Block assessment under Chapter XIV-B applies to post-30 June 1995 searches, displacing parallel regular assessment proceedings.

Chapter XIV-B of the Income-tax Act, 1961 applies to searches initiated after 30 June 1995, so a search conducted on 23 February 1996 attracted the block assessment procedure under section 158BC. The statutory definition of "block period" covered the ten previous years preceding the year of search, bringing assessment year 1993-94 within that period. Because a section 158BC notice had already been issued for that year, maintaining a parallel regular assessment would defeat the special block assessment mechanism; the notice and consequent regular assessment were therefore quashed, and the request relating to issuance of the notice became infructuous.

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Issues: Whether Chapter XIV-B of the Income-tax Act, 1961 applied to a search initiated on 23 February 1996 so as to require block assessment under section 158BC, and whether the regular assessment order for assessment year 1993-94 and the related notice could be quashed.

Analysis: Chapter XIV-B inserted by the Finance Act, 1995 with effect from 1 July 1995 governs searches initiated after 30 June 1995. The search in the case having been conducted on 23 February 1996, the special procedure for search cases applied. The definition of "block period" also covered the ten previous years preceding the previous year in which the search was conducted, so assessment year 1993-94 fell within the block period. Since notice under section 158BC had already been issued and the year 1993-94 was included in that notice, keeping the regular assessment order alive would create parallel proceedings and defeat the block assessment mechanism.

Conclusion: Chapter XIV-B applied to the search and the regular assessment proceedings for assessment year 1993-94 could not be sustained alongside the block assessment notice; the notice and consequent assessment were quashed, while the prayer relating to issuance of section 158BC notice had become infructuous.

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