Strict reading of tax settlement exclusions: search-based bar could not be extended to survey-based reassessment.

A tax settlement scheme exclusion must be applied strictly to its express terms: the search-based bar under section 96(a)(i) applies only where the reassessment is founded on a search under sections 132 or 132A. Where earlier proceedings under section 153C had been dropped and the reassessment proceeded instead on survey material under section 133A, the exclusion could not be extended by implication. Search and survey are distinct proceedings, and the scheme contained no express bar for survey-based reassessments. The rejection of the declarations was therefore unjustified, and the writ petitions succeeded with directions to accept the declarations and issue the required forms.

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Issues: Whether a declaration under the Direct Tax Vivad se Vishwas Scheme, 2024 could be rejected under the search-based exclusion clause when the earlier proceedings under section 153C of the Income-tax Act, 1961 had been dropped and the reassessment ultimately proceeded under section 147 on the basis of survey material under section 133A.

Analysis: The exclusion in section 96(a)(i) applies only where the assessment is made under the specified reassessment provisions on the basis of search initiated under section 132 or section 132A of the Income-tax Act, 1961. The prior proceedings under section 153C were themselves dropped, and the impugned reassessment order treated the matter as one arising from survey material under section 133A, not from a search-based reassessment. The Scheme does not contain any exclusion for cases founded on survey action, and such a restriction cannot be read into the statutory text by implication. Search and survey are distinct legal proceedings, and the more stringent search-based bar cannot be extended to a survey-based reassessment in the absence of express language.

Conclusion: The rejection of the petitioner's declaration under the Scheme was unjustified and unsustainable.

Final Conclusion: The writ petitions succeeded, the impugned rejection orders were quashed, and the respondent was directed to accept the declarations and issue the requisite statutory forms.

Ratio Decidendi: A statutory exclusion in a tax settlement scheme must be applied strictly according to its express terms, and cannot be extended by implication to reassessments based on survey material where the scheme excludes only search-based cases.

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