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TMI BlogSubstitution of new Chapter for Chapter XIV-B.X X X X Extracts X X X X X X X X Extracts X X X X ..... le, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be incorrect, in respect of the block period. Explanation . For the purposes of this Chapter, the last of the authorisations shall be deemed to have been executed, (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. Assessment of total income as a result of search. 158BA. (1) Notwithstanding anything in any other provisions of this Act, where on or after the 1st day of September, 2024, a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A, in the case of any person, then, the Assessing Officer shall proceed to assess or reassess the total income of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions for a search is executed or a requisition is made, shall be assessed separately in accordance with the other provisions of this Act. (7) The total income relating to the block period shall be charged to tax, at the rate specified in section 113, as income of the block period irrespective of the previous year or years to which such income relates. Computation of total income of block period. 158BB. (1) The total income referred to in sub-section (1) of section 158BA of the block period shall be the aggregate of the following, namely: (i) total income disclosed in the return furnished under section 158BC; (ii) total income assessed under sub-section (3) of section 143 or section 144 or section 147 or section 153A or section 153C prior to the date of initiation of the search or the date of requisition, as the case may be; (iii) total income declared in the return of income filed under section 139 or in response to a notice under sub-section (1) of section 142 or section 148 and not covered under clause (i) or clause (ii); (iv) total income determined where the previous year has not ended, on the basis of entries relating to such income or transactions as recorded in the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to previous year in that section shall be construed as reference to the relevant previous year falling in the block period excluding the period referred to in sub-section (3). (5) The tax referred to in sub-section (7) of section 158BA shall be charged on the total income determined in the manner specified in sub-section (1) as reduced by the total income referred to in clause (ii), clause (iii) and clause (iv) of sub-section (1). (6) For the purposes of sub-section (1) and sub-section (5), if the disclosed income under clause (i) of sub-section (1) or where the income disclosed in respect of any previous year comprising the block period, or the returned income or assessed income under clause (ii) or clause (iii) of sub-section (1) or where the income as determined under clause (iv), is a loss, it shall be ignored. (7) For the purposes of assessment under this Chapter, losses brought forward from the previous year (prior to the first previous year comprising the block period) under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32 shall not be set off against the undisclosed income determined in the block assessment under this Chapter but may be carried forw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch assessment or reassessment shall be the same as that determined in respect of the person in whose case search was made under section 132, or whose books of account or other documents or any assets were requisitioned under section 132A, and proceedings under section 158BD were initiated due to such search or requisition, as the case may be; (d) the assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B. (2) The provisions of sub-section (1) of section 143 shall not apply to the return furnished under this section. (3) The Assessing Officer, before issuance of notice under clause (a) of sub-section (1), shall take prior approval of the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director, as the case may be. Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to or pertains to or relates to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 158BC in pursuance of section 158BD, was issued to such other person: Provided that in case where during the course of the proceedings for the assessment of undisclosed income of the block period in case of other person referred to in section 158BD, a reference under sub-section (1) of section 92CA is made, the period available for making an order of assessment in respect of the block period in case of such other person shall be extended by twelve months. (4) In computing the period of limitation under this section, the following period shall be excluded, (i) the period during which the assessment proceeding is stayed by an order or injunction of any court; or (ii) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less; or (iii) the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee to be re-heard under the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ending with the date on which the order rejecting the application is received by the Principal Commissioner or Commissioner under sub-section (3) of section 245R; or (x) the period commencing from the date on which an application is made before the Authority for Advance Rulings or before the Board for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Principal Commissioner or Commissioner under sub-section (7) of section 245R: Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-section (1) or sub-section (3) available to the Assessing Officer for making an order under clause (c) of sub-section (1) of section 158BC is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly: Provided further that where after extension of the period referred to in the first proviso, the period of limitation for making an order of assessment or reassessment, as the case may be, expires before the end of a month, such period shall be exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome shown in the return and in such cases the penalty shall be imposed on that portion of undisclosed income determined which is in excess of the amount of income shown in the return. (3) No order imposing a penalty under sub-section (2) shall be made, (a) unless an assessee has been given a