Income Tax Law / Appeals and Revision

Section 267 of the Income-tax Act, 1961: Amendment of Assessment on Appeal

Section 267 provides a mechanism to revise the assessment of a member of an association of persons (AOP) or body of individuals (BOI) when an appellate decision changes the assessment of that association or body. The corresponding provision in the Income-tax Act, 2025 is Section 371.

Legislative position: The Income-tax Act, 2025 applies from 1 April 2026, subject to its transitional and saving provisions. Section 267 of the 1961 Act remains relevant to proceedings governed by the earlier law. The applicable law must be identified for the relevant tax year and proceeding.

Section 267: Statutory provision

Where as a result of an appeal under section 246 or section 246A or section 253, any change is made in the assessment of a body of individuals or an association of persons or a new assessment of a body of individuals or an association of persons is ordered to be made, the Joint Commissioner (Appeals) or the Commissioner (Appeals) or the Appellate Tribunal, as the case may be, shall pass an order authorising the Assessing Officer either to amend the assessment made on any member of the body or association or make a fresh assessment on any member of the body or association.

The provision above reflects the later inclusion of the Joint Commissioner (Appeals), effective from 1 April 2023, which was absent from the uploaded older text.

Meaning and scope of Section 267

The assessment of an AOP or BOI can affect the assessment of its individual members. If an appellate order alters the income or assessment of the AOP or BOI, the appellate authority can authorise consequential changes to members' assessments. This helps align members' assessments with the outcome of the appeal.

Key expressions

Association of persons (AOP): A grouping of persons treated as an assessable unit where the statutory requirements are satisfied.
Body of individuals (BOI): A body consisting of individuals that may be assessed as a distinct taxable unit under income-tax law.
Assessing Officer: The income-tax authority legally empowered to conduct or amend the relevant assessment.
Consequential assessment: An amendment or fresh assessment made to give effect to the appellate change affecting the AOP or BOI.

When Section 267 applies

An appeal is decided under Section 246, 246A or 253 of the 1961 Act, as applicable.
The appeal changes the assessment of an AOP or BOI, or directs a fresh assessment of it.
The appellate authority passes an order authorising the Assessing Officer to amend or freshly assess a member.
The Assessing Officer implements that authorisation in accordance with applicable procedural safeguards and other statutory provisions.

Illustrative example

Suppose an AOP's assessed income is reduced following an appeal. If the original assessment of a member was affected by the earlier AOP assessment, the appellate authority may authorise the Assessing Officer to make the corresponding change in that member's assessment. The precise tax treatment depends on the facts and other applicable provisions.

Corresponding provision: Section 371 of the Income-tax Act, 2025

Section 371 addresses amendment of assessments following appeals under Sections 356, 357 or 362 of the 2025 Act. Where the assessment of an AOP or BOI changes, or a fresh assessment is directed, the Joint Commissioner (Appeals), Commissioner (Appeals) or Appellate Tribunal may authorise the Assessing Officer to amend or freshly assess the member. The provision is a simplified successor to Section 267 of the 1961 Act.

Do not confuse Section 267 of the 2025 Act, which concerns tax on an updated return, with Section 267 of the 1961 Act, which concerns amendment of assessment on appeal.

Legislative history

Section 267 was substantially substituted by the Finance Act, 1992 with effect from 1 April 1993. Section 246A was subsequently incorporated by the Finance Act, 2000 with effect from 1 June 2000. The reference to the Deputy Commissioner (Appeals) was removed by the Finance (No. 2) Act, 1998 with effect from 1 October 1998. The Finance Act, 2023 inserted the Joint Commissioner (Appeals) with effect from 1 April 2023.

Official legislation and references

Frequently asked questions

Does Section 267 apply to every individual appeal?

No. It specifically concerns consequential amendments to members' assessments following a qualifying appeal affecting an AOP or BOI.

Who authorises the amendment?

The relevant appellate authority named in the provision passes an order authorising the Assessing Officer to amend or freshly assess a member.

What is the corresponding section under the Income-tax Act, 2025?

Section 371, not Section 267, of the 2025 Act.

This article provides general statutory information. Individual cases require examination of the applicable law, appeal order and assessment records.