The block assessment adds amounts for which nothing was found in the search. Can I take the Abhisar Buildwell point that there must be incriminating material?
Not in the form in which that case decides it, because Abhisar Buildwell construes section 153A and section 158BB is worded differently. Section 158BB(1) makes the total undisclosed income of the block period the aggregate of only two things — what the assessee declares as undisclosed income in his section 158BC return, and what the Assessing Officer determines under section 158BB(2); and section 158BB(2) requires that determination to be made 'on the basis of evidence found as a result of search or survey or requisition of books of account or other documents and any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter'.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2024-09-01, reported as Income-tax Act 1961, s.158BB, substituted w.e.f. 1 September 2024 by s.49 of the Finance (No. 2) Act 2024 (Act No. 15 of 2024) and amended with retrospective effect from the same date. It bears on section 158BB, section 158BA, section 158BC, section 153A, section 153C, section 143(1), section 92CA, section 68, section 69, section 69A, section 69B, section 69C, section 32(2) of the Income Tax Act 1961, in Search, Survey & Block Assessment, Assessment & Scrutiny, Evidence & Burden of Proof and How Tax Law Is Read matters.
The material base is defined, but it is defined more widely than the section 153A case law would suggest. Three points decide real cases. First, 'evidence found as a result of search OR SURVEY or requisition' — a survey under section 133A is now an express source for the block computation, which it was not in the 1995 Chapter. Second, and much wider, the words 'any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter' let the officer bring in material that has nothing to do with the search at all, provided it is available to him or comes to his notice in the block proceedings. That is the opposite of the section 153A rule in Abhisar Buildwell, and the opposite of what the 1995 section 158BB said, which confined the computation to 'evidence found as a result of search ... and such other materials or information as are available with the Assessing Officer AND RELATABLE TO SUCH EVIDENCE'. The relatability limb is gone. Third, the protection now sits in section 158BB(1A) rather than in a requirement of incriminating material: income already determined under section 143(1), or assessed under sections 143, 144, 147, 153A, 153C, an earlier block order or a settlement order before the date of the search, and income already declared in a return under section 139 or in response to a notice under section 142(1) before that date, is NOT to be included in the total undisclosed income of the block period. That is what stops a completed assessment being reopened through the back door — not the incriminating-material rule. Losses and unabsorbed depreciation brought forward from before the block period cannot be set off against block undisclosed income, but are carried forward; and transfer-pricing income of the year of the last authorisation is carved out of the block and dealt with in the regular assessment.
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Not a case. Section 158BB(1) provides that the total undisclosed income referred to in section 158BA(1) of the block period shall be the aggregate of (a) undisclosed income declared in the return furnished under section 158BC and (b) undisclosed income determined by the Assessing Officer under sub-section (2). Sub-section (1A) excludes from the total undisclosed income of the block period: income determined under section 143(1) or assessed under sections 143, 144, 147, 153A or 153C or earlier under section 158BC(1)(c) or section 245D(4) prior to the date of initiation of the search or requisition; income declared in a return under section 139 or in response to a notice under section 142(1) prior to that date; income computed by the assessee from books maintained in the normal course for the year whose return was not yet due, for the period from 1 April of the year of search to the day before initiation, and for the period from initiation to the execution of the last authorisation, subject to a proviso allowing the Assessing Officer to recompute any part he considers undisclosed; and income referred to in section 115A(5), section 115G or section 194P(1). Sub-section (2) directs that the undisclosed income falling within the block period be computed in accordance with the provisions of the Act on the basis of evidence found as a result of search or survey or requisition and any other material or information available with the Assessing Officer or coming to his notice during the proceedings under the Chapter. Sub-section (3) carves out international and specified domestic transactions of the period from 1 April of the previous year in which the last authorisation was executed to the date of execution, which are to be dealt with in the assessment made under the other provisions of the Act. Sub-section (4) applies sections 68, 69, 69A, 69B and 69C and section 92CA to the block period, and treats a firm's income before deduction of remuneration to a non-working partner. Sub-section (5) charges the tax referred to in section 158BA(7) on the total undisclosed income determined under sub-section (1). Sub-section (7) bars set-off of brought-forward losses and unabsorbed depreciation of previous years prior to the block period against block undisclosed income, while preserving them for carry forward.
