Section 158BE of ITA, 1961 : Section 158Be: Time Limit For Completion Of Block Assessment

Explanation using Example

Imagine a business owner, Mr. X, who is suspected of tax evasion. On January 15, 2020, the Income Tax Department conducts a search of his business premises under section 132 of the Income-tax Act, 1961. This search is the last in a series of searches that began in the same month. According to Section 158BE of the Income-tax Act, 1961:

1. The Income Tax Department must pass the order under section 158BC, which pertains to the block assessment of undisclosed income discovered during the search, within two years from the end of the month in which the last search was conducted. In Mr. X's case, the deadline for passing the block assessment order would be February 28, 2022.
2. If the assessment proceedings are stayed by a court order, or if there's a delay due to an audit request by the Assessing Officer, or if there's an application to the Settlement Commission, these periods are excluded from the calculation of the two-year deadline.
3. Furthermore, if after excluding the above periods, the remaining time for the Assessing Officer to pass the order is less than sixty days, the remaining period is extended to sixty days.

Therefore, if Mr. X's case was delayed because he had to submit an audit report which took two months, the new deadline for the Income Tax Department to pass the block assessment order would be extended by those two months, ensuring compliance with Section 158BE.