A search threw up unaccounted stock and cash and the Assessing Officer has added it. I have a large brought-forward loss and unabsorbed depreciation sitting there. Can I set them off against the addition?
For AY 2022-23 and every later year, no. Section 79A, inserted by the Finance Act 2022 (Act No. 6 of 2022) with effect from 1 April 2022, says that where, consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than s.133A(2A), the total income of any previous year includes undisclosed income, no set-off of any loss — brought forward or of the current year — and no set-off of unabsorbed depreciation under s.32(2) shall be allowed against that undisclosed income under any provision of the Act.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2022-04-01, reported as Inserted by the Finance Act, 2022 (Act No. 6 of 2022), with effect from 1 April 2022, that is Assessment Year 2022-23. It bears on section 79A, section 115BBE, section 115BBE(2), section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 32(2), section 132, section 132A, section 133A, section 70, section 71, section 72 of the Income Tax Act 1961, in Search, Survey & Block Assessment, Cash Credits & Unexplained Money and How Tax Law Is Read matters.
This is the provision that now fixes what a s.68 to s.69D addition actually costs, and it is wider in three ways than the s.115BBE(2) bar that practitioners already know. First, s.115BBE(2) switches off deductions and set-off only in computing income 'referred to in clause (a) and clause (b) of sub-section (1)' — that is, income referred to in ss.68, 69, 69A, 69B, 69C and 69D. Section 79A is not tied to those sections at all: it bites on 'undisclosed income' as defined in its own Explanation, which turns on whether the item was recorded in the books before the date of search, requisition or survey, or disclosed to the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner before that date — plus a false entry of expenditure limb in clause (ii). An addition made under s.28 or s.69B, or one the officer does not label at all, can still be undisclosed income for s.79A. Second, s.79A names unabsorbed depreciation under s.32(2) expressly, closing the argument that s.32(2) depreciation is not a 'loss'. Third, s.79A opens 'Notwithstanding anything contained in this Act', so ss.70, 71, 72, 73 and 74 all yield to it. The counterweight for open earlier years is that s.79A is prospective from AY 2022-23: the Madras High Court said so in M/s Sivasakthi Threads (23 January 2026), and for years before AY 2017-18 CBDT's own Circular No. 11/2019 accepts that even the s.115BBE(2) set-off bar did not operate. Note also that the survey carve-out is narrow — only s.133A(2A) surveys (the TDS/TCS verification survey) are outside s.79A.
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Not applicable — statutory text. Section 79A applies where, consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than under s.133A(2A), the total income of any previous year of an assessee includes any undisclosed income. The Explanation defines 'undisclosed income' as (i) any income of the previous year represented, wholly or partly, by money, bullion, jewellery or other valuable article or thing, or any entry in the books of account or other documents or transactions found in the course of such a search, requisition or survey, which has (A) not been recorded on or before the date of the search, requisition or survey in the books of account or other documents maintained in the normal course relating to that previous year, or (B) not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before that date; or (ii) any income of the previous year represented, wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the previous year which is found to be false and which would not have been found to be so had the search not been initiated or the survey not been conducted or the requisition not been made.
Statutory position — no holding is asserted; this entry reproduces statutory text. Section 79A provides that, notwithstanding anything contained in the Act, where consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than under s.133A(2A) the total income of any previous year of an assessee includes any undisclosed income, no set off against such undisclosed income of any loss, whether brought forward or otherwise, or of unabsorbed depreciation under s.32(2), shall be allowed to the assessee under any provision of the Act in computing his total income for that previous year. The section was inserted by the Finance Act 2022 with effect from 1 April 2022 and applies from Assessment Year 2022-23.
Not applicable — statutory text. The structure is worth setting out because it is what the argument turns on. The opening non obstante clause displaces every set-off provision in the Act, including ss.70, 71, 72, 73, 73A and 74 and the deemed-current-year fiction in s.32(2). The bar is limited in its object — it operates 'against such undisclosed income' — so it does not extinguish the loss or the unabsorbed depreciation, which remain available against the rest of the total income and, subject to the ordinary limits, remain available to be carried forward. The trigger is factual and dated: the Explanation asks whether the item was recorded in books maintained in the normal course, or disclosed to a named senior authority, on or before the date of the search, requisition or survey. Clause (ii) extends the definition to a false entry of expenditure found only because of the search, survey or requisition.
Notwithstanding anything contained in this Act, where consequent to a search under section 132 or a requisition under section 132A or a survey under section 133A other than under sub-section (2A) of that section, the total income of any previous year of an assessee includes any undisclosed income, no set off, against such undisclosed income, of any loss, whether brought forward or otherwise, or unabsorbed depreciation under sub-section (2) of section 32, shall be allowed to the assessee under any provision of this Act in computing his total income for such previous year.