Statutory position — no holding is asserted; this entry reproduces statutory text. The total undisclosed income of the block period is the aggregate of what the assessee declares in his section 158BC return and what the Assessing Officer determines under section 158BB(2) on the basis of evidence found as a result of search, survey or requisition and any other material or information available to him or coming to his notice in the block proceedings. Income already assessed, or already returned, before the date of the search is excluded by section 158BB(1A) and does not enter the block figure.
Not a judicial route. The substituted section works by a different technique from both its predecessor and section 153A. The 1995 section 158BB(1) required the officer's material to be 'relatable to' evidence found in the search; that limb has not been carried into the substituted text, and section 158BB(2) instead admits 'any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter'. Section 153A, for its part, spoke of assessing or reassessing 'total income' and contained no material limb at all, which is why the Supreme Court in Abhisar Buildwell had to imply the incriminating-material requirement in order to prevent completed assessments being reopened without cause. Under the substituted Chapter that protective work is done expressly and differently, by the exclusions in section 158BB(1A), which keep already-assessed and already-returned income out of the block figure. The two techniques are not the same, and an argument built on the wording of section 153A does not transfer to section 158BB without an intermediate step.
The undisclosed income falling within the block period, shall be computed in accordance with the provisions of this Act, on the basis of evidence found as a result of search or survey or requisition of books of account or other documents and any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter.
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Handle my notice → Ask a CA on WhatsAppNot in the form in which that case decides it, because Abhisar Buildwell construes section 153A and section 158BB is worded differently. Section 158BB(1) makes the total undisclosed income of the block period the aggregate of only two things — what the assessee declares as undisclosed income in his section 158BC return, and what the Assessing Officer determines under section 158BB(2); and section 158BB(2) requires that determination to be made 'on the basis of evidence found as a result of search or survey or requisition of books of account or other documents and any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter'. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 158BB, section 158BA, section 158BC, section 153A, section 153C, section 143(1), section 92CA, section 68, section 69, section 69A, section 69B, section 69C, section 32(2) of the Income Tax Act 1961. It is reported as Income-tax Act 1961, s.158BB, substituted w.e.f. 1 September 2024 by s.49 of the Finance (No. 2) Act 2024 (Act No. 15 of 2024) and amended with retrospective effect from the same date. The material base is defined, but it is defined more widely than the section 153A case law would suggest. Three points decide real cases. First, 'evidence found as a result of search OR SURVEY or requisition' — a survey under section 133A is now an express source for the block computation, which it was not in the 1995 Chapter. Second, and much wider, the words 'any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter' let the officer bring in material that has nothing to do with the search at all, provided it is available to him or comes to his notice in the block proceedings. That is the opposite of the section 153A rule in Abhisar Buildwell, and the opposite of what the 1995 section 158BB said, which confined the computation to 'evidence found as a result of search ... and such other materials or information as are available with the Assessing Officer AND RELATABLE TO SUCH EVIDENCE'. The relatability limb is gone. Third, the protection now sits in section 158BB(1A) rather than in a requirement of incriminating material: income already determined under section 143(1), or assessed under sections 143, 144, 147, 153A, 153C, an earlier block order or a settlement order before the date of the search, and income already declared in a return under section 139 or in response to a notice under section 142(1) before that date, is NOT to be included in the total undisclosed income of the block period. That is what stops a completed assessment being reopened through the back door — not the incriminating-material rule. Losses and unabsorbed depreciation brought forward from before the block period cannot be set off against block undisclosed income, but are carried forward; and transfer-pricing income of the year of the last authorisation is carved out of the block and dealt with in the regular assessment. If it applies to you, the first step is this: Take each addition and ask which limb of section 158BB(1) it belongs to. Anything not declared by the assessee in his section 158BC return must be justified under section 158BB(2), and the assessment order should say what evidence, material or information it rests on.
