Reopening in 2026: Sections 280 and 281 of the Income Tax Act, 2025: A Practitioner's Guide to the New Reassessment Regime

Author's note: This article is a companion piece to "Old Act, New Numbers: A Practical Concordance Between the Income Tax Act, 1961 and the Income Tax Act, 2025," published in CAclubindia on 13 May 2026. The earlier article surveyed the renumbering at a high level. This one drills into the single most-litigated provision of the old Act - Section 148 and the show-cause procedure introduced in 2021 by way of Section 148A, now reorganised as Sections 280 and 281 of the new Act.

1. Why Reassessment is the New Act's Biggest Practical Question

Of all the provisions in the Income-tax Act, 1961, none has generated as much litigation in the last five years as Section 148. The Finance Act, 2021 redrew the entire architecture of reassessment, introducing Section 148A as a mandatory pre-notice procedure, recasting the time limits at Section 149, and tightening the sanction requirement at Section 151. What followed was three years of writ litigation. The Supreme Court intervened in Union of India v. Ashish Agarwal (May 2022) to salvage the avalanche of notices issued after 1 April 2021 under the un-amended old regime; the same Court returned to the subject in Rajeev Bansal v. Union of India (October 2024) to resolve how TOLA extensions interact with the new time limits. Across the High Courts, almost every assessee challenging a reassessment notice has framed the challenge as a procedural one.

Against that backdrop, the Income-tax Act, 2025 came into force on 1 April 2026. The new Act does not abandon the 2021 reform structure. It preserves the information-led reopening, the show-cause procedure, the threshold-based time limits, and the prior approval requirement. What it does is renumber and reorganise - Section 148 becomes Section 280, Section 148A becomes Section 281, Section 149 becomes Section 282, and so on. The procedure looks familiar to anyone who has prepared a 148A(b) reply in the last four years. However, the renumbering matters, the transition rules matter, and a few quiet substantive shifts matter even more.

This piece is for the practitioner on the ground: the CA who has a 148A SCN in their inbox today, the assessee staring at an order under Section 148A(3), or the partner advising on whether a writ challenge is worth filing. We will walk through Section 280 and Section 281 in detail, examine the time limits at Section 282, the sanction at Section 284, and the all-important transition clause at Section 536(2)(c) that decides which Act governs the proceeding currently sitting on your desk. Section 8 below includes a sanitised case study from our own practice.

2. The Reassessment Block at a Glance: Sections 279 to 286

The new Act consolidates the reassessment provisions into a contiguous block of eight sections, running from Section 279 to Section 286. The concordance with the 1961 Act is one-to-one for the main provisions. The table below maps each old section to its new number:

A reader of the old Act will not get lost. The internal scheme of each section has been retained with only modest drafting changes. Where a sub-section has been split or renumbered within a section, the substance is almost always traceable to a clause in the corresponding 1961 provision. The Income Tax Department's own FAQ portal acknowledges this explicitly, observing that no assessment, reassessment, or recomputation under Section 279 may be made without a notice under Section 280, which the Department itself describes as corresponding to Section 148 of the old Act.

3. Section 280 - Issue of Notice: What Survives, What's Renumbered

Section 280 of the new Act is the operative reassessment notice. It performs the same function as the old Section 148: it triggers the obligation on the assessee to furnish a return of income for the assessment year (now called the "tax year") in respect of which income is alleged to have escaped assessment. Three features carry forward without substantive change.

First, the notice can only be issued after the Assessing Officer (AO) is satisfied that there is information suggesting that income chargeable to tax has escaped assessment. The word "information" is defined in Section 280 in terms that substantially track the 2021 Explanation 1 to Section 148 - flagged data from a risk management strategy, audit objections, information from a competent authority under a tax treaty, notified schemes, or any other prescribed source. The information must exist on record before the notice issues, not be conjured up afterwards.

Second, in practice, the Section 280 notice is issued together with the order passed under Section 281(3) - the order that records, after considering the assessee's reply to the show-cause notice, that this is a fit case for reassessment. The Department's own FAQ portal explicitly states that the Section 280 notice "must be accompanied by a copy of the order passed under Section 281(3)." The bare text of the Act does not use the words "shall be accompanied by," but it does provide in substance that a Section 280 notice cannot issue without the Section 281 procedure being complete. A Section 280 notice that arrives in isolation, without the Section 281(3) order, is therefore at the very least exposed to a serious procedural challenge. Practitioners should make a habit of checking for the attached order the moment a notice lands.

