Section 153A assessment does not render an earlier appeal infructuous; pending grounds must be decided on merits.

An appeal against an original assessment completed under section 143(3) does not become infructuous merely because a subsequent search leads to a separate assessment under section 153A. Applying the second proviso to section 153A, the earlier completed assessment did not abate, so the pending appeal survived and had to be decided on merits. The appellate authority was required to hear the assessee and adjudicate the grounds rather than dismiss the matter as infructuous. The dismissal was set aside and the matter remitted for merits-based disposal.

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Issues: Whether the appeal against the original assessment under section 143(3) of the Income-tax Act, 1961 became infructuous because of the subsequent search and the assessment made under section 153A of the Income-tax Act, 1961, and whether the appellate authority was required to decide the pending appeal on merits.

Analysis: The second proviso to section 153A was applied to hold that an assessment completed before the search does not abate merely because a search is subsequently conducted and a separate assessment is framed under section 153A. The earlier appeal therefore continued to survive and could not be treated as infructuous. The appellate authority was required to adjudicate the grounds on merits after giving the assessee an opportunity of hearing.

Conclusion: The appeal against the original assessment did not become infructuous, the order dismissing it was set aside, and the matter was remitted to the appellate authority for decision on merits.

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