As per case facts, the Petitioner's assessment for AY 2022-23 was set aside by the High Court for lack of personal hearing and remitted for fresh adjudication. During this process, ...
WP(C) No.30861 of 2025 Page 1 of 65
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.30861 of 2025
In the matter of an Application under Articles 226 and 227
of the Constitution of India, 1950
***
Saroj Kumar Sahoo
Aged about 49 years
Son of Khyamakar Sahoo
Residence at: Mochibandh
Madhapur S.O., Kendujhar Town
Kendujhar
Odisha – 758 001 … Petitioner
-VERSUS-
1. National Faceless Assessment Centre
Assessment Unit
Income Tax Department
New Delhi.
2. Assistant Commissioner of Income Tax
Central Circle 2 BBN
Office of the Assistant Commissioner of Income Tax
Aayakar Bhawan, Bhubaneswar
Odisha – 751 007 ... Opposite parties
Counsel appeared for the parties:
For the Petitioner : M/s. Saswat Kumar Acharya,
Jaish Joshi, Abhijeet Agarwal
and Dhiren Chaudhary,
Advocates
WP(C) No.30861 of 2025 Page 2 of 65
For the Opposite parties : Mr. Subash Chandra Mohanty,
Senior Standing Counsel
Assisted by
Mr. Avinash Kedia,
Junior Standing Counsel
Income Tax Department
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDON
AND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMAN
Date of Hearing : 04.12.2025 :: Date of Judgment :18.02.2026
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 dated
WP(C) No.30861 of 2025 Page 3 of 65
17.03.2025 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.
WP(C) No.30861 of 2025 Page 4 of 65
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 dated
WP(C) No.30861 of 2025 Page 5 of 65
29.07.2024 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 Notice dated 04.10.2024 under
Section 142(1) of the IT Act was issued. The petitioner
submitted partial compliance with written submission
dated 11.10.2024.
2.3. While the proceeding for assessment with respect to
Assessment Year 2022-23 in connection with Notice
under Section 143 was pending adjudication, a search
operation under Section 132 of the IT Act, 1961 was
commenced on 26.11.2024 and concluded on
28.11.2024.
2.4. Notwithstanding the assessment proceeding by issue of
Notice for assessment under Section 143 being abated in
terms of Section 158BA(2) of Chapter XIV-B of the IT
Act, the petitioner was issued a reminder letter on
17.01.2025 and 29.01.2025 in which it was directed to
respond to the notices under Section 142(1) of the Act
dated 16.09.2024 and 04.10.2024. The petitioner on
05.02.2025 was issued a Show Cause Notice whereby an
opportunity was given to show cause as to why the
WP(C) No.30861 of 2025 Page 6 of 65
assessment should not be completed under Section 144
on the basis of material available on record. A response
to the said notice was submitted with detailed reply
thereto on 10.02.2025.
2.5. While the matter stood thus, in connection with the
search proceedings, the Deputy Director of Income Tax/
ADIT (Inv.), 1(2), Bhubaneswar sent a summons notice
dated 07.02.2025 to the petitioner under Section
131(1A) of the IT Act. However, the petitioner on
14.02.2025 was issued another Notice under Section
142(1) of the IT Act from the Assessment Unit, Income
Tax Department in which he was directed to furnish
documents on or before 20.02.2025. The petitioner
responded to it and submitted a written note along with
the documents on 20.02.2025. The petitioner on
25.02.2025 was issued another Notice to show cause as
to why the proposed variation would not be made under
Section 144. This apart, the petitioner on 25.02.2025
was issued a Notice under Section 142(1) of the IT Act in
which he was directed to furnish documents on or before
28.02.2025. Though in compliance thereto documents
were submitted on 28.02.2025, on request of the
petitioner proceeding stood adjourned to 03.03.2025.
