Search-based exclusion under the tax settlement scheme cannot be invoked where assessment records show survey proceedings instead.

A beneficial tax settlement scheme exclusion cannot be applied on an unsubstantiated assumption that the assessment arose from a search under section 132 or 132A when the assessment record shows origin in a survey under section 133A. On the disclosed material, the statutory bar in section 96 was confined to specified search-linked assessments and did not extend to survey-based proceedings. The rejection of the declaration on a search-based footing was therefore unsustainable, and the matter was remitted for fresh consideration on the available record.

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Issues: (i) Whether the rejection of the assessee's declaration under the Direct Tax Vivad Se Vishwas Scheme, 2024 was justified on the premise that the assessment had arisen from a search initiated under section 132 of the Income-tax Act, 1961; (ii) Whether the exclusion in section 96 of the Scheme could be invoked where the material on record showed that the proceedings had originated from a survey under section 133A of the Income-tax Act, 1961.

Issue (i): Whether the rejection of the assessee's declaration under the Direct Tax Vivad Se Vishwas Scheme, 2024 was justified on the premise that the assessment had arisen from a search initiated under section 132 of the Income-tax Act, 1961.

Analysis: Section 96 of the Scheme excludes specified categories of tax arrears, including assessments made under sections 143(3), 144, 147, 153A or 153C of the Income-tax Act, 1961 where such assessment is on the basis of a search initiated under section 132 or section 132A. The assessment order itself disclosed that the proceedings had been processed from a survey operation under section 133A, and there was no material indicating that the case originated from a search under section 132 or section 132A. In the absence of such material, the authority could not treat the matter as falling within the statutory exclusion.

Conclusion: The rejection on the footing of a search-based assessment was not justified and was against the petitioner.

Issue (ii): Whether the exclusion in section 96 of the Scheme could be invoked where the material on record showed that the proceedings had originated from a survey under section 133A of the Income-tax Act, 1961.

Analysis: The scheme text relied upon by the authority did not cover proceedings initiated on the basis of a survey under section 133A. The impugned rejection proceeded on an erroneous factual assumption and lacked proper reasons to displace the explicit foundation disclosed in the assessment order. Since the statutory embargo was confined to search-linked cases and not to survey-based proceedings, the authority's view could not be sustained.

Conclusion: The exclusion under section 96 did not apply to the petitioner's case and the impugned order was unsustainable.

Final Conclusion: The impugned rejection was set aside and the matter was sent back for a fresh decision on the material available before the Scheme authority.

Ratio Decidendi: A statutory exclusion from a beneficial scheme cannot be invoked on the basis of an unsubstantiated assumption of a search when the assessment record itself shows that the proceedings arose from a survey and the scheme does not exclude survey-based cases.

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