s.152 — Rate, dropping a reopening, and which text applies
The three things section 152 does: fixes the rate on a reassessment, gives the assessee a right to have the reopening dropped, and decides which text of sections 147 to 151 applies.
Sub-sections (1) and (2) are long-standing. Sub-sections (3) and (4) were inserted with effect from 1 September 2024 by Act No. 15 of 2024, the Finance (No. 2) Act 2024, and they decide which text of sections 147 to 151 governs a given case. Verified on the Department's "2024 (No. 2)" edition, where footnote 31 reads "Ins. by the Act No. 15 of 2024, w.e.f. 1-9-2024" and the insertion bracket spans both sub-sections. One point of wording to note: the savings are expressed by reference to the commencement of the Finance (No. 2) Act 2024 rather than to 1 September 2024, the date from which the substituted sections took effect. This page reads the two as the same date, which is the reading in practice, but the point is not closed by the words of the section.
Income-tax Act, 1961
s.152
Income-tax Act, 2025
s.285
In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.
In short
Section 152 of the Income-tax Act, 1961 carries three unrelated rules. Sub-section (1) provides that in an assessment, reassessment or recomputation under section 147 the tax is chargeable at the rate or rates at which it would have been charged had the income not escaped assessment, so a reopening does not import the rates of the year of reassessment. What that settles is the year whose rates apply. What it does not settle, and what is fought, is which rate was applicable for that year where the rate itself was altered during it, which is where a charge under section 115BBE on a reopened year is contested, and whether surcharge and cess follow the same rule. Sub-section (2) gives the assessee a right that is rarely available: where an assessment is reopened he may, if he has not impugned any part of the original assessment order under sections 246 to 248 or under section 264, claim that the proceedings be dropped on showing that he was assessed on an amount not lower than that for which he would be rightly liable even if the escaped income were taken into account, subject to a proviso that he may not thereby reopen matters concluded under section 154, 155, 260, 262 or 263. Sub-sections (3) and (4) are the transitional provisions. By sub- section (3), where a search under section 132 or a requisition under section 132A or a survey under section 133A, other than one under section 133A(2A), took place on or after 1 April 2021 but before 1 September 2024, sections 147 to 151 apply as they stood immediately before the commencement of the Finance (No. 2) Act 2024. By sub-section (4), in any other case where a notice under section 148 was issued or an order under section 148A(d) was passed before 1 September 2024, the assessment is governed by sections 147 to 151 as they then stood. The counterpart in the Income-tax Act, 2025 is section 285, which keeps the rate rule and the dropping right but has no equivalent of sub-sections (3) and (4) of the 1961 section, those being transitional to that Act alone.
What the provision does
Fixes the rate on a reopened year, gives the assessee a route to have the reopening dropped without contesting the merits, and, since 1 September 2024, decides which text of sections 147 to 151 governs. It preserves the earlier text as a block rather than provision by provision, so the preserved sections 148, 149 and 151 travel together and a case cannot be run on the new section 149 with the old section 151. Nothing in section 147 itself changed in 2024, so for that section the choice is immaterial.
Threshold questions
- Does sub-section (3) apply, which asks only whether there was a search, requisition or qualifying survey in the window and not what came of it
- If not, does sub-section (4) apply, which requires either a section 148 notice issued or a section 148A(d) order passed before 1 September 2024
- Whether the case has only a clause (b) show-cause issued before 1 September 2024 and nothing further by that date, because that falls within the words of neither saving and the position is open
- Was the survey one under section 133A(2A), because sub-section (3) excludes it and the case then has to find its way into sub-section (4) or into the substituted text
- On the rate, has the officer applied the rates of the relevant assessment year rather than those in force when the reassessment was framed, and where the rate for that year was itself altered during it, which version has been applied
- Is sub-section (2) available, which it is not if any part of the original assessment order has been impugned in appeal or revision
In practice
The recurring disputes.
The case that falls between the two savings
Sub-section (4) is triggered by a notice issued or a section 148A(d) order passed before 1 September 2024. A non-search case in which only a clause (b) show-cause had gone out by that date is neither. The reading that follows from the words is that the substituted text governs, so the proceeding must be carried forward under the new sub- sections and the new section 149, and cannot be completed by an order under clause (d) of a repealed provision. The Revenue's position is that the proceeding was begun under the earlier text and continues under it. The point appears to be open, and which way it goes decides the limitation, the approval and the reply period together.
Whether the savings preserve the old text as a block
Both sub-sections speak of sections 147 to 151 applying as they stood, which on its face preserves the earlier text as a whole. Both sides take the point and they take it in opposite directions on different limbs. On limitation the assessee on a preserved-text search case wants the substituted section 149 and its five year and three month outer limb, and the Revenue wants the preserved ten year limb. On sanction the positions reverse, because the preserved section 151 requires the higher rank and the assessee wants it. The argument for picking and choosing is the ordinary one that a procedural provision applies as it stands at the time of the step taken; the answer is that the savings are not expressed by reference to the provision under which the proceeding began but to sections 147 to 151 as a block. The words favour the block reading, and a party who takes one text for limitation and the other for sanction will be met with them.
The rate for a year whose rate changed during it
Sub-section (1) directs that the tax be charged at the rate at which it would have been charged had the income not escaped assessment, which fixes the assessment year but says nothing about which version of a rate governs where the rate for that year was itself altered by an amending Act passed during the year. The live instance is the charge on unexplained credits, money, investments and expenditure under section 115BBE, whose rate was raised by an amending Act in the course of a financial year, so that the receipts, the return and the amendment do not fall in the same part of it. The assessee's point is that the charge must follow the rate applicable to the income when it arose, and that a rate brought in later in the year cannot be applied to earlier receipts by the backward route of a reassessment. The Revenue's answer is that the rate is an incident of the assessment year and not of the date of receipt, that the sub-section preserves the year and nothing else, and that a rate in force for the assessment year applies to all income of that year. The amending Act, the date it took effect and the decisions on it are deliberately not given here, not having been checked against a primary source for this page, and they have to be settled before the point is run. Where it is available it is worth more than most of the procedural arguments, because it changes the tax and not merely the forum.
The dropping right in sub-section (2)
It is an answer on quantum rather than on validity, and it is lost by impugning any part of the original assessment order in appeal or revision, which is why it is so seldom available. Where it is available it is worth running, because it ends the reopening without the assessee conceding that income escaped assessment. The claim is made to the Assessing Officer in the reopened proceeding itself, in writing and with the computation attached, and it has to be made before the reassessment is framed. The Revenue's answer is usually that the comparison the sub-section requires is not made out on the figures, which makes the computation the whole of the argument. If the claim is refused, the safe course is to carry the ground into the appeal against the reassessment order, with the computation already on the record by then. Whether the refusal is also appealable on its own is not closed: section 246A(1)(a) gives an appeal against an order of assessment or reassessment under section 147 rather than against a refusal to drop the proceeding, and section 152 provides for no appeal of its own, but a refusal recorded as a separate order may be argued to be appealable and the question has not been settled against a primary source for this page. Do not treat it as decided either way, and never let it displace the ground in the appeal that certainly lies.