My client has a section 158BC notice for a March 2025 search. How long has he got, what happens if he files late, and is there a section 153D approval to attack?
The notice must give a period not exceeding sixty days for the block return, and that period can be extended by a further thirty days only in the narrow audit case described in the fifth proviso. If the return goes in after the period allowed, the second proviso says in terms that it 'shall not be deemed to be a return under section 139' — so a late block return is non est, with consequences that run all the way to the notice under section 143(2). There is no section 153D approval in a block assessment; the approvals are elsewhere — section 158BC(3) requires the prior approval of the Additional or Joint Commissioner or Director BEFORE the section 158BC notice is issued, and section 158BG requires the previous approval of the same rank BEFORE the assessment order is passed.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2024-09-01, reported as Income-tax Act 1961, ss.158BC and 158BG, 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 158BC, section 158BG, section 158BB, section 143(1), section 143(2), section 144C, section 153D, section 132B, section 44AB, section 148 of the Income Tax Act 1961, in Search, Survey & Block Assessment, Assessment & Scrutiny, Appeals and How Tax Law Is Read matters.
This is where block assessments will be won and lost, and the points are new. The first proviso deems a block return filed in time to be a return under section 139 and provides that a notice under section 143(2) 'shall thereafter be issued', which puts Hotel Blue Moon on a statutory footing for the revived Chapter — but only for a return filed in time, because the second proviso strips a late return of that status. A revised block return is barred outright by the fourth proviso. Section 143(1) is expressly switched off by section 158BC(2), so there is no intimation and no processing. The dispute resolution panel is switched off too: the proviso to section 158BC(1)(c) provides that nothing in section 144C applies to a block assessment order, so a transfer-pricing addition in a block case goes straight to a final order with no draft order and no objections. On approvals, practitioners who have spent years on section 153D — Serajuddin, Shiv Kumar Nayyar, MDLR Hotels — must be careful: section 153D has no application to a block assessment under the revived Chapter. What it has instead is two distinct approvals at two distinct points, by an Additional or Joint Commissioner or Director, and each is a separate ground. The section 158BC(3) approval precedes the notice, so its absence goes to the initiation of the proceeding; the section 158BG approval precedes the order, so its absence goes to the order. Section 158BG also fixes the rank of the assessing officer: not below Deputy or Assistant Commissioner or Deputy or Assistant Director.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Not a case. Section 158BC(1)(a) requires the Assessing Officer, in respect of a search initiated or a requisition made on or after 1 September 2024, to issue a notice requiring the person to furnish, within such period not exceeding sixty days as may be specified in the notice, a return in the prescribed form and manner setting forth his undisclosed income for the block period. The first proviso deems that return to be a return furnished under section 139 and provides that a notice under section 143(2) shall thereafter be issued. The second proviso provides that a return furnished beyond the period allowed in the notice shall not be deemed to be a return under section 139. The third proviso dispenses with any notice under section 148. The fourth proviso bars a revised return. The fifth proviso permits a further period of thirty days where the previous year immediately preceding the year of search had a return not yet due at the date of the search, the assessee was liable to audit under section 44AB for that year, the accounts had not been audited when the notice issued, and the assessee asks in writing for time to get them audited. Clause (b) applies sections 142, 143(2) and (3), 144, 145, 145A and 145B to the determination of the total undisclosed income under section 158BB. Clause (c) requires an order of assessment or reassessment determining the tax payable, with a proviso that nothing in section 144C applies to such an order. Clause (d) applies section 132B to the assets seized or requisitioned. Section 158BC(2) excludes section 143(1). Section 158BC(3) requires the Assessing Officer, before issuing the notice under clause (a), to take the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director. Section 158BG requires the order of assessment for the block period to be passed by an Assessing Officer not below the rank of Deputy or Assistant Commissioner or Deputy or Assistant Director, and provides that no such order shall be passed without the previous approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director in respect of a search initiated or requisition made on or after 1 September 2024.
