Compliance
Compliance Update: Navigating Search & Requisition Assessments with ITR-BN Return
New rules for filing returns when facing a search or requisition: introduction of Form ITR-BN and Appendix IV to govern block assessments under India’s Income-tax Act, 2025.
By NomadicTax Research Team • 5-8 min read • August 19, 2026
## What Are Search & Requisition Assessments?
Search/requisition assessments are triggered when tax authorities conduct a **search** under section 132 or a **books-requisition** under section 132A of the Income-tax Act. These typically result in **block assessments**, which cover multiple past assessment years and enforce disclosure of undisclosed income/assets.
## Key Changes Effective From 1 April 2026
- **Form ITR-BN**: A new return form specifically for block assessment cases has been introduced via CBDT Notification No. 97/2026. All persons/entities subject to notices under Sections 158BC or 158BC read with 158BD are required to file ITR-BN. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?link=3&mobile-app=1&page=%2C0&utm_source=openai))
- **Rule 332 Amendment and Appendix IV**: These specify the manner and content of returns in search/requisition cases. They outline the formats to be used, verification requirements, and timelines. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/latest-news?link=3&mobile-app=1&page=%2C0&utm_source=openai))
## Who Must Comply
- Any individual, HUF, company or other entity subjected to a search (sec 132) or requisition (sec 132A) **on or after 1 September 2024**, and issued notice for block assessment under sec 158BC or 158BC r.w.s. 158BD. ([incometax.gov.in](https://www.incometax.gov.in/iec/foportal/help/ITR%20B?utm_source=openai))
- Must file ITR-BN within the due date specified in the notice.
## What Information Goes into ITR-BN
- Declaration of undisclosed income/assets for the block period
- Heads of income: salary, business & profession, capital gains, house property, etc.
- Valuation of assets: physical, financial, foreign assets, virtual digital assets, etc.
- TDS/TCS credits, tax already declared, reconciliations
## Practical Tips for Compliance
- Maintain detailed records of income & assets spanning the **block period**, including for past years under assessment.
- For virtual assets, keep transaction records and cost basis clearly documented.
- File ITR-BN proactively once notice is served; missing the deadline can lead to penalties or loss of rights to objections/assert defenses.
## Example Scenario
Suppose a taxpayer receives a requisition notice on 1 October 2024. They must collate details for the block period covering the six preceding assessment years plus period from 1 April of prior year to date of search, file ITR-BN under the amended rules, report all incomes/assets during that period, even those not previously disclosed.
## Consequences of Non-Compliance
Failure to file ITR-BN properly can result in:
- Higher tax assessment without opportunity of normal return filing
- Penalties for understatement or concealment of income
- Interest for late payments, plus potentially prosecution in severe cases
## Next Steps for Affected Taxpayers
1. On receiving search/requisition notice, immediately consult a tax professional to prepare ITR-BN.
2. Gather asset valuation and income information for block period.
3. Ensure accurate reporting of foreign/resident virtual digital assets.
Navigating search & requisition assessments under the new ITR-BN rules demands careful documentation and timely action. Proper compliance helps preserve rights and reduce exposure to penalties.