www.Aaptaxlaw.com
 
 
 

What is Computation of undisclosed income of the block period? What is the Procedure for block assessment? Section 158BB and 158BC of Income Tax Act 1961

Computation of undisclosed income of the block period and Procedure for block assessment are defined under section 158BB and 158BC of Income Tax Act 1961. Provisions under these Sections are :

Section 158BB of Income Tax Act "Computation of undisclosed income of the block period"

Section 158BB. (1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years, determined,-
(a) where assessments under section 143 or section 144 or section 147 have been concluded prior to the date of commencement of the search or the date of requisition, on the basis of such assessments;
(b) where returns of income have been filed under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 but assessments have not been made till the date of search or requisition, on the basis of the income disclosed in such returns;

 

(c) where the due date for filing a return of income has expired, but no return of income has been filed,-
(A) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such entries result in computation of loss for any previous year falling in the block period; or
(B) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period;
(ca) where the due date for filing a return of income has expired, but no return of income has been filed, as nil, in cases not falling under clause (c);

(d) where the previous year has not ended or the date of filing the return of income under sub-section (1) of section 139 has not expired, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous years;
(e) where any order of settlement has been made under sub-section (4) of section 245D, on the basis of such order;
(f) where an assessment of undisclosed income had been made earlier under clause (c) of section 158BC, on the basis of such assessment.
Explanation.-For the purposes of determination of undisclosed income,-
(a) the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of this Act without giving effect to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32:
Provided that in computing deductions under Chapter VI-A for the purposes of the said aggregation, effect shall be given to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32;
(b) of a firm, returned income and total income assessed for each of the previous years falling within the block period shall be the income determined before allowing deduction of salary, interest, commission, bonus or remuneration by whatever name called to any partner not being a working partner :
Provided that undisclosed income of the firm so determined shall not be chargeable to tax in the hands of the partners, whether on allocation or on account of enhancement;
(c) assessment under section 143 includes determination of income under sub-section (1) or sub-section (1B) of section 143.
(2) In computing the undisclosed income of the block period, the provisions of sections 68, 69, 69A, 69B and 69C shall, so far as may be, apply and references to "financial year" in those sections shall be construed as references to the relevant previous year falling in the block period including the previous year ending with the date of search or of the requisition.
(3) The burden of proving to the satisfaction of the Assessing Officer that any undisclosed income had already been disclosed in any return of income filed by the assessee before the commencement of search or of the requisition, as the case may be, shall be on the assessee.
(4) For the purpose of assessment under this Chapter, losses brought forward from the previous year 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 regular assessments.

Section 158BC of Income Tax Act "Procedure for block assessment"

Section 158BC. Where any search has been conducted 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-
(i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days;
(ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days,
as may be specified in the notice a return in the prescribed form30 and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period :
Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter :
Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;
(b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply;
(c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment;
(d) the assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B.

Income Tax Act 1961

What is Sanction for issue of notice? What is Other provisions? Section 151 and 152 of Income Tax Act 1961

What is Time limit for completion of assessments and reassessments? What is Assessment in case of search or requisition? Section 153 and 153A of Income Tax Act 1961

What is Time-limit for completion of assessment under section 153A? What is Assessment of income of any other person? Section 153B and 153C of Income Tax Act 1961

What is the meaning of Prior approval necessary for assessment in cases of search or requisition? What is Rectification of mistake? Section 153D and 154 of Income Tax Act 1961

What are other amendments? What is Notice of demand? Section 155 and 156 of Income Tax Act 1961

What is Intimation of loss? What is Intimation of assessment of firm? Section 157 and 158 of Income Tax Act 1961

What is Procedure when assessee claims identical question of law is pending before High Court or Supreme Court? Section 158A of Income Tax Act 1961

What is Procedure when in an appeal by revenue an identical question of law is pending before Supreme Court? Section 158AA of Income Tax Act 1961

What is search cases Definitions? What is Assessment of undisclosed income as a result of search? Section 158B and 158BA of Income Tax Act 1961

What is Computation of undisclosed income of the block period? What is the Procedure for block assessment? Section 158BB and 158BC of Income Tax Act 1961

What is Undisclosed income of any other person? What is Time limit for completion of block assessment? Section 158BD and 158BE of Income Tax Act 1961

What is the meaning of Certain interests and penalties not to be levied or imposed? What is Levy of interest and penalty in certain cases? Section 158BF and 158BFA of Income Tax Act 1961

What is the Authority competent to make the block assessment? What is Application of other provisions of this Act? What is the Chapter not to apply after certain date? Section 158BG, 158BH and 158BI of Income Tax Act 1961

What are Legal representatives? Who is Representative assessee? Section 159 and 160 of Income Tax Act 1961

Home     About Us     Privacy Policy     Disclaimer    Contact Us  Sitemap