Third, the notice must require the assessee to furnish a return within a period specified in the notice, which shall not exceed three months from the date on which it is served. This three-month outer limit is unchanged from the old regime, and it remains the assessee's first procedural breathing space - long enough to retrieve records, instruct counsel, and prepare a return that does not surrender ground that does not need to be surrendered.

The renumbering does, however, have one practical consequence that catches CAs out. In every notice template, every internal noting, and every appellate filing for years to come, the cross-references shift. A reply that argues a notice is barred under "Section 149" needs to argue it is barred under "Section 282." A ground of appeal that says the AO failed to record reasons "as required by Section 148" needs to refer to Section 280. The substance survives. The numbers don't.

4. Section 281 - The Procedure Before Notice: The Heart of the New Regime

Section 281 is where the assessee's procedural rights live. It is the renumbered and lightly redrafted Section 148A of the old Act, and it preserves the four-step structure that the 2021 reform introduced.

Step one: The Assessing Officer must have information suggesting that income chargeable to tax has escaped assessment for the relevant tax year. Step two: The AO must issue a show-cause notice under Section 281(1), providing the information and giving the assessee an opportunity to respond within the time specified in the notice. Step three: The AO must consider the reply, on the material on record. Step four: With the prior approval of the specified authority under Section 284, the AO must pass a reasoned order under Section 281(3) deciding whether or not it is a fit case to issue a notice under Section 280.

Each step is independently challengeable, and that is the practical importance of Section 281. A defect at any step is a defect that can be carried into appeal or writ - and historically, has been.

The information-sharing obligation under Section 281(1) deserves particular attention. The SCN must enclose the information on which the AO proposes to act. A bare allegation that "information has been received" without sharing what that information is, where it came from, or what it shows, falls short of the statutory requirement. Almost every reported decision under the old Section 148A has emphasised this point: an opportunity to respond is illusory unless the assessee is told what to respond to. Section 281(1) carries the same standard forward.

Sub-section (4) of Section 281 contains the exceptions - the circumstances in which the AO is permitted to skip the show-cause procedure and issue a Section 280 notice directly. These include cases where the information has come through the faceless collection scheme notified under Section 260, where the Approving Panel has issued directions under Section 274(6) on an impermissible avoidance arrangement, and where there is a finding or direction in an appellate or court order. As under the old jurisprudence, these exceptions are likely to be construed narrowly in practice. Where the AO invokes Section 281(4), the burden is on the Department to show that the exception genuinely applies. A reflexive recital of "information received under Section 260" without underlying material has never satisfied a Tribunal under the old regime, and the same standard should hold under the new.

The 2021 reform was a hard-won procedural settlement. The new Act, in broad terms, ratifies that settlement rather than reopening it. For practitioners, that is good news: the playbook for replying to a 281(1) SCN is the playbook for replying to a 148A(b) SCN, with the section numbers updated.

5. Section 282 - Time Limits: Three Years, Ten Years, and the Escaped-Income Threshold

Section 282 governs the time within which a notice under Section 280 or a show-cause under Section 281 may be issued. The framework is familiar from the post-2021 Section 149 of the old Act.

The ordinary outer limit is three years from the end of the relevant tax year. Beyond three years, and up to a maximum of ten years from the end of the relevant tax year, a notice may be issued only where the AO has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of an asset, expenditure in respect of a transaction or transactions, or an entry in the books of account, has escaped assessment and amounts to or is likely to amount to fifty lakh rupees or more for that tax year.

Three points deserve emphasis for the practitioner:

First, the fifty-lakh condition attaches to the escaped income as revealed by the information - that is, the asset, expenditure or entry the information points to - and not to any larger figure which the Department may later seek to add in the reassessment. An addition under Section 68 of three lakh rupees does not retrospectively become a fifty-lakh case because the underlying credit aggregates to fifty lakh. The threshold lives at the entry stage; it is not satisfied by what the Department hopes to do once the door is open.