Statutory position — no holding is asserted; this entry reproduces statutory text. The section 158BC notice must allow a period not exceeding sixty days, extensible by thirty days only in the audit case described in the fifth proviso. A block return filed within the period allowed is deemed a return under section 139 and attracts a notice under section 143(2); one filed later is not deemed a return under section 139. No revised return may be furnished, section 143(1) does not apply, and section 144C does not apply to the block assessment order. Prior approval of an Additional or Joint Commissioner or Director is required before the notice is issued (section 158BC(3)) and before the order is passed (section 158BG).
Not a judicial route. The structure answers, by statute, the questions that the 1995 Chapter left to litigation. Whether a notice under section 143(2) had to be issued in a block case was decided in the assessee's favour by the Supreme Court in Hotel Blue Moon; the first proviso now says it in terms. Whether a belated block return was a valid return divided benches under the old Chapter, because that Chapter contained nothing on the subject; the second proviso now answers it against the assessee. The approval architecture is deliberately doubled: one approval at the point of initiation, when the question is whether a block proceeding should be started at all, and a second at the point of assessment, when the question is the content of the order. Because the Chapter provides its own approvals, section 153D — which is expressed to operate on orders under section 153A and section 153C — has no work to do here.
Provided further that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed in the notice shall not be deemed to be a return under section 139:
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Handle my notice → Ask a CA on WhatsAppThe notice must give a period not exceeding sixty days for the block return, and that period can be extended by a further thirty days only in the narrow audit case described in the fifth proviso. If the return goes in after the period allowed, the second proviso says in terms that it 'shall not be deemed to be a return under section 139' — so a late block return is non est, with consequences that run all the way to the notice under section 143(2). There is no section 153D approval in a block assessment; the approvals are elsewhere — section 158BC(3) requires the prior approval of the Additional or Joint Commissioner or Director BEFORE the section 158BC notice is issued, and section 158BG requires the previous approval of the same rank BEFORE the assessment order is passed. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 158BC, section 158BG, section 158BB, section 143(1), section 143(2), section 144C, section 153D, section 132B, section 44AB, section 148 of the Income Tax Act 1961. It is reported as Income-tax Act 1961, ss.158BC and 158BG, 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. This is where block assessments will be won and lost, and the points are new. The first proviso deems a block return filed in time to be a return under section 139 and provides that a notice under section 143(2) 'shall thereafter be issued', which puts Hotel Blue Moon on a statutory footing for the revived Chapter — but only for a return filed in time, because the second proviso strips a late return of that status. A revised block return is barred outright by the fourth proviso. Section 143(1) is expressly switched off by section 158BC(2), so there is no intimation and no processing. The dispute resolution panel is switched off too: the proviso to section 158BC(1)(c) provides that nothing in section 144C applies to a block assessment order, so a transfer-pricing addition in a block case goes straight to a final order with no draft order and no objections. On approvals, practitioners who have spent years on section 153D — Serajuddin, Shiv Kumar Nayyar, MDLR Hotels — must be careful: section 153D has no application to a block assessment under the revived Chapter. What it has instead is two distinct approvals at two distinct points, by an Additional or Joint Commissioner or Director, and each is a separate ground. The section 158BC(3) approval precedes the notice, so its absence goes to the initiation of the proceeding; the section 158BG approval precedes the order, so its absence goes to the order. Section 158BG also fixes the rank of the assessing officer: not below Deputy or Assistant Commissioner or Deputy or Assistant Director. If it applies to you, the first step is this: Diary the sixty-day period from the notice. If the client is liable to audit under section 44AB for the previous year immediately preceding the year of search, that year's return was not yet due when the search began, and the accounts were not audited when the notice issued, apply IN WRITING for the further thirty days under the fifth proviso before the original period expires.
