Block assessment
Section 158BC of the Income Tax Act, 1961 (‘Act’ for short) provides the procedure for block assessment. Section 158BC(1) of the Act provides that where any search has been initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then the Assessing Officer shall, in respect of search initiated, or books of account or other documents or any assets requisitioned, on or after the 01.09.2024, issue a notice to such person, requiring him to furnish within such period, not exceeding a period of 60 days, as may be specified in the notice, a return ITR-B and verified in the manner, as may be prescribed, setting forth his undisclosed income, for the block period.
The following are the features-
- such return shall be considered as if it was a return furnished under the provisions of section 139 and notice under sub-section (2) of section 143 shall thereafter be issued;
- such return furnished beyond the period allowed in the notice shall not be deemed to be a return under section 139;
- no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter XIV-B of the Act;
- a person who has furnished a return under this clause shall not be entitled to furnish a revised return;
- the time allowed for furnishing a return under this clause may be extended by a further period of 30 days, where-
- in respect of a previous year immediately preceding the previous year in which the search is initiated or requisition is made, the due date for furnishing the return has not expired prior to the date of initiation of such search or requisition;
- the assessee was liable for audit under section 44AB for such previous year;
- the accounts (maintained in normal course) of such previous year have not been audited on the date of issuance of such notice; and
- the assessee requests in writing for extension of time for furnishing such return to get such accounts audited.
ITR – B
The Central Board of Direct Taxes made an amendment to Income Tax Rules vide Notification No. 30/2025, dated 07.04.2025, which is called as Income Tax (Tenth Amendment) Rules, 2025 which came into effect from 01.09.2024 (retrospective effect). The amendment inserted a new Rule 12AE. The said Rule provides that the return of income required to be furnished by any person under Section 158BC(1)(a) relating to any search initiated under section 132 or requisition made under section 132A on or after the 01.09.2024 shall be in the Form ITR-B and be verified in the manner indicated therein.
ITR-B shall be filed electronically under digital signature by-
- person whose accounts are required to be audited under section 44AB of the Act;
- Company;
- Political party.
Any person other than the above may file this return either electronically under digital signature or transmitting the data electronically in the return under electronic verification code.
The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the return.
In a case where claim of credit of the tax payments is made against undisclosed income of the block period other than by way of self-assessment tax for the block period, claim of such credits and the allowability thereof shall be subject to the verification by and satisfaction of, the Assessing Officer.
The following are to be noted for this purpose-
- Six assessment years preceding the assessment year relevant to the previous year in which search was initiated under section 132 or any requisition was made under section 132A.
- Y0 is the period in the assessment year relevant to the previous year which will be from the 1st April of the year in which search/requisition initiated up to the date of execution of the last of the authorisations for search or requisition.
- Y0 is the complete assessment year relevant to the previous year starting from the 1st April of the year in which search/requisition is initiated and upto 31st March of that year.
- Y+1 is the period in the assessment year relevant to the previous year which will be from the 1st April of the year in which last of authorisations of search/requisition was executed and ending with the date of last of authorisations of search/requisition.
- For the purposes for filing details of the assessment year Y1 where the relevant previous year has ended and the due date for furnishing the return under section 139(1) for such year has not expired, where accounts are not audited (if they are required to be audited), provisional figures are required to be furnished based on the books of account maintained in normal course. This shall not be considered as a return under section 139(1) for the relevant assessment year. Further, this income is required to be included in the return of income furnished under section 139 for the relevant assessment year Section 158BB(1A)(c)(i).
- For the purposes for filing details of the assessment year Y0 (where Y0 is a complete year) where the relevant previous year has ended and the due date for furnishing the return under section 139(1) for such year has not expired, provisional figures are required to be furnished based on the books of account maintained in normal course. This shall not be considered as a return under section 139(1) for the relevant assessment year. Further, this income is required to be included in the return of income furnished under section 139 for the relevant assessment year. . Section 158BB(1A)(c)(i).
- In terms of the provisions of section 158BB(3), any undisclosed income in respect of any international transaction or specified domestic transaction pertaining to the part previous year comprising in the block period is required to be assessed under provisions other than the applicable provisions for block assessment.
ITR-B contains several parts to be filled by the assessee-
- Part A – General Information.
- Part B – Break up of income as per section 158BB(1A)(C)(iii) pertaining to the Assessment year Y0 (part year) or Y+1 (part year, if applicable).
- Part C - TI COMPUTATION OF UNDISCLOSED INCOME (To be filled where search/requisition is concluded in the same year in which it was initiated) or (To be filled in case where the date of execution of the last of the authorisations for search or requisition falls in a previous year subsequent to the year in which the search or requisition was initiated).
- Part D I - Head-wise break-up of the total undisclosed income for the block period declared in column [A] of Part C (Rs.).
- Part D II - Item-wise break-up of the total undisclosed income for the block period declared in Part D I.
- Part E – Tax Payable.
- Part F – Details of tax paid on undisclosed income of the block period.
- Part G – Tax payments which are not included in Part F for which credit is sought against undisclosed income.
- Part H – Tax payments which are not included in Part F for which credit is sought against undisclosed income which has not been claimed earlier.
- Verification.
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