Second, the escaped income must be represented in a specific form: an asset, expenditure on transactions, or an entry in the books. This is not a drafting flourish. Where income has already been fully disclosed in the return and the AO merely wishes to re-characterise its head - say, business income re-characterised as short-term capital gains - there is a strong argument that this is not the kind of asset/expenditure/entry-based escapement contemplated for the extended ten-year window. Whether courts will consistently adopt this view under the 2025 Act remains to be seen, but the textual hook for the argument is the same as it was under the post-2021 Section 149.

Third, sub-section (5) of Section 282 carries forward the principle that periods excluded from the limitation calculation under the old Section 149 - stays, court orders, time taken in giving the assessee an opportunity - remain excluded. The drafting echoes the post-Rajeev Bansal clarifications: where the assessee secured a stay from any authority, that period is liftable; where the SCN response period overlapped with the running of limitation, the AO gets that buffer back. Practitioners must do the arithmetic carefully and not assume that the calendar date is the operative date.

Where time limits are concerned, the new Act has not lowered the bar. A challenge to a notice on time-limit grounds remains as viable as it was under the old Section 149, and the line of cases from Ashish Agarwal through Rajeev Bansal - built around exactly this arithmetic - will continue to be cited. Section 282 is the new label on a largely well-mapped subject, with a structure broadly similar to the post-2021 Section 149, subject to future judicial interpretation under the new numbering.

6. Section 284 - Sanction of the Specified Authority

Section 284 requires the Assessing Officer to obtain the approval of a "specified authority" before passing the order under Section 281(3) and before issuing the notice under Section 280. The statutory text is short and worth quoting in full: "The specified authority for the purposes of sections 280 and 281 shall be the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director."

That single sentence carries a quiet but significant change from the post-2021 regime, and practitioners should mark it carefully. Under the amended Section 151 of the 1961 Act, sanction within the three-year window came from the Principal Commissioner or Commissioner; beyond three years, sanction had to come from the Principal Chief Commissioner or Chief Commissioner. The graded structure reflected the gravity of reopening older years and was, in practice, a real safeguard: beyond-three-year notices often fell at the PCCIT/CCIT approval stage where the file simply did not justify the higher imprimatur.

Section 284 abandons that graded structure. The same Additional or Joint Commissioner - or the corresponding Additional or Joint Director - sanctions a one-year-old reopening and a ten-year-old reopening. There is no escalation by age of the assessment year. For the assessee, the protective effect of a Chief Commissioner's scrutiny on older-year reopenings no longer applies. This is a meaningful dilution of the sanction safeguard, and it has not yet received the attention from the profession that it deserves.

The legal proposition surrounding the approval itself remains intact. The word "approval" is not a clerical act. The specified authority is required to apply its mind to the proposed action. A mechanical "approved" endorsement on a file noting is not an approval in the legal sense, and tribunals have consistently set aside reassessments where the approval reads as a rubber stamp. Section 284 imports that jurisprudence wholesale. Where a Section 281(3) order survives the show-cause stage but the underlying approval is non-speaking, the order remains vulnerable on appeal.

Practical guidance: Two points follow. First, when filing an appeal against a reassessment, request the approval file under the Right to Information Act or seek a copy through the appellate authority. The contents of the approval - whether it is a one-line endorsement or a reasoned concurrence - frequently decide whether the addition survives. Second, given the dilution of sanction authority for older years, expect to see more beyond-three-year reopenings under the new regime. Treat the approval document as a critical examining ground in every such case.

7. The Quiet Shift on Document Identification Number Compliance

One change in the new regime has received less attention than it deserves, and CAs should be aware of it before they raise a DIN-based ground of appeal that may no longer succeed.

Under CBDT Circular No. 19/2019 read with the consistent line of decisions of the High Courts and the Tribunal, a communication issued without a Document Identification Number (DIN), or with a manually-quoted DIN not generated through the system, was treated as non-est. The Bombay High Court, the Delhi High Court, and the Tribunal Benches across the country struck down assessments and notices on this footing, in some cases involving very substantial demands.

Departmental guidance under the new Act, however, suggests a more forgiving administrative approach to DIN irregularities. The position emerging from the Department's internal SOPs and FAQ guidance is that minor defects or omissions in the quoting of DIN should not, by themselves, invalidate an assessment order, provided the communication can be linked in the system to a valid, system-generated DIN. As of writing, no clear-cut provision in the 2025 Act itself states this, and the High Court jurisprudence built around Circular 19/2019 remains anchored in the 1961-Act era. How far courts will allow administrative guidance under the 2025 Act to dilute that jurisprudence remains an open question. The practical effect, for the moment, is that a defence built solely on a DIN omission - without more - may not carry the weight in the new regime that it did at the height of the Circular 19/2019 line.

