Since block assessment has been discontinued, there is litigation as regards the year of tax ability of certain income/ assets discovered in search. If it is provided that an assessee can agree to subject the whole of sums/assets to be taxed in the year of search at a flat rate of 60% (tax which is equal levy of 100% penalty on today’s maximum marginal rate). No further proceedings/assessments would become necessary.

Taking into consideration the ground reality, such voluntary compliance at every stage should be encouraged. By closing the option of voluntary compliance in search cases at higher cost, the defaulting tax payers will be compelled to opt for litigation in respect of the income, which he would have otherwise readily agreed to offer for taxation. In this process he may or may not succeed but can definitely prolong the litigation.


The continuance of earlier block assessment procedure is desirable and would help in:

(a) reducing controversy over the year of tax ability of income;

(b) providing suitable incentive for a person to make the necessary disclosure without indulging in litigation and

(c) removing administrative difficulties such as multiplicity of appeals, bunching together of assessments etc.

Source-  ICAI Pre- Budget Memorandum–2018 (Direct Taxes and International Tax)

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