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Handle my notice → Ask a CA on WhatsAppFor AY 2022-23 and every later year, no. Section 79A, inserted by the Finance Act 2022 (Act No. 6 of 2022) with effect from 1 April 2022, says that where, consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than s.133A(2A), the total income of any previous year includes undisclosed income, no set-off of any loss — brought forward or of the current year — and no set-off of unabsorbed depreciation under s.32(2) shall be allowed against that undisclosed income under any provision of the Act. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 79A, section 115BBE, section 115BBE(2), section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 32(2), section 132, section 132A, section 133A, section 70, section 71, section 72 of the Income Tax Act 1961. It is reported as Inserted by the Finance Act, 2022 (Act No. 6 of 2022), with effect from 1 April 2022, that is Assessment Year 2022-23. This is the provision that now fixes what a s.68 to s.69D addition actually costs, and it is wider in three ways than the s.115BBE(2) bar that practitioners already know. First, s.115BBE(2) switches off deductions and set-off only in computing income 'referred to in clause (a) and clause (b) of sub-section (1)' — that is, income referred to in ss.68, 69, 69A, 69B, 69C and 69D. Section 79A is not tied to those sections at all: it bites on 'undisclosed income' as defined in its own Explanation, which turns on whether the item was recorded in the books before the date of search, requisition or survey, or disclosed to the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner before that date — plus a false entry of expenditure limb in clause (ii). An addition made under s.28 or s.69B, or one the officer does not label at all, can still be undisclosed income for s.79A. Second, s.79A names unabsorbed depreciation under s.32(2) expressly, closing the argument that s.32(2) depreciation is not a 'loss'. Third, s.79A opens 'Notwithstanding anything contained in this Act', so ss.70, 71, 72, 73 and 74 all yield to it. The counterweight for open earlier years is that s.79A is prospective from AY 2022-23: the Madras High Court said so in M/s Sivasakthi Threads (23 January 2026), and for years before AY 2017-18 CBDT's own Circular No. 11/2019 accepts that even the s.115BBE(2) set-off bar did not operate. Note also that the survey carve-out is narrow — only s.133A(2A) surveys (the TDS/TCS verification survey) are outside s.79A. If it applies to you, the first step is this: Fix the assessment year first. For AY 2021-22 and earlier, s.79A does not exist and the argument runs on s.115BBE(2) and Circular No. 11/2019; for AY 2022-23 onwards s.79A applies on its own terms.
Not applicable — statutory text. Section 79A applies where, consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than under s.133A(2A), the total income of any previous year of an assessee includes any undisclosed income. The Explanation defines 'undisclosed income' as (i) any income of the previous year represented, wholly or partly, by money, bullion, jewellery or other valuable article or thing, or any entry in the books of account or other documents or transactions found in the course of such a search, requisition or survey, which has (A) not been recorded on or before the date of the search, requisition or survey in the books of account or other documents maintained in the normal course relating to that previous year, or (B) not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before that date; or (ii) any income of the previous year represented, wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the previous year which is found to be false and which would not have been found to be so had the search not been initiated or the survey not been conducted or the requisition not been made. The matter was decided on 2022-04-01 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. Section 79A provides that, notwithstanding anything contained in the Act, where consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than under s.133A(2A) the total income of any previous year of an assessee includes any undisclosed income, no set off against such undisclosed income of any loss, whether brought forward or otherwise, or of unabsorbed depreciation under s.32(2), shall be allowed to the assessee under any provision of the Act in computing his total income for that previous year. The section was inserted by the Finance Act 2022 with effect from 1 April 2022 and applies from Assessment Year 2022-23.
Not applicable — statutory text. The structure is worth setting out because it is what the argument turns on. The opening non obstante clause displaces every set-off provision in the Act, including ss.70, 71, 72, 73, 73A and 74 and the deemed-current-year fiction in s.32(2). The bar is limited in its object — it operates 'against such undisclosed income' — so it does not extinguish the loss or the unabsorbed depreciation, which remain available against the rest of the total income and, subject to the ordinary limits, remain available to be carried forward. The trigger is factual and dated: the Explanation asks whether the item was recorded in books maintained in the normal course, or disclosed to a named senior authority, on or before the date of the search, requisition or survey. Clause (ii) extends the definition to a false entry of expenditure found only because of the search, survey or requisition. In the words reproduced by the source cited on this page: "Notwithstanding anything contained in this Act, where consequent to a search under section 132 or a requisition under section 132A or a survey under section 133A other than under sub-section (2A) of that section, the total income of any previous year of an assessee includes any undisclosed income, no set off, against such undisclosed income, of any loss, whether brought forward or otherwise, or unabsorbed depreciation under sub-section (2) of section 32, shall be allowed to the assessee under any provision of this Act in computing his total income for such previous year."
