Section 158BI of the Income-tax Act, 1961: Historical Rule and Omission in 2025
Section 158BI originally restricted the application of the special block assessment procedure after 31 May 2003. The provision was later replaced when Chapter XIV-B was revived for searches from 1 September 2024, and was subsequently omitted retrospectively by the Finance Act, 2025.
What did Section 158BI provide?
The historical text of Section 158BI, inserted by the Finance Act, 2003 with effect from 1 June 2003, stated:
"The provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003."
In practical terms, the former Chapter XIV-B block assessment scheme generally ceased to govern searches or requisitions commencing from 1 June 2003. The relevant post-2003 search assessment provisions operated under other parts of the Income-tax Act.
Legislative history and important dates
| Period or amendment | Legal significance |
|---|---|
| Up to 31 May 2003 | Former Chapter XIV-B governed qualifying historical block assessment cases. |
| From 1 June 2003 | The 2003 version of Section 158BI excluded later searches and requisitions from that Chapter. |
| From 1 September 2024 | Finance (No. 2) Act, 2024 revived Chapter XIV-B for qualifying new searches and requisitions and substituted Section 158BI with a transitional exclusion for earlier searches. |
| Finance Act, 2025 | Section 158BI was omitted retrospectively from 1 September 2024. Section 158BA continues to specify the commencement condition for the revived block assessment framework. |
Relevant statutory provisions explained
Section 132 - Search and seizure
Section 132 authorises specified income-tax authorities, subject to statutory conditions, to conduct searches and seize relevant books, documents and assets. The initiation date is important when determining the applicable assessment regime.
Section 132A - Requisition
Section 132A permits authorised requisition of books of account, documents or assets held by specified authorities in the circumstances laid down by law. The date of requisition matters for the Chapter XIV-B commencement rule.
Section 158BA - Assessment of total undisclosed income
Under the revived Chapter XIV-B, Section 158BA provides for assessment or reassessment of total undisclosed income of the block period where a search is initiated or requisition is made on or after 1 September 2024. Its conditions and related amendments must be read together with the other provisions of the Chapter.
Sections 158BB and 158BC - Computation and procedure
Section 158BB addresses computation of undisclosed income for the block period. Section 158BC prescribes the block assessment procedure, including notice and return requirements. The Income Tax Department provides guidance on Form ITR-B for applicable search cases.
What does omission of Section 158BI mean?
The omission does not mean that the revived block assessment procedure automatically applies to every historical search. Section 158BA independently limits the new Chapter XIV-B framework to qualifying searches or requisitions on or after 1 September 2024. Earlier proceedings must be considered under the law applicable to their initiation date and the relevant transitional provisions.
Likewise, the historical 31 May 2003 cutoff should not be presented as the operative rule for searches initiated in 2024 or later. That cutoff belongs to the earlier version of the legislation.
Frequently asked questions
Is Section 158BI still in force?
No. The Finance Act, 2025 omitted it retrospectively with effect from 1 September 2024.
When does the revived block assessment scheme apply?
Section 158BA applies to qualifying searches initiated or requisitions made on or after 1 September 2024, subject to the applicable statutory conditions.
Does the omission reopen every old search assessment?
No. The omission alone does not retrospectively place all pre-September 2024 searches within the revived Chapter XIV-B regime.
Official legislation and guidance
- Income Tax Department - historical Section 158BI
- Income Tax Department - Finance Act, 2025 highlights (including omission of Section 158BI)
- Income Tax Department - Section 158BA
- Income Tax Department - ITR-B user manual
- Income-tax Act, 1961 as amended by Finance Act, 2025 (official PDF)
Updated 26 October 2026. This article explains the legislative history of Section 158BI and the 2024-2025 changes. The applicable law for a particular case depends on its facts, dates and transitional provisions.