(1)The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, [in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence,] [ Substituted by Act 20 of 2002, Section 65, for certain words (w.r.e.f. 1.7.1995).] as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years, determined,-(a)where assessments under section 143 or section 144 or section 147 [have been concluded prior to the date of commencement of the search or the date of requisition] [ Substituted by Act 20 of 2002, Section 65, for " have been conclude" (w.r.e.f. 1.7.1995).], on the basis of such assessments;(b)where returns of income have been filed under section 139 [or in response to a notice issued under sub-section (1) of section 142 or section 148] [ Substituted by Act 20 of 2002, Section 65, for " or section 147" (w.r.e.f. 1.7.1995).] but assessments have not been made till the date of search or requisition, on the basis of the income disclosed in such returns;(c)[ where the due date for filing a return of income has expired, but no return of income has been filed,- [ Substituted by Act 20 of 2002, Section 65, for Clause (c) (w.r.e.f. 1.7.1995).](A)on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such entries result in computation of loss for any previous year falling in the block period; or(B)on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period;.(ca)where the due date for filing a return of income has expired, but no return of income has filed, as nil, in cases not falling under clause (c);](d)where the previous year has not ended or the date of filing the return of income under sub-section (1) of section 139 has not expired, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous years;(e)where any order of settlement has been made under sub-section (4) of section 245-D, on the basis of such order;(f)where an assessment of undisclosed income had been made earlier under clause (c) of section 158-BC, on the basis of such assessment.Explanation. - For the purposes of determination of undisclosed income,-(a)the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of [this Act] [ Substituted by Act 20 of 2002, Section 65, for " Chapter IV" (w.r.e.f. 1.7.1995).] without giving effect to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32:[Provided that in computing deductions under Chapter VI-A for the purposes of the said aggregation, effect shall be given to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32;] [ Inserted by Act 20 of 2002, Section 65 (w.r.e.f. 1.7.1995).](b)[ of a firm, returned income and total income assessed for each of the previous years falling within the block period shall be the income determined before allowing deduction of salary, interest, commission, bonus or remuneration by whatever name called ] [ Substituted by Act 33 of 1996, Section 46, for Clause (b) (w.r.e.f. 1.7.1995).][to any partner not being a working partner] [ Inserted by Act 21 of 1998, Section 45 (w.e.f. 1.4.1999).]:[Provided that undisclosed income of the firm so determined shall not be chargeable to tax in the hands of the partners, whether on allocation or on account of enhancement;] [ Substituted by Act 33 of 1996, Section 46, for Clause (b) (w.r.e.f. 1.7.1995).](c)assessment under section 143 includes determination of income under sub-section (1) or sub-section (1-B) of section 143.