It was decided by the CBDT Circulars & Instructions on 2022-04-01 and is reported as Inserted by the Finance Act, 2022 (Act No. 6 of 2022), with effect from 1 April 2022, that is Assessment Year 2022-23. 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 79A, section 115BBE, section 115BBE(2), section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 32(2), section 132, section 132A, section 133A, section 70, section 71, section 72, 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. Section 79A provides that, notwithstanding anything contained in the Act, where consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than under s.133A(2A) the total income of any previous year of an assessee includes any undisclosed income, no set off against such undisclosed income of any loss, whether brought forward or otherwise, or of unabsorbed depreciation under s.32(2), shall be allowed to the assessee under any provision of the Act in computing his total income for that previous year. The section was inserted by the Finance Act 2022 with effect from 1 April 2022 and applies from Assessment Year 2022-23. It arises in Search, Survey & Block Assessment, Cash Credits & Unexplained Money and How Tax Law Is Read matters, on section 79A, section 115BBE, section 115BBE(2), section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 32(2), section 132, section 132A, section 133A, section 70, section 71, section 72 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. Check whether the addition is 'undisclosed income' within the Explanation to s.79A, not merely whether the officer cited s.68 to s.69D. Ask: was the item recorded in books maintained in the normal course on or before the date of the search, requisition or survey, or disclosed to the PCCIT/CCIT/PCIT/CIT before that date? If it was recorded or disclosed, it is outside the definition and s.79A does not reach it. Identify which survey sub-section was invoked. A survey under s.133A(2A) is expressly excluded from s.79A; a survey under s.133A(1) or s.133A(2) is not. Separate the addition from the rest of the year's income in the computation. Section 79A bars set-off only 'against such undisclosed income'; losses and unabsorbed depreciation remain available against the balance of the total income. Where the addition is one the Assessing Officer has characterised as unaccounted business stock rather than as unexplained investment, argue the characterisation before arguing set-off — it decides both the s.115BBE rate and, for pre-2022 years, the availability of s.71 and s.72. Do not treat a decision allowing set-off against a search addition for a pre-2022 year as authority for a year from AY 2022-23 onwards; the label on such an authority should be 'superseded by amendment'.
Still good law. This is the amending law itself, not a decision about it. The text was verified on 8 September 2026 on five departmental pages for the section, the most recent stamped Year 2025, all carrying the correct heading and the single insertion footnote. No decided case APPLYING s.79A to deny a set-off was located. An Indian Kanoon phrase search on the section's own operative words, 'no set off, against such undisclosed income, of any loss', returned exactly two documents — the bare-Act page for s.79A and the Madras High Court judgment in M/s Sivasakthi Threads v. DCIT (23 January 2026), which mentions the section only to hold it prospective. Searches on the section heading and on the string 'section 79A of the Act' returned nil, but the Indian Kanoon phrase index is not a dependable substring match and alphanumeric section numbers are known to break it, so the absence of authority is NOT established. Later treatment of the section by any court has not been checked beyond those searches. 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.
This is a statutory entry, not a decided case. decided_on is the commencement date of s.79A — 1 April 2022, that is Assessment Year 2022-23 — and not the date of any decision. The text was read from five separate departmental pages for the same section, carrying Year stamps 2022, 2023, 2024 (No. 1), 2024 (No. 2) and 2025. All five print the identical operative text and the identical section heading 'No set off of losses consequent to search, requisition and survey'. The commencement footnote is present but not in identical words on every page: the page stamped Year 2022 prints '87a. Ins. by the Act No. 6 of 2022, w.e.f. 1-4-2022', the page stamped Year 2023 prints '48. Inserted by the Finance Act, 2022, w.e.f. 1-4-2022', and the page stamped Year 2025 that is used as source_url printed no footnote at all on re-fetch — so the commencement rests on the two earlier pages and not on the source page. The section has not been amended since insertion. On s.115BBE(2): the departmental pages stamped 2016 and 2017 print sub-section (2) as ending 'in computing his income referred to in clause (a) of sub-section (1)', whereas the pages stamped 2021 and 2024 (No. 2) — the latter at /w/section-115bbe-12, carrying the heading 'Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D' — print 'clause (a) and clause (b) of sub-section (1)', and the Madras High Court in Sivasakthi Threads reproduced the same wording at its para 21; the later wording is the current text. 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. Section 79A provides that, notwithstanding anything contained in the Act, where consequent to a search under s.132, a requisition under s.132A or a survey under s.133A other than under s.133A(2A) the total income of any previous year of an assessee includes any undisclosed income, no set off against such undisclosed income of any loss, whether brought forward or otherwise, or of unabsorbed depreciation under s.32(2), shall be allowed to the assessee under any provision of the Act in computing his total income for that previous year. The section was inserted by the Finance Act 2022 with effect from 1 April 2022 and applies from Assessment Year 2022-23.
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