Important Amendments by The Finance Act, 2025 – 2.0 Block Assessment in Search Cases

Introduction

The procedure of block assessment to be made in cases where a search has been conducted under Section 132 or a requisition has been made under Section 132A was earlier introduced in 1995. Under this erstwhile scheme of block assessment, in addition to the assessments which were to be conducted in a regular manner, a special assessment was required to be made assessing only the 'undisclosed income' relating to the ‘block period’ in a case where the search has been conducted.

In 2003, these provisions dealing with block assessment in search cases were made inapplicable for the reasons as stated in the Memorandum explaining the provisions of the Finance Bill, 2003 which are reproduced below –

The existing provisions of the Chapter XIV-B provide for a single assessment of undisclosed income of a block period, which means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted and also includes the period up to the date of the commencement of such search, and lay down the manner in which such income is to be computed. The main objectives for the introduction of the Chapter XIV-B were avoidance of disputes, early finalization of search assessments and reduction in multiplicity of p