Pending assessments abate when a search under Section 132 is initiated, and the Assessing Officer loses jurisdiction to finalize assessments for the assessment years falling within the block period unless incriminating material is found.

JUDGMENT :

Assailing the legality and propriety of Assessment Order dated 17.03.2025 (Annexure-27) passed in the Assessment Unit, Income Tax Department under Section 143(3) read with Section 260 and Section 144B of the Income Tax Act, 1961 pertaining to the Assessment Year 2022-23, as also consequential further orders imposing penalties by initiating proceedings under Section 270A, Section 271A, Section 271B and Section 272A(l)(d) read with Section 274, the petitioner has approached this Court by way of filing this writ petition craving to invoke extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India.

1.1. A seminal issue whether the Assessing Officer has jurisdiction to pass the Assessment Order dated17.03.2025 as also the consequential orders imposing penalties inasmuch as these orders are passed contrary to avowed purport of sub-section (2) of Section 158BA of the Income Tax Act, 1961.

Facts:

2. Shorn off irrelevant particulars adumbrated in the writ petition, suffice it to catalogue hereunder necessary factual details to address the issue raised in the writ petition.

2.1. The case of the petitioner being selected for the purpose of faceless assessment/reassessment with respect to the Assessment Year 2022-23, an intimation dated 01.06.2023 was issued invoking provisions of Section 144B of the Income Tax Act, 1961 (for brevity be referred to as, "IT Act"). On acknowledging filing of return of income on 08.10.2022 for the Assessment Year 2022-23 (relevant Finance Year being 2021-22), a Notice dated 01.06.2023 under Section 143(2) of the IT Act was issued seeking clarification on certain issues and the petitioner was instructed to produce evidence and the petitioner's return was selected for scrutiny. After seeking for adjournments on different dates when the proceeding was continuing, on certain dates the petitioner has claimed to have proffered explanations with evidence to meet the query of the Assessing Officer.The petitioner has stated to have complied with terms of notice(s) under Section 142(1) for production of documents, though partially.

2.2. To a Notice dated 01.03.2024 under Section 142 issued, the petitioner while submitting his reply on 05.03.2024 requested for personal hearing. The petitioner was issued a Show Cause Notice dated 14.03.2024, whereby it was stipulated as to why the proposed variation to the reply furnished by him on 26.09.2023 would not be made and was directed to show cause why the variations proposed should not be added to the income. In response thereto, re-submitting the documents, a detailed reply was given on 19.03.2024 with request to grant opportunity of personal hearing. Having not granted such opportunity, the Assessing Officer issued Assessment Order dated 21.03.2024 under Section 143(3) read with Section 144B in which a total demand of Rs.7,79,86,085/- was raised. Aggrieved thereby, the petitioner assailed the aforesaid Assessment Order before this Court by way of a petition under Articles 226 and 227 of the Constitution of India which was registered as W.P.(C) No.11561 of 2024 and was disposed of vide Order dated 09.05.2024 with a direction to the Assessing Officer for fresh adjudication after affording proper opportunity of personal hearing. The petitioner, therefore, was issued an intimation dated29.07.2024 for completion of assessment in accordance with the procedure laid down in Section 144B. Said intimation shows that the case of the petitioner for Assessment Year 2022-23 has been selected for the purpose of faceless assessment. A Notice dated 16.09.2024 under Section 142(1) of the IT Act was served with direction to furnish documents before 30.09.2024 and another N