Computation of Total Undisclosed Income of the Block Period Introduction Section 158BB specifies the method for computing total undisclosed income during a block assessment. The Finance Act 2025 introduces a simplified computation mechanism, under which undisclosed income is the aggregate of (a) undisclosed income declared by the assessee and (b) undisclosed income determined by the Assessing… Read More »

Framework of Block Assessment Introduction Section 158BA provides the statutory framework governing the assessment of total undisclosed income in cases of search under Section 132 or requisition under Section 132A. The provision aims to ensure a comprehensive, consolidated, and legally robust mechanism for addressing undisclosed income, reducing litigation and streamlining tax administration.   Date of application The block assessment procedure… Read More »

Block Assessment Introduction Block assessment is a special procedure applicable in cases where a search under Section 132 or a requisition under Section 132A is initiated on or after 01-09-2024. It provides for a single consolidated assessment of the total undisclosed income for the block period. Any pending assessments or reassessments abate and merge with the block assessment. The… Read More »

Power to Call for Information by Income-tax Authorities Introduction Section 133 of the Income-tax Act empowers income-tax authorities to call for information for any inquiry or proceeding under the Act. This provision enables authorities to collect relevant data from various persons, including firms, HUFs, trustees, and financial institutions. Types of Information That Can Be Called Under Section… Read More »

Guidelines for Compulsory Selection of Returns for Complete Scrutiny – FY 2024-25 Introduction The Central Board of Direct Taxes (CBDT) issues annual guidelines for compulsory scrutiny selection. For FY 2024-25, the guidelines were issued via Circular F. No. 225/72/2024/ITA-II, dated 03-05-2024. Parameters for Compulsory Scrutiny Selection Cases Pertaining to Survey (Section 133A) o If the… Read More »

Document Identification Number (DIN) Introduction The Central Board of Direct Taxes (CBDT) has made it mandatory to quote a Document Identification Number (DIN) in all communications issued by Income-tax authorities from 01-10-2019. Taxpayers can verify the authenticity of such documents on the Income-tax e-filing portal. This initiative aims to enhance transparency and maintain an audit… Read More »

Notice of Demand Introduction A Notice of Demand is issued by the Assessing Officer (AO) when an assessee is liable to pay tax, interest, penalty, fine, or any other sum under the Income-tax Act. When is a Notice of Demand Issued? A tax, interest, penalty, or other sum becomes due only when the Assessing Officer… Read More »

Reference to Authorities to Invoke GAAR Introduction The General Anti-Avoidance Rule (GAAR) allows tax authorities to declare an arrangement as an Impermissible Avoidance Arrangement (IAA). If the Assessing Officer (AO) identifies such an arrangement during assessment or reassessment, he may refer it to the Principal Commissioner (PCIT) or Commissioner (CIT). If the CIT is not… Read More »