Answer

1. F

   Facts

   The Income-tax Act 2025 applies from tax year 2026-27. Demands and assessments for FY 2025-26 and earlier years stay under the 1961 Act, so they cite old section numbers even if issued after 1 April 2026.

2. P

   Provisions and law

   • Sec 536, Income-tax Act 2025 (repeal and savings)Proceedings for years before 1 April 2026 continue under the Income-tax Act 1961.
   • Sec 156, Income-tax Act 1961 (now Sec 289)When tax, interest, penalty or other sum is payable after an order, the officer serves a notice of demand.
3. A

   Analysis

   So a demand for AY 2026-27 is correctly a Sec 156 demand (now Sec 289 of the 2025 Act). The time limits, interest and appeal rules are those of the 1961 Act. This is not an error and does not make the notice invalid. Demands for tax year 2026-27 onwards, raised from 2027, will cite the 2025 Act first.

4. C

   Conclusion

   1. 1Check the assessment year on the notice.
   2. 2For AY 2026-27 or earlier, expect 1961 Act sections.
   3. 3Apply the 1961 Act time limits for reply and appeal.
   4. 4Do not challenge the notice only for the old section number.

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