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CA Final · Direct Tax Laws & International Taxation · Taxation of Digital Transactions

Mr. Rohan Mehta runs a crypto-trading advisory firm in Pune. A search under the Income-tax Act, 2025 was initiated on 10 August 2026 (tax year 2026-27). The last panchnama in the case of any person named in the warrant was concluded on 5 December 2026. What is the block period for assessing undisclosed income, including undisclosed virtual digital assets?

The block period covers the six tax years 2020-21 to 2025-26 plus 1 April 2026 up to 5 December 2026. The end point is the conclusion of the last panchnama, not the date the search began, and not the end of the tax year.

  1. ASix tax years 2020-21 to 2025-26, plus 1 April 2026 to 5 December 2026Correct
  2. BSix tax years 2020-21 to 2025-26, plus 1 April 2026 to 10 August 2026
  3. CSeven tax years 2019-20 to 2025-26, plus 1 April 2026 to 5 December 2026
  4. DSix tax years 2021-22 to 2026-27, ending on 31 March 2027

Explanation

Block period is the six tax years preceding the tax year of search, plus the period from 1 April of the search year to the execution of the last of the authorisations. For a search, that is the conclusion recorded in the last panchnama. Ending at 10 August 2026, the initiation date, is wrong because the end point is the last panchnama.

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