Not a case. Section 158BC(1)(a) requires the Assessing Officer, in respect of a search initiated or a requisition made on or after 1 September 2024, to issue a notice requiring the person to furnish, within such period not exceeding sixty days as may be specified in the notice, a return in the prescribed form and manner setting forth his undisclosed income for the block period. The first proviso deems that return to be a return furnished under section 139 and provides that a notice under section 143(2) shall thereafter be issued. The second proviso provides that a return furnished beyond the period allowed in the notice shall not be deemed to be a return under section 139. The third proviso dispenses with any notice under section 148. The fourth proviso bars a revised return. The fifth proviso permits a further period of thirty days where the previous year immediately preceding the year of search had a return not yet due at the date of the search, the assessee was liable to audit under section 44AB for that year, the accounts had not been audited when the notice issued, and the assessee asks in writing for time to get them audited. Clause (b) applies sections 142, 143(2) and (3), 144, 145, 145A and 145B to the determination of the total undisclosed income under section 158BB. Clause (c) requires an order of assessment or reassessment determining the tax payable, with a proviso that nothing in section 144C applies to such an order. Clause (d) applies section 132B to the assets seized or requisitioned. Section 158BC(2) excludes section 143(1). Section 158BC(3) requires the Assessing Officer, before issuing the notice under clause (a), to take the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director. Section 158BG requires the order of assessment for the block period to be passed by an Assessing Officer not below the rank of Deputy or Assistant Commissioner or Deputy or Assistant Director, and provides that no such order shall be passed without the previous approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director in respect of a search initiated or requisition made on or after 1 September 2024. 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 section 158BC notice must allow a period not exceeding sixty days, extensible by thirty days only in the audit case described in the fifth proviso. A block return filed within the period allowed is deemed a return under section 139 and attracts a notice under section 143(2); one filed later is not deemed a return under section 139. No revised return may be furnished, section 143(1) does not apply, and section 144C does not apply to the block assessment order. Prior approval of an Additional or Joint Commissioner or Director is required before the notice is issued (section 158BC(3)) and before the order is passed (section 158BG).
Not a judicial route. The structure answers, by statute, the questions that the 1995 Chapter left to litigation. Whether a notice under section 143(2) had to be issued in a block case was decided in the assessee's favour by the Supreme Court in Hotel Blue Moon; the first proviso now says it in terms. Whether a belated block return was a valid return divided benches under the old Chapter, because that Chapter contained nothing on the subject; the second proviso now answers it against the assessee. The approval architecture is deliberately doubled: one approval at the point of initiation, when the question is whether a block proceeding should be started at all, and a second at the point of assessment, when the question is the content of the order. Because the Chapter provides its own approvals, section 153D — which is expressed to operate on orders under section 153A and section 153C — has no work to do here. In the words reproduced by the source cited on this page: "Provided further that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed in the notice shall not be deemed to be a return under section 139:"
It was decided by the CBDT Circulars & Instructions on 2024-09-01 and is reported as Income-tax Act 1961, ss.158BC and 158BG, 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 158BC, section 158BG, section 158BB, section 143(1), section 143(2), section 144C, section 153D, section 132B, section 44AB, section 148, 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 section 158BC notice must allow a period not exceeding sixty days, extensible by thirty days only in the audit case described in the fifth proviso. A block return filed within the period allowed is deemed a return under section 139 and attracts a notice under section 143(2); one filed later is not deemed a return under section 139. No revised return may be furnished, section 143(1) does not apply, and section 144C does not apply to the block assessment order. Prior approval of an Additional or Joint Commissioner or Director is required before the notice is issued (section 158BC(3)) and before the order is passed (section 158BG). It arises in Search, Survey & Block Assessment, Assessment & Scrutiny, Appeals and How Tax Law Is Read matters, on section 158BC, section 158BG, section 158BB, section 143(1), section 143(2), section 144C, section 153D, section 132B, section 44AB, section 148 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. File within the period allowed even if the figures are provisional. A late return is not deemed a return under section 139, there is no right to revise it, and the interest under section 158BFA(1) then runs to the date the assessment is completed rather than to the date of filing. Ask for the section 158BC(3) approval of the Additional or Joint Commissioner or Director taken before the notice was issued, and the section 158BG approval taken before the order was passed. Get both on the record under the Right to Information Act if they are not produced. Test each approval for application of mind on the same lines the section 153D cases developed — a single mechanical approval covering many draft orders, or an approval granted on the day the order was passed — but plead it as a section 158BC(3) or section 158BG ground, not as a section 153D ground. Check that the assessment order was passed by an officer of at least Deputy or Assistant Commissioner or Deputy or Assistant Director rank, as section 158BG requires. If a transfer pricing adjustment is proposed, do not wait for a draft order under section 144C — there will not be one. Make the objections to the Assessing Officer and preserve the point that section 158BB(3) takes the year-of-last-authorisation transactions out of the block altogether. Do not expect an intimation under section 143(1): section 158BC(2) excludes it. Any refund or adjustment has to be worked through the assessment order itself.