The petitioner on 03.03.2025 was issued further notice
indicating as to why the proposed variation would not be
made. An opportunity was given therein to show cause
WP(C) No.30861 of 2025 Page 7 of 65
on or before 10.03.2025. On the ground of illness of the
petitioner, on his request for adjournment the
proceeding moved further to 12.03.2025. The petitioner‘s
request for adjournment on 12.03.2025 got rejected. An
Assessment Order dated 17.03.2025 has been passed in
the Assessment Unit of the Income Tax Department
under Section l43(3) read with Section 260 and Section
144B of the IT Act, for Assessment Year 2022-23 and
said order accompanied Demand Notice dated
17.03.2025 under Section 156 in which a total demand
of Rs.45,20,09,261/- was directed to be discharged.
2.6. In furtherance to the aforementioned impugned
Assessment Order, proceedings for imposition of
penalties under various provisions being initiated,
separate orders have been passed imposing penalties
under Section 270A, Section 271A, Section 271B and
Section 272A(l)(d) of the IT Act.
2.7. Questioning the legal sanctity and sustainability of the
Assessment Order, the writ petition has been pursued
by raising contention that since the assessment under
Section 143 was pending as on the date of search under
Section 132 or requisition being made under Section
132A, in view of sub-section (2) of Section 158BA of
Chapter XIV-B of the IT Act the Assessing Officer ceases
to have jurisdiction to proceed with pending assessment
and, therefore, the Assessment Order should be treated
WP(C) No.30861 of 2025 Page 8 of 65
abated. This writ petition is maintainable and liable to
be entertained by application of principles reiterated in
Radha Krishan Industries Vrs. State of H.P., 2021 SCC
Online SC 334, by the Hon‘ble Supreme Court of India
referring to Whirlpool Corporation Vrs. Registrar of Trade
Marks (1998) 8 SCC 1, wherein following exceptions have
been carved out:
―28. The principles of law which emerge are that:
***
(iii) Exceptions to the rule of alternate remedy arise
where—
(a) the writ petition has been filed for the
enforcement of a fundamental right
protected by Part III of the Constitution;
(b) there has been a violation of the
principles of natural justice;
(c) the order or proceedings are wholly
without jurisdiction; or
(d) the vires of a legislation is challenged;
***‖
2.8. As the Assessing Officer lacks jurisdiction to proceed till
culmination of ―block assessment‖ defined under Section
158BA, it is posed in the writ petition that the exercise of
power under Section 143(3) to pass impugned
WP(C) No.30861 of 2025 Page 9 of 65
Assessment Order is contrary to express provisions
contained in Section 158BA.
Arguments advanced by the counsel for the petitioner:
3. With the aforesaid backdrop of factual matrix, Sri
Saswat Kumar Acharya, learned Advocate submitted
that Section 158BA under Chapter XIV-B of the IT Act
has been brought into the statute book with effect from
01.09.2024 by which a special procedure for assessment
of material unearthed during the course of search has
been provided. Pertinently, Section 158BA(2) specifically
states that despite anything contained in any other
provisions of the IT Act, if any, assessment or
reassessment or re-computation under the provisions of
the IT Act (except under Chapter XIVB) pertaining to any
assessment year falling in the block period, pending on
the date of initiation of the search under Section 132 or
132A of IT Act shall abate and shall be deemed to have
been abated on the date of search or making of
requisition.
3.1. Amplifying his argument, Sri Saswat Kumar Acharya,
learned Advocate would demonstrate that the
proceedings pertaining to the impugned Assessment
Order were pending on the date on which search was
conducted (i.e., 26.11.2024) which is after the date from
which Section 158BA came into effect (i.e., 01.09.2024).
WP(C) No.30861 of 2025 Page 10 of 65
3.2. Referring to paragraph 9 of the writ petition, it is sought
to be impressed upon that since the assessment for
Assessment Year 2022-23 was pending on 26.11.2024,
i.e., the date on which the search under Section 132 was
initiated, by operation of law, such pending assessment
stood automatically abated as per Section 158BA. In
other words, no assessment could have been completed
under Section 143(3) read with Section 144B in respect
of the said assessment year.
3.3. Learned counsel for the petitioner, therefore, vehemently
contended that in view of such explicit provisions
contained in sub-section (2) of Section 158BA of the IT
Act, the proceeding initiated by issue of Notice under
Section 143 should have been treated as abated.
