Validity of search proceedings can be examined in appeal against an assessment based on those operations.

The appellate authority under Section 246A of the Income-tax Act, 1961 can examine the validity of search proceedings under Section 132 when the assessment order under challenge is founded on those search operations. The Court treated the legality of the search as an issue that is not excluded from appellate consideration in such a case, because it is directly linked to the assessment's foundation. On that basis, no interference was called for and the challenge was not accepted.

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Issues: Whether the Commissioner of Income Tax (Appeals) can examine the validity of search proceedings under Section 132 of the Income-tax Act, 1961 while dealing with an appeal against an assessment order founded on such search operations.

Analysis: The Court held that where the assessment order itself is under challenge and is based on search operations, the validity of the search proceedings is not excluded from consideration by the appellate authority under Section 246-A of the Income-tax Act, 1961. On that basis, no ground was found to interfere with the impugned order.

Conclusion: The Commissioner of Income Tax (Appeals) has jurisdiction to examine the validity of the search proceedings in such an appeal, and the challenge raised by the petitioners was not accepted.

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