ITR-BN for Search & Requisition Cases: What CBDT’s 2026 Rules Change for Taxpayers and Advisors

The compliance architecture for search and requisition cases has materially changed under the new Income-tax regime. On 27 July 2026, CBDT notified the Income-tax (Third Amendment) Rules, 2026 through Notification No. 97/2026, introducing Form ITR-BN and inserting Appendix IV into Rule 332 for returns relating to search and requisition cases. For taxpayers, finance teams, chartered accountants and litigation professionals, this is not merely a form-number change: it creates a dedicated reporting framework for one of the most sensitive areas of income-tax administration.

Why the new ITR-BN framework matters

Search assessments are document-heavy, evidence-sensitive and often span multiple tax periods, entities and transaction trails. A dedicated return format can therefore influence how undisclosed income, seized material, books, digital evidence, explanations and tax positions are organised before they reach the assessment or appellate stage. The new framework should be read as part of the broader migration from the Income-tax Act, 1961 to the Income-tax Act, 2025 and the Income-tax Rules, 2026.

What CBDT notified on 27 July 2026

The Income Tax Department’s official update states that Notification No. 97/2026 [F. No. 370142/11/2026-TPL] notified the Income-tax (Third Amendment) Rules, 2026. The amendment introduces Form ITR-BN and amends Rule 332 by inserting Appendix IV to govern returns relating to search and requisition cases. The notification is stated to take effect from 1 April 2026.

Professional implications for taxpayers and advisors

First, search-case return preparation should be treated as a litigation-sensitive exercise, not a routine return-filing exercise. Every disclosure should be reconciled with seized material, statements, books of account, AIS/TIS data, bank trails and positions already taken before the investigating authorities.

Second, professionals should create a tax-year-wise evidence matrix before preparing the return. Search matters frequently involve transactions crossing entities and years; without a structured mapping of documents to tax years and legal positions, inconsistencies can emerge between the return, assessment submissions and later appellate pleadings.

Third, explanations for cash, jewellery, investments, loans, share capital, related-party transactions and digital records should be documented contemporaneously. A technically correct return can still become difficult to defend if the evidentiary narrative is fragmented or changes during proceedings.

A practical readiness checklist

Taxpayers facing search or requisition proceedings should maintain: a year-wise seized-material index; entity-wise and bank-wise reconciliation; explanations linked to supporting documents; a record of statements and retractions or clarifications, where any; treatment of undisclosed income with the relevant tax computation; and a clear audit trail showing how each material item has been reflected in the return or explained as non-income.

Litigation takeaway

The biggest risk in search litigation is often inconsistency rather than complexity. A dedicated return framework such as ITR-BN increases the importance of having one defensible factual record from the return stage onward. Advisors should therefore coordinate tax computation, seized-document review and litigation strategy before filing, instead of treating them as separate workstreams.

Transition to the Income-tax Act, 2025

The Income Tax Department has separately rolled out the Income-tax Rules, 2026 and guidance for the new forms under the Income-tax Act, 2025. Professionals should therefore verify the applicable statutory provision, rule, prescribed form and transition rule for the relevant tax year rather than automatically carrying forward references from the 1961 Act.

Conclusion

ITR-BN is a significant procedural development because it gives search and requisition returns a dedicated compliance structure under the new tax regime. For businesses and professionals, the immediate priority should be disciplined evidence mapping, year-wise reconciliation and alignment between return disclosures and the litigation record.

Disclaimer: This article is for general professional information only and does not constitute legal or tax advice. The facts of each search or requisition matter differ materially. Readers should refer to the Income-tax Act, 2025, Income-tax Rules, 2026, Notification No. 97/2026 and other applicable official guidance before taking action.