Not a case. Section 158BB(1) provides that the total undisclosed income referred to in section 158BA(1) of the block period shall be the aggregate of (a) undisclosed income declared in the return furnished under section 158BC and (b) undisclosed income determined by the Assessing Officer under sub-section (2). Sub-section (1A) excludes from the total undisclosed income of the block period: income determined under section 143(1) or assessed under sections 143, 144, 147, 153A or 153C or earlier under section 158BC(1)(c) or section 245D(4) prior to the date of initiation of the search or requisition; income declared in a return under section 139 or in response to a notice under section 142(1) prior to that date; income computed by the assessee from books maintained in the normal course for the year whose return was not yet due, for the period from 1 April of the year of search to the day before initiation, and for the period from initiation to the execution of the last authorisation, subject to a proviso allowing the Assessing Officer to recompute any part he considers undisclosed; and income referred to in section 115A(5), section 115G or section 194P(1). Sub-section (2) directs that the undisclosed income falling within the block period be computed in accordance with the provisions of the Act on the basis of evidence found as a result of search or survey or requisition and any other material or information available with the Assessing Officer or coming to his notice during the proceedings under the Chapter. Sub-section (3) carves out international and specified domestic transactions of the period from 1 April of the previous year in which the last authorisation was executed to the date of execution, which are to be dealt with in the assessment made under the other provisions of the Act. Sub-section (4) applies sections 68, 69, 69A, 69B and 69C and section 92CA to the block period, and treats a firm's income before deduction of remuneration to a non-working partner. Sub-section (5) charges the tax referred to in section 158BA(7) on the total undisclosed income determined under sub-section (1). Sub-section (7) bars set-off of brought-forward losses and unabsorbed depreciation of previous years prior to the block period against block undisclosed income, while preserving them for carry forward. The matter was decided on 2024-09-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Statutory position — no holding is asserted; this entry reproduces statutory text. The total undisclosed income of the block period is the aggregate of what the assessee declares in his section 158BC return and what the Assessing Officer determines under section 158BB(2) on the basis of evidence found as a result of search, survey or requisition and any other material or information available to him or coming to his notice in the block proceedings. Income already assessed, or already returned, before the date of the search is excluded by section 158BB(1A) and does not enter the block figure.
Not a judicial route. The substituted section works by a different technique from both its predecessor and section 153A. The 1995 section 158BB(1) required the officer's material to be 'relatable to' evidence found in the search; that limb has not been carried into the substituted text, and section 158BB(2) instead admits 'any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter'. Section 153A, for its part, spoke of assessing or reassessing 'total income' and contained no material limb at all, which is why the Supreme Court in Abhisar Buildwell had to imply the incriminating-material requirement in order to prevent completed assessments being reopened without cause. Under the substituted Chapter that protective work is done expressly and differently, by the exclusions in section 158BB(1A), which keep already-assessed and already-returned income out of the block figure. The two techniques are not the same, and an argument built on the wording of section 153A does not transfer to section 158BB without an intermediate step. In the words reproduced by the source cited on this page: "The undisclosed income falling within the block period, shall be computed in accordance with the provisions of this Act, on the basis of evidence found as a result of search or survey or requisition of books of account or other documents and any other material or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter."
