Section 10 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 10 is the assessment section. It lets the Assessing Officer serve a notice, make an inquiry, and pass a written order assessing the undisclosed foreign income and asset and fixing the sum payable. It also covers a person who does not comply with the notice. The text below is from the Act as enacted and published in the Gazette of India on 27 May 2015.
The Assessing Officer may serve a notice on any person to produce accounts, documents or evidence, inquire for the relevant financial year or years, and then pass an order in writing. If a person does not comply with all the terms of the notice, the officer makes the assessment on his own judgment of the material gathered, after giving the assessee an opportunity of being heard. The same section covers reassessment, because section 2(3) says assessment includes reassessment.
Sub-section (1): the notice
Section 10(1) says that, for the purposes of making an assessment or reassessment under the Act, the Assessing Officer may, "on receipt of an information from an income-tax authority under the Income-tax Act or any other authority under any law for the time being in force or on coming of any information to his notice", serve on any person a notice. The notice requires the person, on a date to be specified, to produce or cause to be produced such accounts, documents or evidence as the Assessing Officer may require for the purposes of this Act. Further notices may be served "from time to time" for other accounts, documents or evidence.
| Feature | What the sub-section says |
|---|---|
| Trigger | Receipt of information from an income-tax authority or any other authority under any law, or any information coming to his notice |
| Who may be served | "any person", not only the assessee |
| What may be demanded | Accounts, documents or evidence the officer requires for the purposes of this Act |
| How often | From time to time, by further notices |
Two points matter. The trigger is wide: information from another authority, or any information that comes to the officer's notice, is enough. And the notice can go to any person, which can include banks or other third parties. The sub-section does not list who they are and this article does not guess. The officer's powers to compel production and enforce attendance are in section 8.
If you have received a notice of this kind about a foreign account or an overseas holding, you can have a legal dispute resolution adviser read it with you before the date fixed in the notice.
Sub-section (2): inquiry
Section 10(2) says the Assessing Officer "may make such inquiry, as he considers necessary, for the purpose of obtaining full information in respect of undisclosed foreign income and asset of any person for the relevant financial year or years". The inquiry is not limited to what the assessee produces. It is limited only by what the officer considers necessary for full information, for "the relevant financial year or years". Note the Act speaks of financial years here, while the charge in section 3 speaks of the previous year.
Sub-section (3): the written assessment
Section 10(3) says the Assessing Officer, after considering the accounts, documents or evidence obtained under sub-section (1), after taking into account any relevant material gathered under sub-section (2), and after considering any other evidence produced by the assessee, "shall by an order in writing, assess the undisclosed foreign income and asset and determine the sum payable by the assessee".
Three things to note:
- The order must be in writing. An assessment is not complete until there is a written order.
- Three sources of material: documents obtained by notice, material from the inquiry and evidence the assessee himself produces.
- The order has two parts: it assesses the undisclosed foreign income and asset and it determines the sum payable.
The way the total is built is in sections 4 and 5. The time limits within which the order must be passed are in section 11.
Sub-section (4): when a notice is not complied with
Section 10(4) covers a person who "fails to comply with all the terms of the notice under sub-section (1)". In that case the Assessing Officer shall, "after taking into account all the relevant material which he has gathered and after giving the assessee an opportunity of being heard", make the assessment of undisclosed foreign income and asset on his own judgment of the material gathered, and determine the sum payable by the assessee.
The consequences of not complying are therefore as follows.
- The test is "all the terms of the notice". Partial compliance, where some terms are met and some are not, falls within the words.
- The officer may then proceed on his own judgment of the material he has gathered.
- Before doing so he must give the assessee an opportunity of being heard. The sub-section uses "shall" for this step.
The provision is a reason to respond to a notice fully and on time. It is not a reason to panic: the officer must still take all relevant material into account and must hear the assessee. The sub-section is silent on how the hearing is to be arranged, and on what weight the officer must give the material.
Reassessment, and what follows the order
Section 2(3) says "assessment" includes reassessment, so the section applies to both. The Act has no separate section for reassessment. After the order, the next steps are a notice of demand (section 13), and appeal to the Commissioner (Appeals) under section 15. The penalty in section 41 is computed on "the tax computed under section 10"; see our article on section 41.
An example
Dev Arora, a resident other than not ordinarily resident, receives a notice requiring him to produce statements of an overseas brokerage account and the source of funds by a specified date. He produces the statements but not the source documents. The officer inquires further, then takes the view that Dev has not complied with all the terms of the notice. He gives Dev an opportunity of being heard, and then, under section 10(4), assesses on his own judgment of the material gathered. Had Dev produced the source documents with a short covering explanation, the officer's assessment under sub-section (3) would have taken that evidence into account.
Need help with an assessment notice?
An assessment under this Act begins with a notice and ends with a written order, and what you produce in between shapes the result. If you have received a notice, our legal dispute resolution team can help you read it, assemble the documents and prepare your reply.
Key takeaways
- The Assessing Officer may serve a notice on any person on receipt of information or when information comes to his notice, and may serve further notices.
- The officer may inquire for the relevant financial year or years to obtain full information.
- The assessment is by an order in writing that assesses the undisclosed foreign income and asset and determines the sum payable.
- If the person does not comply with all the terms of the notice, the officer makes the assessment on his own judgment of the material gathered, after giving the assessee a hearing.
- Assessment includes reassessment, under section 2(3).
- Later Finance Act amendments to section 10 must be checked before acting. References to the Income-tax Act, 1961 are as printed in 2015; check the corresponding provision of the current income-tax law.
Read next
- Sections 8 and 9: powers of discovery, evidence and judicial proceedings
- Section 11: time limit for assessment and reassessment
- Section 41: penalty in relation to undisclosed foreign income and asset
- Black Money Act: undisclosed foreign income, an overview
Disclaimer: Based on the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as enacted and published in the Gazette of India on 27 May 2015, and on the Rules of 2015 as notified on 2 July 2015, as consulted on 2 October 2026. Later Finance Act amendments, amendment rules and the current income-tax law should be checked. This article is general information, not legal advice; check the official text before acting.