Reassessment after the Finance Act 2021: From “Reason to Believe” to jurisdictional gates

The Finance Act, 2021 fundamentally redesigned India’s income-tax reassessment framework, replacing the belief-based “reason to believe” standard with an information- based model anchored in mandatory procedural preconditions. This paper examines whether these reforms have altered the discipline governing reassessment proceedings, combining doctrinal analysis with an empirical review of Income-tax Appellate Tribunal decisions from 2019 and 2025. The findings reveal a decisive shift: while reassessment was upheld in 20.6 percent of assessment years in 2019, that figure fell to 1.8 percent in 2025. More significantly, the grounds of invalidation have moved from substantive defects in the Assessing Officer’s reasoning to procedural failures under Sections 149, 151, and 151A, which together account for approximately 85.6 percent of post-2021 quashing grounds. The paper argues that this procedural turn reflects a conscious legislative move toward rule-bound administration, prioritising finality and taxpayer certainty over evaluative scrutiny of administrative judgment.

CITATION

Laveesh Bhandari & Prashant Narang & Aryan Pandey, 2026. “Reassessment after the Finance Act 2021: From “Reason to Believe” to jurisdictional gates,” Working Papers 21, Trustbridge Rule of Law Foundation.

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