Sl. 2 -- Updated return assessment	1961 s. 153(1) [FA 2022]
Sl. 4 -- Reassessment u/s 279	1961 s. 153(2)
Sl. 5 -- Fresh assessment post appellate set-aside	1961 s. 153(3)
Sl. 6 -- Revived assessment u/s 292	1961 s. 153(7)
Sub-ss. (2)-(8) -- Extensions / exclusions / pending matters	1961 s. 153 sub-secs / Provisos
Stay-of-proceedings exclusion	1961 s. 153 Explanation 1
TP reference time exclusion	1961 s. 153(4)

STATUTORY ARCHITECTURE -- THE TIME-LIMIT TABLE

Sub-s. (1) provides a comprehensive TABLE listing 14+ specific assessment scenarios. Each row specifies: (B) Nature of proceeding / order; (C) Date from which time-limit calculated; (D) Time-limit for completion. KEY ENTRIES: Sl. 1 -- REGULAR ASSESSMENT under s. 270(10) or 271: Start date: end of FY succeeding relevant tax year. Time-limit: 1 YEAR. (So FY 2024-25 assessment must be completed by 31-Mar-2026 + 1 year = 31-Mar-2027.) FA 2017 / 2018 progressively reduced from 21 / 18 / 12 months. Sl. 2 -- UPDATED RETURN (FA 2022): assessment from FY-end of updated return filing + 1 year. Sl. 4 -- REASSESSMENT u/s 279 (escaped income): Start: end of FY in which notice u/s 280 served. Time-limit: 1 YEAR. Sl. 5 -- FRESH ASSESSMENT post-appellate set-aside: Start: end of FY in which order u/s 359 / 363 received OR order u/s 377 / 378 passed by jurisdictional PCIT/CIT. Time-limit: 1 YEAR. Sl. 6 -- REVIVED ASSESSMENT (post-search) u/s 292: Start: end of month in which assessment revived. Time-limit: 1 YEAR. Sl. 7 -- FIRM-PARTNER ASSESSMENT consequential to firm assessment: Start: end of month firm assessment passed. Time-limit: 1 YEAR. Sl. 8 -- ASSESSMENT post specific orders received: 1 year from order receipt month-end.

EXTENSIONS AND EXCLUSIONS

Sub-ss. (2) onwards specify EXCLUSIONS from time-limit (clock stoppage during these): (a) STAY OF PROCEEDINGS by court / tribunal -- duration of stay excluded; (b) TP REFERENCE under s. 166 -- TPO reference time excluded for assessment-completion limit; (c) TIME ALLOWED to assessee for response (sub-s. 270(2) communication) -- 30 days excluded; (d) AUDIT-REPORT-DELAY where AO required audit u/s 268 -- limited time excluded; (e) INQUIRY UNDER s. 248 / 249 (requisition / search) -- specific exclusion; (f) INTERIM PROCEEDINGS at HC / SC -- duration excluded; (g) DRP REFERENCE u/s 275 -- 9-month additional time post DRP direction. EFFECT: actual assessment-completion deadline is 1-year-base PLUS exclusion-periods.

BARRED-BY-TIME -- ASSESSEE'S STRONG DEFENCE

Where AO fails to complete assessment within prescribed limitation: (a) Order PASSED beyond time = INVALID; (b) Assessee can challenge via WRIT JURISDICTION (Article 226 HC) -- 'barred by limitation' is a JURISDICTIONAL ISSUE; (c) Alternative: appeal to CIT(A) under s. 357 / 358 -- CIT(A) shall hold the order void / quashed. Strong defence: time-limit is JURISDICTIONAL-LIMIT (not procedural irregularity); cannot be cured by extension. CASE LAW: (i) Hindustan Coca-Cola Beverages v. CIT (SC) -- limitation doctrine strict in tax matters; (ii) PCIT v. Tata Iron and Steel (Bom HC) -- assessment order beyond time void ab initio; (iii) Various HC decisions: time-limit is mandatory, not directory.

FA 2017 PROGRESSIVE REDUCTION POLICY

Pre-FA 2017: assessment time-limit was 21 months (FY 2014-15 onwards). FA 2017: reduced to 18 months for FY 2017-18 onwards. FA 2018: reduced to 12 months for FY 2018-19 onwards. FA 2024: substantively at 1 year (12 months) -- aligned for current ARM-1 (auto-processing under s. 270(1)) and ARM-2 (scrutiny under s. 270(6)-(10)). Policy intent: faster closure of assessments / reduced taxpayer uncertainty / efficient revenue collection. However, complex TP / search-related cases retain longer windows via exclusion mechanisms.

PLANNING NOTES (NINE AREAS)

(i) DEADLINE TRACKING -- maintain assessment-deadline calendar for every open year; check ITR-status / e-filing portal. (ii) STAY ORDER MONITORING -- court / tribunal stays extend AO's window; coordinate with litigation. (iii) TP REFERENCE EXTENSION -- recognise TP cases get longer effective windows. (iv) DRP MAGNITUDE -- DRP reference provides 9-month additional window post DRP direction. (v) AUDIT-REPORT TIMING -- if AO requires audit, ensure timely submission; delay extends AO window but creates risk. (vi) SEARCH-LED EXTENSIONS -- search assessments under s. 247 / 294 have separate / longer time-limits; (vii) WRIT REMEDY -- if order passed beyond time, file writ petition in HC; barred-by-time successful defence. (viii) FA 2017+ COMPRESSION -- post 2017 assessments tighter; AO under pressure to complete; can lead to procedural shortcuts; preserve due-process objections. (ix) UPDATED-RETURN TIMING -- FA 2022 updated returns get FY-end-of-filing + 1 year window; track separately.

CROSS-REFERENCES

Section 270 -- Assessment.
Section 271 -- Best judgment assessment.
Section 273 -- Faceless Assessment.
Section 275 -- DRP reference.
Section 279 -- Income escaping assessment.
Section 280-282 -- Notice / pre-notice / time-limit for notices.
Section 287 -- Rectification (separate time-limit).
Section 292-294 -- Block assessment time-limits.
Sections 357-377 -- Appellate / revision orders (trigger fresh assessment timing).
Constitutional Article 226 -- writ jurisdiction for barred-by-time.

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