Section 292: special procedure for assessment of search cases

The core rule: block assessment applies

Irrespective of any other provision of the Act, where a search is initiated or a requisition is made in the case of any person on or after the commencement of the Act, the Assessing Officer must proceed to assess or reassess the person's total undisclosed income for the block period, as per this Part (sections 292 to 300).

Abatement of overlapping proceedings

Any assessment, reassessment or recomputation proceeding under the rest of the Act, pending on the date of the search or requisition and relating to a tax year falling within the block period, abates (stands halted) from that date.

A proceeding for which a notice is issued during the period between the search/requisition and the date of the block-assessment order under section 294(1)(c) - for a tax year in the block period other than the year in which the last search authorisation is executed - also abates from the date such notice is issued.

If a transfer pricing reference under section 166(1) has been made, or an order passed under section 166(6), in relation to an abated proceeding, that reference or order abates too.

Subsequent search or requisition on the same person

If a further search or requisition occurs while an earlier block assessment is still pending, the pending assessment must be completed first, and the assessment for the subsequent search/requisition follows under this Part thereafter. If less than three months would otherwise remain for the later assessment, that period is extended to three months from the end of the month the earlier assessment was completed.

Revival if the block assessment is annulled

If a block-assessment proceeding, or an order made under section 294(1)(c), is annulled in appeal or other legal proceedings, the assessment/reassessment/recomputation (or reference/order) that had abated revives from the date the Principal Commissioner or Commissioner receives the order of annulment - but this revival itself ceases if the annulment order is later set aside.

Income of the search year, and tax rate

Income (other than undisclosed income) of the tax year in which the last search authorisation is executed, or the requisition is made, is assessed separately under the other, normal provisions of the Act.

The total undisclosed income of the block period, as referred to in section 293(7), is charged to tax at the rate specified in section 192, as income of the block period, irrespective of which particular tax year(s) within the block it actually relates to.

Frequently asked questions