Section 290
Section 290: modification and revision of notice in certain cases
Section 290 deals with what happens to an income-tax demand when a company goes through insolvency proceedings and the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 reduces the amount owed - the Assessing Officer must issue a fresh, modified demand notice, and revise it again if the insolvency order itself is later changed on appeal.
Modified notice of demand
Where a notice of demand has earlier been issued under section 289 for any tax, interest, penalty, fine or other sum, and that sum is reduced as a result of an order of the Adjudicating Authority (as defined in section 5(1) of the Insolvency and Bankruptcy Code, 2016), the Assessing Officer must serve a modified notice of demand on the assessee specifying the sum payable, if any.
This modified notice is treated as a notice under section 289, and the provisions of the Act apply to it accordingly.
Revising the modified notice
If the Adjudicating Authority's order is subsequently modified by the National Company Law Appellate Tribunal or the Supreme Court, the modified notice of demand must itself be revised.
Frequently asked questions
What happens to an income-tax demand if the Adjudicating Authority under the IBC reduces it?
The Assessing Officer must serve a modified notice of demand specifying the reduced (or nil) sum payable, and this modified notice is treated as a fresh notice under section 289.
What if the insolvency order reducing the demand is later overturned on appeal?
Under Section 290(2), if the NCLAT or the Supreme Court modifies the Adjudicating Authority's order, the modified notice of demand must be revised again to reflect that.
Related sections
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Talk to our team about a demand notice affected by insolvency proceedingsLast updated 9 September 2026