Still good law. In force from 1 September 2024 as amended. Section 158BG was read on two departmental pages of different vintage (Year 2024 (No. 2) and Year 2025) printing identical text; no Year-2026 page for that section was located. No decision on the substituted section 158BC was found; the two 2026 Tribunal orders that reproduce it were both deciding cases governed by the 1995 Chapter. I did not check whether any rule prescribing the form of the block return has been notified — the form is 'as may be prescribed' and the old Form 2B is not carried forward by anything I read. 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.
The current departmental page (Year: 2026) prints clause (a) as requiring the assessee to set forth 'his undisclosed income, for the block period'. Two Tribunal orders of 2026 that reproduce the section — Sonaj And Company (ITAT Pune, 6 May 2026) at its paragraph 12 and ACIT v Md. Illyas Hussain (ITAT Patna, 13 May 2026) at its paragraph 10 — reproduce it as 'his total income, including the undisclosed income, for the block period'. That is not a conflict: the departmental page for section 158BA carries footnotes recording that 'total income' was substituted by 'undisclosed income' by Act No. 7 of 2025 with retrospective effect from 1 September 2024, and section 113 carries a footnote to the same effect. The Tribunal orders are therefore reproducing the section as originally substituted in 2024 and the departmental page the section as it now stands. ITAT Pune's order in Sonaj And Company at its paragraph 12 also reproduces section 158BC(1)(c) with its two provisos, section 158BC(2) and section 158BC(3) in the terms set out here, and that reproduction is the second route on which the approval requirement in section 158BC(3) rests. ITAT Patna's order in ACIT v Md. Illyas Hussain reproduces, at its paragraph 10, only the opening words of sub-section (1) and clause (a) with its four provisos, ending at 'shall not be entitled to furnish a revised return'; it does not reach clause (c), sub-section (2) or sub-section (3), and nothing in this entry rests on it beyond the wording of clause (a). A further proviso to clause (c), aligning the block period in a section 158BD case with that of the searched person, appears in the 2024 text reproduced by ITAT Pune but not on the current departmental page; that provision now sits in the first proviso to section 158BD. I did not read the Finance (No. 2) Act 2024 or the Finance Act 2025 in the Gazette — a fetch of the Gazette PDF of the Finance (No. 2) Act 2024 truncated long before Chapter XIV-B. 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 section 158BC notice must allow a period not exceeding sixty days, extensible by thirty days only in the audit case described in the fifth proviso. A block return filed within the period allowed is deemed a return under section 139 and attracts a notice under section 143(2); one filed later is not deemed a return under section 139. No revised return may be furnished, section 143(1) does not apply, and section 144C does not apply to the block assessment order. Prior approval of an Additional or Joint Commissioner or Director is required before the notice is issued (section 158BC(3)) and before the order is passed (section 158BG).
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Is a notice under s.143(2) a jurisdictional precondition, or merely a procedural step the Assessing Officer can skip?
My return was only processed under 143(1). Does that stop the department reopening it later?
Has the Supreme Court settled whether the s.144C nine-month DRP process runs over and above the s.153 limitation?
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion?