My scrutiny assessment was still running when they searched me in November 2024. Section 158BA(2) says a pending assessment abates. Can I have the assessment order quashed in a writ on that ground alone?
Not on that ground alone. The Orissa High Court accepted that a search initiated on or after 1 September 2024 puts the case in the revived block assessment regime of Chapter XIV-B and that s.158BA(2) abates a pending assessment for any year in the block period, but it refused to quash the order because nothing on the record showed that the search had unearthed any undisclosed income of this petitioner, and it relegated him to his appeal.
Decided by the High Court (Harish Tandon CJ and Murahari Sri Raman J) on 2026-02-18, reported as W.P.(C) No. 30861 of 2025 (Orissa High Court, Cuttack). It bears on section 158BA, section 158B, section 158BC, section 132, section 132A, section 143(3), section 144B, section 153A of the Income Tax Act 1961, in Search, Survey & Block Assessment, Assessment & Scrutiny and How Tax Law Is Read matters.
This is the first High Court decision on the block assessment regime revived by the Finance (No. 2) Act 2024, and it is a Revenue-side outcome. There are now THREE search assessment regimes: block assessment under Chapter XIV-B for searches up to 31 May 2003; s.153A and s.153C for searches initiated between 1 June 2003 and 31 August 2024; and block assessment again under s.158BA to s.158BI for searches initiated on or after 1 September 2024. This search ran from 26 to 28 November 2024, so it is in the third regime, and anyone handed s.153A authority for a 2025 search is being pointed at a provision that no longer applies to him. The Court's own distinction is the point to carry away: s.153A let the Assessing Officer reassess "total income", while s.158BA(1) confines him to the "total undisclosed income of the block period" under Chapter XIV-B, so the Abhisar Buildwell reasoning cannot simply be lifted across. The practical limit of the decision is procedural rather than substantive: abatement under s.158BA(2) was not held to be discretionary, but the petitioner could not show on affidavit that HE was the person whose undisclosed income the search concerned, the Panchnama naming corporate entities, and a writ court will not resolve that on disputed facts.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner, an individual in the business of transportation of goods by road and trading in iron ore, filed his return for AY 2022-23 on 8 October 2022 declaring Rs 81,00,460. The case was picked up under CASS and faceless assessment under s.144B was intimated on 1 June 2023. A first assessment order dated 21 March 2024 raising a demand of Rs 7,79,86,085 was set aside by the same High Court in W.P.(C) No. 11561 of 2024 by order of 9 May 2024 for want of the personal hearing that had been asked for, and the matter was remitted. Fresh s.142(1) notices issued on 16 September 2024 and 4 October 2024 and the proceeding was still pending when a search under s.132 was commenced on 26 November 2024 and concluded on 28 November 2024. The Panchnama named corporate entities; the petitioner was an individual assessee. The Assessment Unit nevertheless carried on, issued reminders and show-cause notices between January and March 2025, and on 17 March 2025 passed an assessment order under s.143(3) read with s.260 and s.144B for AY 2022-23 with a demand of Rs 45,20,09,261, followed by penalty orders under s.270A, s.271A, s.271B and s.272A(1)(d). The petitioner moved the High Court contending that because the s.143 proceeding was pending on the date of the search, it stood abated by operation of s.158BA(2) and the Assessing Officer had no jurisdiction to complete it.
The writ petition was dismissed, with pending interlocutory applications disposed of and no order as to costs (para 10). The Court accepted that where a search is initiated on or after 1 September 2024 the Assessing Officer must proceed under Chapter XIV-B, that AY 2022-23 fell within the 'block period' as defined in s.158B, and that a pending assessment for a year in the block period abates by operation of law under s.158BA(2) (paras 7, 7.9, 7.10 and 7.11). It nevertheless declined relief because nothing on the record showed that the search of the petitioner in his individual status concerned his 'total undisclosed income' as Chapter XIV-B requires, no evidence connected the search of the companies named in the Panchnama with any undisclosed income of his for AY 2022-23, and the jurisdiction under Chapter XIV-B arises only on fulfilment of the conditions in that Chapter and on incriminating material being found (paras 9 and 9.1). Those being disputed questions of fact, the Court applied CIT v. Chhabil Dass Agarwal and refused to exercise its extraordinary jurisdiction (paras 9.2 and 9.3).
