Search and seizure: Abatement of assessment proceedings: Section 153A: A. Y. 2002- 03: Assessment or reassessment proceedings pending at the time of search abate: Appeal from assessment pending before Tribunal would not abate.

When the assessee’s appeal for the A. Y. 2002-03 was pending before the Tribunal, search proceedings were initiated against the assessee. The Tribunal passed the order as under:

 “i) The present appeal arises out of the assessment made prior to the date of search. The intention of the Legislature is to make a combined assessment of all the income disclosed or assessed in regular assessment and discovered in search. We accordingly restore the assessment to the file of the Assessing Officer to consider these additions in the assessment u/s. 153A as well. However, in an event where search is declared illegal by any court or the assessment u/s. 153A is held invalid, then this appeal in relation to regular assessment will revive at the instance of the Department, if an application is moved to the Tribunal in this behalf.

 ii) Accordingly, the appeal of the assessee was allowed, but for statistical purposes and subject to the observations made above.”

On appeal by the Revenue, the Allahabad High Court reversed the decision of the Tribunal and held as under:

“i) We are of the opinion that the Income Tax Appellate Tribunal erred in abating the regular assessment proceedings, which had become final, and restoring them as a consequence of search u/s. 132, and notice u/s. 153A of the Act to the file of the Assessing Officer.

ii) The appeal is allowed. The order of the Tribunal is set aside. The Tribunal will decide the appeal on the merits in accordance with law.”