Search-based block assessment bars reassessment where reopening rests on the same material and objections are not decided by speaking order.

Reassessment under section 147 was not sustainable where the income relied on for reopening was already reflected in search material covered by block assessment proceedings under Chapter XIV-B. The recorded reasons concerned items such as bank deposits, rental income, expenses and job income, but these were already part of the search-based material, so the special block assessment scheme applied and section 147 could not be used for the same income. The reopening was also vitiated because the Assessing Officer did not dispose of the assessee's objections by a speaking order before completing the reassessment. On that basis, the notice under section 148 and the consequential assessment were treated as invalid.

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Issues: Whether reassessment initiated under section 147 of the Income-tax Act, 1961, pursuant to notice under section 148, was valid when the escaped income had already arisen from search material covered by block assessment proceedings and the Assessing Officer failed to dispose of the assessee's objections by a speaking order.

Analysis: The reasons recorded for reopening related to deposits in bank accounts, rental income, telephone expenses, rent payments, purchase of silver, and job income, all of which were already part of the block assessment material. In such circumstances, the special scheme of Chapter XIV-B applied and reassessment under section 147 could not be used for income found as a result of search. The assessee had also sought the recorded reasons and objected to the reopening, but the Assessing Officer did not pass any reasoned order deciding those objections before framing the reassessment. The reopening was thus found to suffer from jurisdictional and procedural infirmity.

Conclusion: The reassessment notice under section 148 and the consequential assessment were held invalid, and the assessee succeeded on this issue.

Final Conclusion: The reassessment could not be sustained in law because the income was covered by search-based block assessment proceedings and the objections to reopening were not disposed of in the manner required by law.

Ratio Decidendi: Where income forming the basis of reopening is already attributable to search material governed by the special block assessment scheme, and the Assessing Officer does not first dispose of the assessee's objections by a speaking order, reassessment under section 147 cannot be sustained.

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