Block assessment under search proceedings is confined to undisclosed income, and final settlement cannot be reopened on review-like applications.

Chapter XIV-B is a special, self-contained procedure for assessing undisclosed income detected on search, distinct from regular assessment, and its operation is confined to undisclosed income as defined in the Act with tax charged accordingly. The document also states that a challenge to a settled block assessment raised only through miscellaneous applications in the nature of review was not maintainable after the settlement order had attained finality. Judicial review over the Settlement Commission is limited to illegality in procedure or contravention of the Act causing prejudice, and does not extend to reconsideration of the merits of the income adopted in settlement.

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Issues: Whether the block assessment under Chapter XIV-B of the Income-tax Act was confined to undisclosed income found as a result of search, and whether the High Court could interfere with the Settlement Commission's refusal to entertain the miscellaneous applications challenging the settled assessment.

Analysis: Chapter XIV-B provides a special and independent procedure for assessment of undisclosed income detected pursuant to search, distinct from regular assessment. The assessment under sections 158BA, 158BB and 158BC is directed to undisclosed income as defined in section 158B(b), and tax is chargeable under section 113. The petitioners had not challenged the original block assessment before the Settlement Commission on the footing later urged, but raised it only through miscellaneous applications in the nature of a review. The settlement order had attained finality, and the scope of judicial review over the Settlement Commission is confined to illegality in procedure or contravention of the Act causing prejudice, not reassessment of the merits of the income adopted in the settlement.

Conclusion: The challenge was not maintainable and no ground for interference was made out. The issue was decided against the petitioners and in favour of the Revenue.

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