Assessment finality unaffected by subsequent search; concluded income-tax assessments do not abate and remain challengeable.

Where an assessment under the Income-tax Act was completed before a subsequent search, the search does not abate or supplant that concluded assessment; the statutory provision that operates on pending assessment proceedings applies only where assessment proceedings are pending at the time of search and mere pendency of an appeal does not amount to pending assessment proceedings. Consequently, additions and disallowances made in a concluded assessment remain operative and are open to challenge only by competent proceedings directed against that concluded assessment, not automatically converted into search-specific proceedings.

---

---

Issues: Whether an assessment framed under Section 143(3) of the Income-tax Act, 1961 for an assessment year stands abated by reason of a subsequent search under Section 132(1) of the Income-tax Act, 1961 when an appeal against that assessment is pending before the Commissioner of Income Tax (Appeals); and whether additions/disallowances made in the assessment survive and are open to challenge only under proceedings under Section 153A of the Income-tax Act, 1961.

Analysis: The assessment for the relevant assessment year was completed by order under Section 143(3) of the Income-tax Act, 1961 prior to the search under Section 132(1) of the Income-tax Act, 1961. The statutory text of Section 153A applies where assessment proceedings are pending at the time of search; mere pendency of an appeal before the Commissioner of Income Tax (Appeals) does not constitute pending assessment proceedings. The effect of the search is governed by whether the assessment itself was pending when the search took place. Where the assessment stands concluded at the time of search, Section 153A does not abate or supplant that concluded assessment and the additions/disallowances made in that concluded assessment remain in force unless otherwise set aside by competent proceedings.

Conclusion: The assessment framed under Section 143(3) of the Income-tax Act, 1961 did not abate on account of the subsequent search under Section 132(1) of the Income-tax Act, 1961 because the assessment was concluded at the time of search; the appeals challenging the disallowances therefore do not render the assessment abated. The appellant's challenge to the disallowance is dismissed; decision is in favour of the revenue.

---