Court upholds regular & block assessments, dismisses challenge on penalty proceedings. Assessing Officer's jurisdiction affirmed.

The court upheld the regular assessment for the years 1995-96 and 1996-97, emphasizing that block assessment is in addition to regular assessment. The Assessing Officer can conduct separate assessments under different provisions to avoid unwieldy procedures. The challenge against penalty proceedings under section 271(1)(c) during block assessment was dismissed, with the court affirming the Assessing Officer's jurisdiction to levy penalties and the petitioner's statutory remedies against the penalty order. The court found the grounds raised against the penalty levy not sustainable, leading to the dismissal of the petition.

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Issues involved: Challenge against regular assessment for the years 1995-96 and 1996-97 due to inclusion in block assessment; Challenge against levy of penalty by the Assessing Officer.

Regular Assessment Challenge: The petitioner, a money-lending firm, challenged the regular assessment for the years 1995-96 and 1996-97, arguing that a separate independent assessment cannot be conducted when the assessment period is included in a block assessment. The Assessing Officer conducted a survey under section 133A and initiated action under Chapter XIV-B for assessment of search cases. The petitioner contended that the assessment under section 143(3) should not have been completed after the notice under section 158BC. The court analyzed section 158BA which deals with undisclosed income resulting from a search, clarifying that block assessment is in addition to regular assessment, as per the Explanation inserted by the Finance Act. The court emphasized that the Assessing Officer is not debarred from framing an assessment under section 143 even after a block assessment, to avoid unwieldy procedures. The judgment cited by the petitioner was deemed inapplicable due to the clarifications provided by the Explanation and the Finance Act.

Penalty Levy Challenge: In a separate petition, the petitioner challenged penalty proceedings under section 271(1)(c) on the grounds of lack of jurisdiction when block assessment proceedings were ongoing. The court dismissed this challenge, stating that the jurisdiction of the Assessing Officer to levy penalties during block assessment proceedings is valid, and the petitioner has statutory remedies against the penalty order. The court upheld that the grounds raised by the petitioner against the penalty levy were not sustainable, leading to the dismissal of this petition as well.

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