Section 292 — Assessment of total undisclosed income as a result of search. Successor to s.158BA of the 1961 Act.
Section 292 is in Chapter XVI — Procedure for Assessment, which runs from section 268 to section 301.
Sub-section (1) overrides the rest of the Act: where a search is initiated or a requisition made on or after the Act commences, the Assessing Officer must assess or reassess the total undisclosed income of the block period under this Part. Sub-section (2) abates ordinary assessment, reassessment and recomputation proceedings for any tax year in the block period that were pending on the date of the search or requisition, and also abates such proceedings for which a notice is issued between that date and the date of the order under section 294(1)(c), except for the year in which the last authorisation is executed. Sub-section (3) carries the abatement to a reference made under section 166(1) or an order under section 166(6). Sub-section (4) deals with a further search while a block assessment is pending — the pending assessment is completed first, the new one is made afterwards, and if less than three months remain the period is extended to three months from the end of the month in which the earlier assessment was completed. Sub-section (5) revives the abated proceedings from the date the Principal Commissioner or Commissioner receives an order annulling the block proceeding or assessment, with the revival ceasing if the annulment is itself set aside. Sub-section (6) keeps the ordinary income of the year of the last authorisation to be assessed separately, and sub-section (7) charges the total undisclosed income of the block period at the rate in section 192 irrespective of the years to which it relates.
It replaces year-by-year assessment with a single block assessment of undisclosed income after a search, and clears the field by abating whatever ordinary proceedings for those years were on foot. The revival rule in sub-section (5) makes sure that if the block assessment is annulled the abated proceedings are not simply lost.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Minimum time to make the assessment for a subsequent search | Three months | Where less than three months of the available period remain, the period is extended to three months from the end of the month in which the earlier pending assessment was completed | Sub-section (4)(c) |
| Rate on total undisclosed income of the block period | The rate specified in section 192 | Charged as income of the block period irrespective of the tax year or years to which the income relates | Sub-section (7) |
| Date from which abated proceedings revive | The date of receipt of the annulment order by the Principal Commissioner or Commissioner | Revival ceases if the annulment order is set aside | Sub-section (5)(a) and (b) |
Once a search or requisition happens, ordinary proceedings for the block period years stop by operation of law — you do not need an order to that effect, and a notice issued for such a year during the block window abates on the day it is issued. The undisclosed income of the whole block is taxed at the single section 192 rate rather than at the rates of the individual years, so the year the income belongs to no longer determines the rate. The one year kept out of the block machinery for ordinary income is the year in which the last authorisation is executed or requisition made — sub-section (6) has that income assessed separately in the normal way. If the block assessment is later annulled, the old proceedings come back to life from the date the Commissioner receives the annulment order.
A search is initiated on a person while a scrutiny assessment for one of the years falling in the block period is pending. Sub-section (2)(a) abates that pending proceeding on the date of initiation of the search, by operation of law and without any order being needed, and a notice issued for another block-period year before the order under section 294(1)(c) abates on the very day it is issued. What survives is a single block assessment of total undisclosed income, charged at the rate specified in section 192 as income of the block period — so if Rs. 6 crore of undisclosed income spans five years, the rates of those individual years no longer matter. Two things stay outside: the income other than undisclosed income of the year in which the last authorisation is executed is assessed separately under sub-section (6), and if the block assessment is annulled in appeal, the abated proceedings revive from the date the Principal Commissioner or Commissioner receives the annulment order — and cease to revive if that annulment is itself set aside.
In the block assessment order made under section 294(1)(c) following a search or requisition, and, before that, in the abrupt abatement of whatever assessment, reassessment or recomputation was already running for those years. The authorities named are the Assessing Officer, who makes the block assessment, and the Principal Commissioner or Commissioner, on whose receipt of an annulment order abated proceedings revive.
The total undisclosed income relating to the block period, as referred to in section 293(7) shall be charged to tax at the rate specified in section 192 as income of the block period, irrespective of the tax year or years to which such income relates.
See the full 1961 to 2025 concordance.