It was decided by the CBDT Circulars & Instructions on 2024-09-01 and is reported as Income-tax Act 1961, s.158BB, substituted w.e.f. 1 September 2024 by s.49 of the Finance (No. 2) Act 2024 (Act No. 15 of 2024) and amended with retrospective effect from the same date. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 158BB, section 158BA, section 158BC, section 153A, section 153C, section 143(1), section 92CA, section 68, section 69, section 69A, section 69B, section 69C, section 32(2), 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 cuts both ways and is cited by both sides. Statutory position — no holding is asserted; this entry reproduces statutory text. The total undisclosed income of the block period is the aggregate of what the assessee declares in his section 158BC return and what the Assessing Officer determines under section 158BB(2) on the basis of evidence found as a result of search, survey or requisition and any other material or information available to him or coming to his notice in the block proceedings. Income already assessed, or already returned, before the date of the search is excluded by section 158BB(1A) and does not enter the block figure. It arises in Search, Survey & Block Assessment, Assessment & Scrutiny, Evidence & Burden of Proof and How Tax Law Is Read matters, on section 158BB, section 158BA, section 158BC, section 153A, section 153C, section 143(1), section 92CA, section 68, section 69, section 69A, section 69B, section 69C, section 32(2) of the Income Tax Act 1961, and was decided by Not applicable — statutory text. 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. Run every year of the block through section 158BB(1A). Income already assessed or already returned before the date of the search is outside the block figure by force of the statute, and an addition that duplicates it is bad without more. Where the officer relies on material that was not found in the search, do not argue that he cannot — argue instead that it is not material or information that was available to him or came to his notice in the block proceedings, and that the addition is otherwise unsustainable on the merits. For the part period and for the previous year whose return was not yet due, check section 158BB(1A)(c): income the assessee has himself computed from books maintained in the normal course before the relevant date stays out of the block figure, subject only to the Assessing Officer's power under the proviso to recompute what he considers undisclosed. Check that brought-forward losses and unabsorbed depreciation from before the block period have not been set off against the block income — section 158BB(7) forbids it and preserves them for carry forward to the year after the block period ends. If the case has an international transaction or specified domestic transaction in the year of the last authorisation, insist that it is excluded from the block computation under section 158BB(3) and dealt with in the assessment made under the other provisions of the Act. Cite Abhisar Buildwell, if at all, as authority on section 153A and say so. It has not been applied to the substituted section 158BB by any decision this pass could find.
Still good law. In force from 1 September 2024 as amended. No decision applying the substituted section 158BB to an addition was located. The Orissa High Court in Saroj Kumar Sahoo reproduced the section in full and drew a distinction between section 153A ('total income') and section 158BA ('total undisclosed income') when considering whether the Abhisar Buildwell principle applied, but that judgment is already in this library and the point argued there was abatement, not the material base for the computation. Whether the incriminating-material requirement survives under the substituted Chapter has not, so far as this pass could find, been decided. 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.
Two textual oddities that a reader will notice and should not be alarmed by. (1) The section as printed on the current departmental page runs (1), (1A), (2), (3), (4), (5), (6) and (7), and sub-section (6) is printed on the page as '(6) [Omitted]'. A summarising read of the page will report the sub-section as missing; a forced character-for-character transcription of the run from sub-section (4) to the end of the section shows the omission marker. So there is no gap in the statute book and nothing unexplained: the sub-section was omitted. The page carries no footnote identifying the omitting enactment or its date, and I could not establish either. The Orissa High Court's reproduction of the Chapter in Saroj Kumar Sahoo simply passes from (5) to (7), which is what a court reproducing operative text would do. (2) Sub-sections (1A), (3) and (5) appear in the High Court's reproduction inside square brackets, indicating amendment after the original substitution; the departmental page for section 158BD carries a footnote 'Sub. by Act No. 7 of 2025, w.r.e.f. 1-9-2024', and the section 158BA page carries footnotes to both Act No. 7 of 2025 and 'Act No. 29 of 2025'. I could not verify which enactment Act No. 29 of 2025 is, and I have not attributed any wording to it. Note also that the Orissa High Court's reproduction of section 158BA(2) is a single unsplit sub-section, whereas the current departmental page (Year: 2026) prints it as clauses (a) and (b) with the footnote attributing the substitution to Act No. 29 of 2025 — so that split appears to post-date the judgment. This is a statutory entry and not a decision: 'bench' and 'favours' carry no case values, 'tier' is set to 'cbdt' because the library's fixed tier vocabulary has no value for a statutory entry and the source is the Income-tax Department's own section pages rather than a Board circular, and 'decided_on' is not a date of decision but the date the substituted Chapter XIV-B commences, 1 September 2024. 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.
Statutory position — no holding is asserted; this entry reproduces statutory text. The total undisclosed income of the block period is the aggregate of what the assessee declares in his section 158BC return and what the Assessing Officer determines under section 158BB(2) on the basis of evidence found as a result of search, survey or requisition and any other material or information available to him or coming to his notice in the block proceedings. Income already assessed, or already returned, before the date of the search is excluded by section 158BB(1A) and does not enter the block figure.
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