Search assessment must follow reassessment route under section 148 with prior approval; scrutiny assessment held without jurisdiction.

After a search under section 132, a pending year's assessment could not continue as a normal scrutiny under section 143(3) where search material existed relating to the assessee. The special reassessment route under section 148, with prior approval under section 148B, was treated as the mandatory statutory channel. On that basis, completion of the assessment under section 143(3) was regarded as lacking valid jurisdiction and the assessment was quashed, while the remaining merits grounds were treated as academic.

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Issues: Whether, after a search under section 132 of the Income-tax Act, 1961, the Assessing Officer could validly complete the year's assessment under section 143(3) without issuing notice under section 148 and obtaining the requisite approval under section 148B.

Analysis: The assessment year was already pending when the search took place. The decision proceeds on the footing that, once search material existed relating to the assessee, the assessment could not continue as a normal scrutiny under section 143(3). The special reassessment route under section 148, with prior approval under section 148B, was treated as the mandatory statutory channel. On that reasoning, continuation of proceedings under section 143(3) was held to be without valid jurisdiction, and the assessment was quashed. Since the legal ground succeeded, the remaining grounds on merits were treated as academic.

Conclusion: The assessment under section 143(3) was invalid for want of proper jurisdiction after the search, and the assessee succeeded on the legal ground.

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