The Court read s.158BA(1) as commanding that where a search is initiated on or after 1 September 2024 the officer 'shall proceed to assess or reassess the total undisclosed income of the block period in accordance with the provisions of this Chapter', and s.158BA(2) as abating any assessment or reassessment under the rest of the Act pertaining to any assessment year falling in the block period that was pending on the date of initiation (para 7). Applying the s.158B definition, the previous year 2021-22 relevant to AY 2022-23 fell within the six assessment years preceding the previous year of search, so the pending s.143(3) proceeding was within the abating class (paras 7.9 to 7.11). Counsel had argued that s.158BA is revenue-neutral because an abated assessment revives if nothing incriminating is found, and pressed paras 33, 34 and 36 of PCIT v. Abhisar Buildwell Pvt Ltd on the footing that s.153A and s.158BA are identically worded (paras 8.1 to 8.3). The Court refused that equivalence. Recalling Union of India v. Arulmozhi Iniarasu on not applying precedent without matching the fact situation (para 8.4), it held that the two provisions 'operate in different fields': s.153A permits assessment of 'total income', s.158BA restricts the exercise to 'total undisclosed income' of the block period under Chapter XIV-B (paras 8.5 and 8.7). It then turned to the record. The s.144B intimation and the assessment order showed an ordinary CASS scrutiny of an individual return (paras 8.8 and 8.9); the Panchnama named companies; and nothing linked the search to any undisclosed income of the petitioner (paras 9 and 9.1). On that state of the record the Court would not quash an assessment order in writ jurisdiction on the strength of s.158BA(2) 'simpliciter' (para 9.3).
It is only on fulfilment of conditions laid in the provisions contained in Chapter XIV-B that the Assessing Officer gets clothed with the jurisdiction to proceed to make assessment of total undisclosed income for the block period if any incriminating material is found.
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Handle my notice → Ask a CA on WhatsAppNot on that ground alone. The Orissa High Court accepted that a search initiated on or after 1 September 2024 puts the case in the revived block assessment regime of Chapter XIV-B and that s.158BA(2) abates a pending assessment for any year in the block period, but it refused to quash the order because nothing on the record showed that the search had unearthed any undisclosed income of this petitioner, and it relegated him to his appeal. This was decided by the High Court (Harish Tandon CJ and Murahari Sri Raman J) and bears on section 158BA, section 158B, section 158BC, section 132, section 132A, section 143(3), section 144B, section 153A of the Income Tax Act 1961. It is reported as W.P.(C) No. 30861 of 2025 (Orissa High Court, Cuttack). This is the first High Court decision on the block assessment regime revived by the Finance (No. 2) Act 2024, and it is a Revenue-side outcome. There are now THREE search assessment regimes: block assessment under Chapter XIV-B for searches up to 31 May 2003; s.153A and s.153C for searches initiated between 1 June 2003 and 31 August 2024; and block assessment again under s.158BA to s.158BI for searches initiated on or after 1 September 2024. This search ran from 26 to 28 November 2024, so it is in the third regime, and anyone handed s.153A authority for a 2025 search is being pointed at a provision that no longer applies to him. The Court's own distinction is the point to carry away: s.153A let the Assessing Officer reassess "total income", while s.158BA(1) confines him to the "total undisclosed income of the block period" under Chapter XIV-B, so the Abhisar Buildwell reasoning cannot simply be lifted across. The practical limit of the decision is procedural rather than substantive: abatement under s.158BA(2) was not held to be discretionary, but the petitioner could not show on affidavit that HE was the person whose undisclosed income the search concerned, the Panchnama naming corporate entities, and a writ court will not resolve that on disputed facts. If it applies to you, the first step is this: Fix the date on which the search was initiated before you cite a single authority. On or after 1 September 2024 means Chapter XIV-B (s.158BA to s.158BI); 1 April 2021 to 31 August 2024 means ss.147 to 151 as they stood before the Finance (No. 2) Act 2024, by force of s.152(3); 1 June 2003 to 31 March 2021 means s.153A/s.153C; before 1 June 2003 means the old Chapter XIV-B.
The petitioner, an individual in the business of transportation of goods by road and trading in iron ore, filed his return for AY 2022-23 on 8 October 2022 declaring Rs 81,00,460. The case was picked up under CASS and faceless assessment under s.144B was intimated on 1 June 2023. A first assessment order dated 21 March 2024 raising a demand of Rs 7,79,86,085 was set aside by the same High Court in W.P.(C) No. 11561 of 2024 by order of 9 May 2024 for want of the personal hearing that had been asked for, and the matter was remitted. Fresh s.142(1) notices issued on 16 September 2024 and 4 October 2024 and the proceeding was still pending when a search under s.132 was commenced on 26 November 2024 and concluded on 28 November 2024. The Panchnama named corporate entities; the petitioner was an individual assessee. The Assessment Unit nevertheless carried on, issued reminders and show-cause notices between January and March 2025, and on 17 March 2025 passed an assessment order under s.143(3) read with s.260 and s.144B for AY 2022-23 with a demand of Rs 45,20,09,261, followed by penalty orders under s.270A, s.271A, s.271B and s.272A(1)(d). The petitioner moved the High Court contending that because the s.143 proceeding was pending on the date of the search, it stood abated by operation of s.158BA(2) and the Assessing Officer had no jurisdiction to complete it. The matter was decided on 2026-02-18 by the High Court (Harish Tandon CJ and Murahari Sri Raman J). On those facts the High Court held as follows. The writ petition was dismissed, with pending interlocutory applications disposed of and no order as to costs (para 10). The Court accepted that where a search is initiated on or after 1 September 2024 the Assessing Officer must proceed under Chapter XIV-B, that AY 2022-23 fell within the 'block period' as defined in s.158B, and that a pending assessment for a year in the block period abates by operation of law under s.158BA(2) (paras 7, 7.9, 7.10 and 7.11). It nevertheless declined relief because nothing on the record showed that the search of the petitioner in his individual status concerned his 'total undisclosed income' as Chapter XIV-B requires, no evidence connected the search of the companies named in the Panchnama with any undisclosed income of his for AY 2022-23, and the jurisdiction under Chapter XIV-B arises only on fulfilment of the conditions in that Chapter and on incriminating material being found (paras 9 and 9.1). Those being disputed questions of fact, the Court applied CIT v. Chhabil Dass Agarwal and refused to exercise its extraordinary jurisdiction (paras 9.2 and 9.3).
The Court read s.158BA(1) as commanding that where a search is initiated on or after 1 September 2024 the officer 'shall proceed to assess or reassess the total undisclosed income of the block period in accordance with the provisions of this Chapter', and s.158BA(2) as abating any assessment or reassessment under the rest of the Act pertaining to any assessment year falling in the block period that was pending on the date of initiation (para 7). Applying the s.158B definition, the previous year 2021-22 relevant to AY 2022-23 fell within the six assessment years preceding the previous year of search, so the pending s.143(3) proceeding was within the abating class (paras 7.9 to 7.11). Counsel had argued that s.158BA is revenue-neutral because an abated assessment revives if nothing incriminating is found, and pressed paras 33, 34 and 36 of PCIT v. Abhisar Buildwell Pvt Ltd on the footing that s.153A and s.158BA are identically worded (paras 8.1 to 8.3). The Court refused that equivalence. Recalling Union of India v. Arulmozhi Iniarasu on not applying precedent without matching the fact situation (para 8.4), it held that the two provisions 'operate in different fields': s.153A permits assessment of 'total income', s.158BA restricts the exercise to 'total undisclosed income' of the block period under Chapter XIV-B (paras 8.5 and 8.7). It then turned to the record. The s.144B intimation and the assessment order showed an ordinary CASS scrutiny of an individual return (paras 8.8 and 8.9); the Panchnama named companies; and nothing linked the search to any undisclosed income of the petitioner (paras 9 and 9.1). On that state of the record the Court would not quash an assessment order in writ jurisdiction on the strength of s.158BA(2) 'simpliciter' (para 9.3). In the words reproduced by the source cited on this page: "It is only on fulfilment of conditions laid in the provisions contained in Chapter XIV-B that the Assessing Officer gets clothed with the jurisdiction to proceed to make assessment of total undisclosed income for the block period if any incriminating material is found." The decision followed or applied Commissioner of Income Tax v. Chhabil Dass Agarwal, (2014) 1 SCC 603 — applied, to decline writ jurisdiction where an alternative remedy exists; Union of India v. Arulmozhi Iniarasu, (2011) 7 SCC 397 — applied, on not reading a precedent out of its fact situation; Principal Commissioner of Income Tax v. Abhisar Buildwell Private Limited, (2024) 2 SCC 433 — pressed by the assessee and held not to govern s.158BA, the two provisions operating in different fields.
