Section 158BG — Authority Competent to Make the Block Assessment

CHAPTER XIV-B — SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES (BLOCK ASSESSMENT)

Section 158BG — Authority Competent to Make the Block Assessment

Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise

Status: Live (revived regime). The authority-and-approval provision. Substituted by the Finance (No. 2) Act, 2024 with effect from 1 September 2024. The block order must be passed by an Assessing Officer not below the rank of Deputy/Assistant Commissioner or Deputy/Assistant Director, and only with the previous approval of the Additional/Joint Commissioner or Additional/Joint Director for searches/requisitions on or after 1 September 2024.

FA 2026: No amendment by the Finance Act, 2026.

A. SECTION COMMENTARY

Section 158BG secures the seniority and supervisory integrity of the block assessment. The order must be passed by an officer of at least the rank of Deputy/Assistant Commissioner (or Deputy/Assistant Director); and the proviso forbids the passing of any such order without the previous approval of the Additional/Joint Commissioner or Additional/Joint Director. The block assessment is thus a two-tier exercise — drafted by the assessing officer, approved by a designated superior — reflecting the gravity of the special sixty-per-cent charge.

The previous approval is a substantive safeguard. On the one hand, the designated authority must apply its own independent mind; a mechanical, rubber-stamp or 'borrowed' approval does not satisfy the requirement (the principle of SPL's Siddhartha, a section 151 sanction case applied by analogy). On the other hand, where approval is duly granted it carries weight: the Karnataka High Court has held that the Commissioner's approval under section 158BG imports his full knowledge of, and authoritative confirmation of, the contents of the order, so that he cannot thereafter revise the same order under section 263 (Annapoornamma Chandrashekar).

In candour, the revived section 158BG has not yet been judicially construed, and there is no decision specifically on the recast text. The twin propositions — that the approval must be a real, applied-mind satisfaction of the designated authority, and that a duly-granted approval carries the consequences of full knowledge — are, however, well settled and are the most reliable guide to how section 158BG will be applied. Practitioners should ensure the approval is by the correct authority, on the material, and demonstrably an application of mind.

B. STATUTORY POSITION (verbatim text)

Reproduced from the local Act (base text to the Finance Act, 2025).

158BG. The order of assessment for the block period shall be passed by an Assessing Officer not below the rank of a Deputy Commissioner or an Assistant Commissioner or a Deputy Director or an Assistant Director, as the case may be:

Provided that no such order shall be passed without the previous approval of the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director, as the case may be, in respect of search initiated under section 132, or books of account, other documents or any assets requisitioned under section 132A, on or after the 1st day of September, 2024.

C. AUTHORITIES

In candour, the recast section 158BG has not been construed; the controlling principles are drawn from the cognate sanction jurisprudence (independent mind) and from the Karnataka High Court on the effect of a duly-granted section 158BG approval.

1. Previous approval must reflect independent application of mind (cognate)

CIT v. SPL's Siddhartha Ltd. (2012) 345 ITR 223 (Delhi) — cognate (section 151 sanction)

Court: High Court of Delhi; judgment dated 14 September 2011.

Held: Where the statute designates a particular authority to grant approval/record satisfaction, that authority alone must apply its own independent mind; approval by a different (even higher) authority, or a mechanical/borrowed satisfaction, does not meet the requirement and is not a curable irregularity.

Significance: Cited as cognate authority on the nature of a mandatory statutory approval. Though on section 151, the 'independent application of mind by the designated authority' principle informs the previous-approval requirements in section 158BG and section 158BC(3).

2. A duly-granted section 158BG approval imports full knowledge (and bars later section 263 revision)

CIT v. Annapoornamma Chandrashekar (Smt.) (2013) 353 ITR 55 / (2012) 204 Taxman 158 (Karnataka)

Court: High Court of Karnataka.

Held: Where the Commissioner has granted approval for the block assessment order under section 158BG, it means the Commissioner had full knowledge of, and has authoritatively confirmed, the contents of the order; he cannot thereafter revise the same order in exercise of revisional jurisdiction under section 263. The Court also held that, because section 158BH opens with 'save as otherwise provided in this Chapter', the other provisions of the Act are not attracted automatically where the Chapter otherwise provides.

Significance: A leading authority on the substantive nature of the section 158BG approval (it imports the approving authority's full knowledge) and on the operation of the section 158BH saving clause.

3. The two approval checkpoints of the revived Chapter

Section 158BC(3) and section 158BG read together

Position: The revived Chapter contains two distinct approval requirements: prior approval before issue of the block notice (section 158BC(3)), and previous approval before the block assessment order is passed (section 158BG). Each is a separate jurisdictional safeguard that must be genuinely satisfied; failure of either is a substantive defect, not a curable irregularity.

Significance: The doubling of the safeguard underscores the seriousness of the special charge and gives the assessee two points at which the integrity of the approval may be tested.

Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a sub-section omitted by amendment. Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported and have been cross-checked; decisions of the Income-tax Appellate Tribunal and High Courts are identified as such, and decisions rendered under the 1995–2003 Chapter XIV-B or the cognate sections 153A–153C are flagged where relied upon, since the revived sections are not yet judicially construed. Where a section is genuinely sparse of authority, that is stated candidly rather than padded. Not legal advice.