This does not mean DIN compliance is irrelevant. A complete absence of a DIN, or a clear breach of the underlying procedure, remains a viable ground. But the assessee who pinned everything on a missing DIN under the old regime will need to think harder. The defence is more nuanced now, and the better practice is to raise DIN as one ground among several, not as a standalone fatal flaw.

8. Section 536(2)(c) - What Happens to Your Pending 148A SCNs After 1 April 2026

This is the question every practitioner has been asked since April. A 148A(b) SCN was issued in March 2026 under the old Act. The reply was filed. The order under Section 148A(3) is yet to be passed. The new Act has come into force on 1 April 2026. Which Act governs the proceedings from here on?

The answer is supplied unambiguously by Section 536(2)(c) of the new Act. The repealed provisions of the 1961 Act continue to apply to any proceeding pending on the date of commencement of the new Act. A reassessment proceeding initiated under the old Act - by issuance of a 148A(1) SCN, by an order under 148A(3), or by a Section 148 notice - before 1 April 2026 remains a 1961-Act proceeding until it is concluded. The new Act does not migrate the proceeding to its own framework.

The Income Tax Department's own FAQ portal puts the position beyond doubt with a worked example. An AO issues a Section 148A(1) SCN to a taxpayer for AY 2022-23 on 20 March 2026. After considering the response, the AO passes an order under Section 148A(3) on 15 April 2026, and issues the Section 148 notice on 30 April 2026. The Department's clarification is that the entire sequence - including the order passed on 15 April and the notice issued on 30 April, both after the new Act came into force - remains governed by the 1961 Act.

There are three practical takeaways for the CA's file:

1. Maintain the Old Terminology for Pending Cases: If a 148A(b) SCN or a 148 notice in your hand was issued before 1 April 2026, your reply, your writ, and your appeal will all be drafted in the language of the 1961 Act. Quote Section 147, Section 148, Section 148A, Section 149, and Section 151. Do not switch to the new numbering. Mixing the two creates confusion and signals to the appellate authority that the practitioner has not understood which regime applies.
2. Adopt the New Terminology for New Cases: If the SCN or notice is issued on or after 1 April 2026, the new Act applies. Quote Section 281 for the procedure, Section 280 for the notice, Section 282 for the time limit, and Section 284 for the sanction. The case law under the old regime remains persuasive but is no longer directly applicable: where Section 281 has been redrafted with identical substance, the old case law travels; where the drafting has diverged, the appellate authority will read the new statute first.
3. Limitation Arithmetic Remains Unforgiving: The limitation arithmetic is unforgiving. Section 536(2)(c) preserves the old framework for pending proceedings, but it does not extend the old limitation period. A Section 148 notice that needed to be issued by 31 March 2026 cannot now be issued under cover of Section 280 simply because the new Act has come into force. The clock that started running under the old Act keeps running under the old Act.

A Practitioner's Note: One Pending 148A SCN, Sanitised

Our firm represents a registered charitable institution operating across multiple states. In early 2026, before the new Act came into force, the assessing authority issued a show-cause notice under Section 148A(b) of the 1961 Act for AY 2022-23. The information cited was a mixture of inter-institutional financial flows and third-party data, with the suggestion that a substantial sum had escaped assessment.

The reply we prepared focused on four points:

1. Nature of Information: That the information shared with the SCN did not, on its own terms, indicate income chargeable to tax escaping assessment - much of what was flagged was disclosed receipts already reflected in the audited financials.

2. Incomplete Disclosure: That the supporting material accompanying the SCN was incomplete in places and unclear in others, and that the assessee was entitled, before being asked to respond, to a fuller disclosure under Section 148A(1).

3. Inadequate Time: That the time within which the response was sought was inadequate given the volume and complexity of the underlying records, and we sought an extension supported by a contemporaneous list of the records being collated.

4. Prior Acceptance: That several of the entries flagged related to transactions that had been examined and accepted in earlier assessment proceedings, so that any reopening would require explicit reasons distinguishing the present examination from the earlier acceptance.

