Block assessment under the search-linked regime subsumes prior completed assessments, producing a single determination of total income.

The note explains that initiation of a search triggers a block assessment regime requiring notice and returns for the relevant six-year block; only proceedings pending at the time of search abate, while completed subsisting assessment orders do not abate but may be reopened and reassessed under the block assessment framework. Where a valid block assessment order is thereafter passed, it effects a single determination of total income for the block and subsumes earlier completed assessment orders for the same year, rendering them inoperative to the extent they overlap; consequently the later block order governs the tax position for that year.

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Issues: (i) Whether the assessment order dated 29.12.2008 passed under Section 143(3) stood abated on initiation of search and subsequent proceedings; (ii) Whether the fresh assessment order dated 26.12.2011 passed under Section 153A for the block assessment period re-opened and merged the earlier assessment order for Assessment Year 2006-07.

Issue (i): Whether the assessment order dated 29.12.2008 stood abated on initiation of search and subsequent proceedings.

Analysis: Section 153A requires notice and return for each of the six assessment years following a search or requisition; the second proviso to sub section (1) of Section 153A provides that pending assessment or reassessment proceedings at the time of initiation of the search shall abate. Where assessments have already been completed and the orders subsist at the time of search, abatement does not apply; instead the Assessing Officer may reopen or reassess those completed assessments under Section 153A subject to the regime linked to search and incriminating material. The distinction between pending proceedings (which abate) and completed subsisting assessment orders (which do not abate but may be reopened under Section 153A) governs the legal position.

Conclusion: Issue (i) is answered against the assessee; the assessment dated 29.12.2008 did not abate on the initiation of search.

Issue (ii): Whether the fresh assessment order dated 26.12.2011 under Section 153A re-opened and merged the earlier assessment order for Assessment Year 2006-07.

Analysis: Under the Section 153A scheme the object is a single determination of total income for the six year block linked to search; when a valid search triggers a block assessment and the Assessing Officer passes fresh assessment orders for the relevant years, the subsequent block assessment subsumes prior assessment orders for those years, rendering earlier orders infructuous or inoperative to the extent they relate to the same assessment year and total income. Where the subsequent order does not disallow an item previously disallowed, the position in the subsequent order prevails.

Conclusion: Issue (ii) is answered in favour of the assessee; the assessment dated 29.12.2008 stood re-opened and merged into the subsequent assessment order dated 26.12.2011 and became inoperative for Assessment Year 2006-07.

Final Conclusion: The appeal is allowed; the impugned order of the Tribunal dated 16.12.2024 is set aside and the subsequent block assessment order dated 26.12.2011 governs the tax position for Assessment Year 2006-07.

Ratio Decidendi: A valid assessment order passed under Section 153A of the Income-tax Act, 1961 for the block assessment period effects a single determination of total income for the relevant assessment year and renders any prior completed assessment order inoperative for that year, while only pending assessment or reassessment proceedings at the time of search abate under the second proviso to sub section (1) of Section 153A.

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