Section 288: other amendments

Situations covered, with their own time triggers

The Assessing Officer may carry out the following amendments, each subject to its own conditions and within the four-year period referred to in section 287(8), reckoned from the date shown, applying section 287's procedure so far as relevant:

• Partner's assessment amended where a partner's remuneration disallowed in the firm's hands under section 35(e) is later found not deductible - reckoned from the end of the financial year in which the subsequent firm order was passed.
• Member of an AOP/BOI's assessment amended where the member's share of the association's/body's income is later found not included, or incorrect, following the association's/body's assessment or its correction - reckoned similarly.
• Recomputation of a subsequent year's total income where a loss or depreciation carried forward and set off is recomputed following section 279 proceedings for an earlier year - reckoned from the end of the financial year in which the section 279 order was passed.
• Recomputation of a transferor company's income where capital gains on transfer of a capital asset become chargeable later (e.g. asset converted to stock-in-trade, or the parent/holding company ceases to hold the whole share capital of a subsidiary within eight years) - reckoned from the relevant trigger date.
• Amendment to exclude a capital gain from tax where the assessee acquires the new asset or deposits/invests the gain within the extended period under section 89 - reckoned from the end of the financial year the compensation was received.
• Amendment to allow a deduction under section 144 where income not earlier received/brought into India in convertible foreign exchange is subsequently so received or brought in - reckoned from the end of the financial year of such receipt.
• Amendment to give foreign tax credit where credit was earlier denied because the foreign tax payment was under dispute, and the dispute is later settled - subject to a six-month application window from settlement, with evidence and an undertaking against double claims.
• Amendment to recompute a capital gain on land/building using the stamp-duty value as later revised in appeal, revision or reference - reckoned from the end of the financial year the revising order was passed.
• Amendment to recompute a capital gain on compulsorily-acquired assets using the compensation as later reduced by a court, Tribunal or other authority - reckoned from the end of the financial year the reducing order was passed.
• Recomputation disallowing a section 152 (patent royalty) deduction where the Controller of Patents or a High Court later revokes the patent or excludes the assessee as patentee - reckoned from the end of the financial year of that order.
• Amendment to allow TDS credit in the correct tax year where income was returned in one year but tax was deducted and deposited in a later year - subject to an application within two years from the end of the tax year the tax was deducted.

Transfer pricing: giving effect to a Mutual Agreement Procedure / APA-type option

Where the arm's length price is determined under section 166(6) for a tax year, and the Transfer Pricing Officer declares that an option exercised by the assessee is valid under section 166(9) for the two consecutive tax years immediately following, the Assessing Officer must recompute the total income for those two years by amending the assessment order or intimation - in conformity with the arm's length price so determined, and taking into account any directions under section 275(5) - within three months from the end of the month the assessment for that tax year is completed.

Where the original assessment/intimation for those two years is not itself completed within that three-month window, the recomputation must instead be made within three months from the end of the month that original assessment/intimation is actually made.

Frequently asked questions