The proceeding remains under the 1961 Act by operation of Section 536(2)(c) of the new Act, because the SCN was issued before 1 April 2026. The order under Section 148A(3), when it issues, will be passed under the old Act, and any subsequent notice will be a Section 148 notice - not a Section 280 notice. The reply and any subsequent challenge will therefore be framed in 1961-Act language. The transition does not migrate the proceeding.

The lessons we take from this for the practitioner: read the information shared with the SCN against the audited financials line by line; do not concede that disclosed receipts can constitute escaped income; ask for the material the SCN should have enclosed; and write a request for time on the file even if you intend to file a substantive reply within the original window. These habits transfer one-to-one from old Section 148A to new Section 281.

(Case study presented in sanitised form for educational purposes only. All identifying details - including the name of the institution, its location, the demand quantum, the assessing officer designations, and date specifics - have been modified or omitted. The procedural lessons drawn are general in nature and do not refer to any specific live proceeding.)

9. What to Do When a Section 281 SCN Lands on Your Desk

Reduced to a checklist, the practitioner's response to a Section 281 show-cause notice - or a Section 148A(b) SCN under the old Act, for which the substance is identical - has nine moves. Each one is independently important; together they form the spine of any defensible reply.

1. Read the SCN against the calendar. Identify the tax year, the date of issue, the threshold of escaped income alleged, and the limitation period under Section 282 (or under old Section 149, if the SCN is dated before 1 April 2026).
2. Confirm which Act applies. SCN issued before 1 April 2026 - Section 536(2)(c) preserves the 1961 Act. SCN issued on or after 1 April 2026 - the new Act applies. This decision sets the entire drafting language of the reply.
3. Demand the information. The SCN must disclose, in full, the information on which the AO proposes to act. If the disclosure is partial or impressionistic, write a contemporaneous letter seeking the complete information before submitting any substantive reply.
4. Read the information against the books. Almost every successful 148A defence pivots on the comparison: what the AO claims has escaped, against what the assessee actually disclosed. Walk this comparison line by line.
5. Test the threshold. Is the alleged escaped income genuinely fifty lakh rupees or more, in the form prescribed (asset, expenditure, entry)? If the alleged escaped income is below the threshold and the SCN is in the four-year-or-beyond window, the SCN is barred.
6. Look for the prior-acceptance angle. If the transactions or entries flagged were examined in earlier assessments and accepted, raise this as a discrete ground. Reopening already-examined material requires a higher threshold.
7. Ask for time if you need it. Document the request in writing. An adequate opportunity to respond is part of the statutory right; do not abandon it by silence.
8. Frame the reply for the order, not for the AO. The Section 281(3) order will be reviewed by the appellate authority. Write the reply knowing it will be quoted back to you in the order.
9. Preserve the appellate ground. Even if the order goes against the assessee, the reply should have laid the foundation for every ground that will travel to the Commissioner (Appeals) and onward.

This checklist is not exhaustive. Specific cases call for specific moves - a writ petition where a jurisdictional defect is clear, a stay application where the demand is large and pre-deposit is contested, an early-hearing motion where the limitation period is about to lapse. But the nine moves above are the baseline. Skip them at the reply stage and the appellate authority will notice.

10. The Full Mapping - Section by Section

The reassessment block is one piece of the larger renumbering between the 1961 Act and the 2025 Act. Practitioners who would like to look up other section pairs - Section 143, Section 144B, Section 263, Section 271, and the rest - can use the free section-by-section concordance maintained at itact2025.org . The site is a structured knowledge bank covering all 536 sections of the new Act, all 333 rules, and seventy-four circulars and instructions, with backlinks between the old and new section numbering. It is free, ad-free, and intended as a working reference for the profession during the transition.

The earlier companion article in CAclubindia, "Old Act, New Numbers," introduced the concordance at a high level. This article has dealt with one provision in depth. The remaining provisions - those that touch every assessment, audit, and appellate filing - will keep us occupied for the next eighteen months. A consistent grasp of which Act applies, which section governs, and which case law travels is now part of the practitioner's basic equipment.

The author is a Fellow Chartered Accountant (FCA, M.No. BB 037158) and Senior Partner at M/s SSAM & Co., Chartered Accountants, Pune. He maintains itact2025.org, a free section-by-section knowledge bank on the Income-tax Act, 2025. He writes regularly on tax litigation, the transition to the new Act, and the practical concerns of the practising profession.