Section 294
Section 294: procedure for block assessment
Section 294 lays down the actual mechanics of a block assessment following a search or requisition: the notice calling for a special return of undisclosed income, how that return is treated differently from a normal return, and how the Assessing Officer finally determines and assesses the tax.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
Notice requiring a return of undisclosed income
Where a search has been initiated or a requisition made, the Assessing Officer must issue a notice requiring the person to furnish, within a period specified in the notice not exceeding sixty days, a return (in the prescribed form and manner) setting out his undisclosed income for the block period.
- The return is treated as if furnished under section 263, and a notice under section 270(8) is then issued.
- A return furnished beyond the period allowed in the notice is not deemed to be a return under section 263.
- No notice under section 280 (the normal reassessment notice) is required for this block-assessment procedure.
- A person who has furnished a return under this clause is not entitled to furnish a revised return.
- The time allowed to furnish the return may be extended by a further thirty days where: the due date for the immediately preceding tax year's return had not expired before the search/requisition, the assessee was liable for audit for that year, the accounts for that year have not yet been audited when the notice is issued, and the assessee requests an extension in writing to get the accounts audited.
Determining the assessment
The Assessing Officer determines the total undisclosed income of the block period as laid down in section 293, applying (so far as relevant) sections 268, 270(8), 270(10), 271, 276, 277 and 278.
On determining the total undisclosed income, the Assessing Officer passes an order of assessment or reassessment and determines the tax payable on that basis - and section 275 (the Dispute Resolution Panel draft-order process) does not apply to such an order.
Assets seized under section 247 or requisitioned under section 248 are dealt with as per section 250.
Other procedural points
Section 270(1) (regular intimation processing) does not apply to a return furnished under this section.
Before issuing the notice under sub-section (1)(a), the Assessing Officer must take the prior approval of the Additional Commissioner, Additional Director, Joint Commissioner or Joint Director.
Frequently asked questions
How much time do I get to file a return of undisclosed income after a search?
The notice under Section 294(1)(a) specifies the period, which cannot exceed sixty days - though it can be extended by a further thirty days in specified audit-related circumstances.
Can I revise the return I file in response to a block-assessment notice?
No - Section 294(1)(a)(iv) expressly states that a person who has furnished a return under this clause is not entitled to furnish a revised return.
Does the Dispute Resolution Panel process apply to block-assessment orders?
No - Section 294(1)(c) specifically states that section 275 (the DRP draft-order process) does not apply to a block-assessment order.
Whose approval is needed before the block-assessment notice is issued?
The Additional Commissioner, Additional Director, Joint Commissioner or Joint Director, under Section 294(3).
Related sections
Want this applied to your actual filing, not just explained?
Get help responding to a block-assessment notice under Section 294Last updated 9 September 2026