It was decided by the High Court on 2026-02-18 and is reported as W.P.(C) No. 30861 of 2025 (Orissa High Court, Cuttack). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 158BA, section 158B, section 158BC, section 132, section 132A, section 143(3), section 144B, section 153A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The writ petition was dismissed, with pending interlocutory applications disposed of and no order as to costs (para 10). The Court accepted that where a search is initiated on or after 1 September 2024 the Assessing Officer must proceed under Chapter XIV-B, that AY 2022-23 fell within the 'block period' as defined in s.158B, and that a pending assessment for a year in the block period abates by operation of law under s.158BA(2) (paras 7, 7.9, 7.10 and 7.11). It nevertheless declined relief because nothing on the record showed that the search of the petitioner in his individual status concerned his 'total undisclosed income' as Chapter XIV-B requires, no evidence connected the search of the companies named in the Panchnama with any undisclosed income of his for AY 2022-23, and the jurisdiction under Chapter XIV-B arises only on fulfilment of the conditions in that Chapter and on incriminating material being found (paras 9 and 9.1). Those being disputed questions of fact, the Court applied CIT v. Chhabil Dass Agarwal and refused to exercise its extraordinary jurisdiction (paras 9.2 and 9.3). It arises in Search, Survey & Block Assessment, Assessment & Scrutiny and How Tax Law Is Read matters, on section 158BA, section 158B, section 158BC, section 132, section 132A, section 143(3), section 144B, section 153A of the Income Tax Act 1961, and was decided by Harish Tandon CJ and Murahari Sri Raman J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Compute the block period from s.158B(a): the previous years relevant to the six assessment years preceding the previous year in which the search was initiated, PLUS the part-period from 1 April of the previous year of search to the date of execution of the last of the authorisations. If you are pleading abatement under s.158BA(2), put the Panchnama, the warrant of authorisation and the satisfaction material on record and show that YOU are the person searched and that the search bore on your undisclosed income. Sahoo failed on exactly that gap. Do not go to the writ court on abatement where the facts are contested. Take the point in appeal instead; the Orissa High Court applied CIT v. Chhabil Dass Agarwal and declined jurisdiction. Check the block assessment machinery before advising: notice under s.158BC(1)(a) with not more than sixty days to file; the return in Form ITR-B under rule 12AE (inserted by the IT (Tenth Amendment) Rules 2025, with retrospective effect from 1 September 2024); no revised return; no s.143(1) processing; s.144C and the DRP expressly excluded by the proviso to s.158BC(1)(c); and prior approval of the Additional or Joint Commissioner or Director under s.158BC(3) BEFORE the notice issues. Price the exposure early: tax at sixty per cent under s.113 plus surcharge, interest at one and one-half per cent per month under s.158BFA(1) if the block return is late, and penalty under s.158BFA(2) of fifty per cent of the tax on the undisclosed income determined — with a complete immunity under the first proviso if the block return is filed, the tax on it paid, proof of payment enclosed and no appeal filed against that part of the income. Diarise the limitation under s.158BE: twelve months from the end of the quarter in which the last authorisation was executed (the word 'month' was substituted by 'quarter' by Act 7 of 2025 with retrospective effect from 1 September 2024), extended by twelve months on a s.92CA reference, with the handover exclusion of up to 180 days in s.158BE(2).