reasonable opportunity of being heard; (b) by the Deputy Commissioner or Assistant Commissioner or the Deputy Director or Assistant Director, as the case may be, where the amount of penalty exceeds two lakh rupees except with the previous approval of the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director, as the case may be; (c) in a case where the assessment is the subject-matter of an appeal to the Commissioner (Appeals) under section 246A or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the financial year in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Principal Commissioner or Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts requisitioned under section 132A, on or after the 1st day of September, 2024 . Application of other provisions of this Act. 158BH. Save as otherwise provided in this Chapter, all other provisions of this Act shall apply to assessment made under this Chapter. Chapter not to apply in certain circumstances. 158BI. The provisions of this Chapter shall not apply where a search was initiated under section 132, or books of account, other documents or any assets were requisitioned under section 132A, before the 1st day of September, 2024, and proceedings in relation to such search or requisition, as the case may be, shall be governed by the other provisions of this Act. . - Clause 49 of the Bill seeks to substitute Chapter XIV-B of the Income-tax Act relating to special procedure for assessment of search cases. Proposed section 158B provides definition for expressions block period and undisclosed income . Proposed section 158BA relates to Assessment of total income as a result of search. Sub-section (1) of said section provides that notwithstanding anything contained in any other provisions of the Act, where on or after the 1st day of September, 2024, a search is initiated under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Act. Sub-section (7) of said section provides that the total income relating to the block period shall be charged to tax, at the rate specified in section 113, as income of the block period irrespective of the previous year or years to which such income relates. Proposed section 158BB relates to computation of total income of block period. Sub-section (1) of said section provides that the total income referred to in sub-section (1) of section 158BA of the block period shall be the aggregate of certain incomes. Sub-section (2) of said section provides that the undisclosed income falling within the block period, forming part of the total income referred to in sub-section (1) of section 158BA, shall 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 of books of account or other documents and such other materials or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter. Sub-section (3) of said section provides that where any evidence found as a result of search or requisition of books of account or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sub-section (1), or where the income as determined under clause (iv), is a loss, it shall be ignored. Sub-section (7) of said section provides that for the purpose of assessment under this Chapter, losses brought forward from the previous year (prior to the first previous year comprising the block period) under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32 shall not be set off against the undisclosed income determined in the block assessment under this Chapter but may be carried forward for being set off in the previous year subsequent to the assessment year in which the block period ends, for the remaining period, taking into account the block period and such assessment year, and in accordance with the provisions of the Act. Proposed section 158BC relates to procedure for block assessment. Sub-section (1) of said section 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, (a) the Assessing Officer shall, in respect of search initiated, or books of account or other documents or any assets requisitioned, on or after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against such other person and the provisions of this Chapter shall apply accordingly. Proposed section 158BE relates to time-limit for completion of block assessment. Sub-section (1) of said section provides that notwithstanding the provisions of section 153, the order under section 158BC shall be passed within twelve months from the end of the month in which the last of the authorisations for search under section 132, or requisition under section 132A, was executed or made, as the case may be. Proviso to the said sub-section provide for extension of period by twelve months under certain circumstances. Sub-section (2) of said section provides that in computing the period of limitation under sub-section (1), the period (not exceeding one hundred and eighty days) commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account, or other documents or money or bullion or jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132A, as the case may be, are handed over to the Assessing Officer having jurisdiction over the assessee, in whos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of penalty a sum which shall be equal to fifty per cent. of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of sub-section (1) of section 158BC. Sub-section (3) of said section provides the circumstance under which no order imposing a penalty under sub-section (2) shall be made. Sub-section (4) of said section provides the period which shall excluded in computing the period of limitation under the said section. Sub-section (5) of said section provides that an income-tax authority on making an order under sub-section (2) imposing a penalty, unless he is himself an Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer. Proposed section 158BG relates to authority competent to make assessment of block period. The said section provides that the order of assessment for the block period shall be passed by an Assessing Officer not below the rank of a Deputy Commissioner or an Assistant Commissioner or a Deputy Director or an Assistant Director, as the case may be. Proviso to said section provides that no such order shall be passed without the previous approval of the Additional Commissioner or t ..... 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