The paper proposes a new technique for blind source separation (BSS) in the subband domain using an extended lapped transform (ELT) decomposition for nonstationary, convolutively mixed signals. As identified by S. Araki et al. (see Proc. 4th Int. Symp. on Independent Component Analysis and Blind Signal Separation - ICA2003, p.499-504, 2003), the motivation for subband-based BSS is the drawback of frequency domain BSS when dealing with separating mixed speech signals over a few seconds resulting in few samples in individual frequency bins leading to poor separation performance. In the proposed approach, mixed signals are decomposed into subband components by an ELT and within each subband a time domain Newton BSS algorithm is employed based on the nonstationarity property of the input signals and the joint diagonalization of output correlation matrices with time varying second order statistics (SOS). This subband version is compared to a fullband version using the same BSS algorithm.