Searched for later treatment; none was found. That is not the same as a source affirming it. Two searches, nothing found. The citedby search on the doc id is empty. A search combining the petitioner's name with '158BA' returns exactly one result, this judgment. No later decision has adopted, doubted or distinguished it, and no special leave petition, review or later consideration was traced. It appears to remain the first High Court decision on the block assessment regime revived by the Finance (No. 2) Act 2024 for searches initiated on or after 1 September 2024, and nothing has yet tested the acceptance that s.158BA(2) abates a pending assessment for a year in the block period. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read twice, and the second read reversed the first. The summarising layer over the indiankanoon copy twice reported this judgment as one in which the writ petition was ALLOWED and the assessment order quashed for want of jurisdiction. It was not. The judgment as printed dismisses the writ petition (para 10: 'the writ petition stands dismissed'). The full text of paras 9 to 10 was obtained from the PDF and is the basis of the holding recorded here. A later pass must not take the indiankanoon rendering of this case at face value. The PDF renders curly quotation marks as the glyphs (denoted by two dashes) and (denoted by two bars); quoted words have been rendered here with ordinary quotation marks and nothing else changed. Paragraph numbering in the judgment is of the form 1.1, 2.4, 7.10, 8.7, 9.1. The department serves the pre-2024 block-assessment text of s.158BE at /w/section-158be-28 and of s.158BFA at /w/section-158bfa-30 and /w/section-158bfa-1. The current text is at /w/section-158be-30 and /w/section-158bfa-28, whose footnotes record Act 7 of 2025 w.r.e.f. 1 September 2024. The s.158BE limitation stated in what_to_do runs from the end of the QUARTER in which the last authorisation was executed; footnote 47 on /w/section-158be-30 records the substitution of 'quarter' for 'month' by Act 7 of 2025 with retrospective effect from 1 September 2024. The source_url remains the LiveLaw PDF: the indiankanoon copy (doc 178064134) is truncated at para 8.27 and never reaches paras 9 to 10, which is why the summarising layer twice reported the disposal backwards. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The writ petition was dismissed, with pending interlocutory applications disposed of and no order as to costs (para 10). The Court accepted that where a search is initiated on or after 1 September 2024 the Assessing Officer must proceed under Chapter XIV-B, that AY 2022-23 fell within the 'block period' as defined in s.158B, and that a pending assessment for a year in the block period abates by operation of law under s.158BA(2) (paras 7, 7.9, 7.10 and 7.11). It nevertheless declined relief because nothing on the record showed that the search of the petitioner in his individual status concerned his 'total undisclosed income' as Chapter XIV-B requires, no evidence connected the search of the companies named in the Panchnama with any undisclosed income of his for AY 2022-23, and the jurisdiction under Chapter XIV-B arises only on fulfilment of the conditions in that Chapter and on incriminating material being found (paras 9 and 9.1). Those being disputed questions of fact, the Court applied CIT v. Chhabil Dass Agarwal and refused to exercise its extraordinary jurisdiction (paras 9.2 and 9.3).
TaxSphere, “Saroj Kumar Sahoo v National Faceless Assessment Centre”, https://taxnotice.vittsphere.com/caselaw/case/saroj-kumar-sahoo-158ba-abatement-new-block-regime/ (validity last checked 2026-09-08)
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A search was carried out at my client's premises in March 2025 and the notice quotes section 158BC. My whole file of authority is on section 153A. Which law actually applies to him?
The search on my client began on 12 February 2025 and the last panchnama is dated 9 April 2025. What exactly is the block period, and which date ends it?
A search took place in November 2024 while my client's scrutiny assessment for an earlier year was pending. What happens to that assessment, and what happens if the block assessment is later annulled?
Material seized in someone else's search has been passed to my client's Assessing Officer, who has issued a section 158BC notice. What is my client's block period, and from when does the department's time run?
