Important Amendments by The Finance (No. 2) Act, 2024 – Block Assessment

INTRODUCTION

Chapter XIV-B of the Act was earlier inserted in 1995 to provide for the special procedure for assessment of search cases which was commonly referred to as the ‘block assessment’. 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.

The Finance Act, 2003 made these provisions dealing with block assessment in search cases inapplicable to the searches initiated after 31st May, 2003 for the reason that the scheme of block assessment had failed in its objective of early resolution of search assessments. It had provided for two parallel assessments, i.e., one regular assessment and the other block assessment covering the same period, i.e., the block period which had resulted into several controversies centering around the treatment of a particular income as ‘undisclosed’ and whether it is relatable to the material found during the course of search etc. Therefore, the new Sections 153A, 153B and 153C were introduced wherein it was provided that the assessments pending as on the date of initiation of search would abate and only one assessment would be made wherein the total income of the assessee was requi