3.4. To bolster his argument, the learned counsel placed
reliance on Principal Commissioner of Income Tax Vrs.
Abhisar Buildwell Private Limited, (2024) 2 SCC 433, and
vociferously submitted that illegality is writ large on the
face of the Assessment Order dated 17.03.2025, passed
in the Assessment Unit, Income Tax Department, despite
knowledge about a search being conducted under
Section 132 having been initiated on 26.11.2024, which
fact is glaringly available on ―Panchanama‖ dated
28.11.2024; nevertheless, the Assessing Officer
proceeded to issue the impugned order.
WP(C) No.30861 of 2025 Page 11 of 65
Hearing:
4. Though short point is involved in the matter as to
whether the Assessing Officer has the jurisdiction to
proceed to finalise the assessment for the Assessment
Year 2022-23 (Previous Year 2021-22), initiated prior to
search operation conducted under Section 132 of the IT
Act in view of explicit provision contained in sub-section
(2) of Section 158BA, and copy of writ petition was
served on the learned Senior Standing Counsel Sri
Subash Chandra Mohanty, way back on 27.10.2025, no
instructions appears to have been supplied by the
Income Tax Department.
4.1. Appreciating the apprehension of the learned Advocate
on behalf of the petitioner for the steps contemplated to
be taken up by the Department for recovery of
demanded tax and penalties, it was felt prudent to
proceed with the matter on the basis of arguments
advanced on the question of law as posed above.
4.2. Since the issue posits question of law emanating from
the facts pleaded in the writ petition and it was conceded
by the learned Advocate for the petitioner Sri Saswat
Kumar Acharya that in the event no incriminating
material is found in course of search operation, the
Revenue is not remediless, but it is protected to revive
WP(C) No.30861 of 2025 Page 12 of 65
the abated proceeding(s), no fruitful purpose would be
subserved in keeping this writ petition pending.
4.3. This Court on the above limited question heard counsel
for both the sides.
Consideration of pleadings and discussion:
5. The pleadings on record would suggest no disputed facts
inasmuch as the same are supported by documentary
evidence. The relevant dates necessary for adjudication
of the present case are not objected to.
5.1. The Assessment Year in question is 2022-23 with
respect to which Assessment Order dated 17.03.2025
(Annexure-27) has been passed under Section 143(3)
read with Section 260 and Section 144B of the IT Act. In
addition thereto, separate orders are passed imposing
penalties invoking Section 270A, Section 271A, Section
271B and Section 272A(l)(d) of the IT Act
5.2. Having set aside the Assessment Order dated
21.03.2024 (Annexure-12) in W.P.(C) No.11561 of 2024
vide Order dated 09.05.2024 for want of personal
hearing (audi alteram partem), this Court remitted the
matter for adjudication afresh.
5.3. It is well-settled principle of law, as reiterated by the
Supreme Court of India in Shri Anant R. Kulkarni Vrs.
WP(C) No.30861 of 2025 Page 13 of 65
Y.P. Education Society, (2013) 6 SCR 1124 qua the effect
of setting aside an order, that:
―It is a settled legal proposition that, once the Court
sets aside an order of punishment on the ground,
that the enquiry was not properly conducted, the
Court should not severely preclude the employer
from holding the inquiry in accordance with law. It
must remit the concerned case to the disciplinary
authority, to conduct the enquiry from the point
that it stood vitiated, and to conclude the same in
accordance with law. However, resorting to such a
course depends upon the gravity of delinquency involved.
Thus, the court must examine the magnitude of
misconduct alleged against the delinquent employee. It is
in view of this, that courts/tribunals, are not competent to
quash the charge-sheet and related disciplinary
proceedings, before the same are concluded, on the
aforementioned grounds. (Vide: Managing Director, ECIL,
Hyderabad etc. etc. Vrs. B. Karunakar etc. etc., AIR 1994
SC 1074; Hiran Mayee Bhattacharyya Vrs. Secretary,
S.M. School for Girls, (2002) 10 SCC 293; U.P. State
Spinning C. Ltd. Vrs. R.S. Pandey, (2005) 8 SCC 264; and
Union of India Vrs. Y.S. Sandhu, Ex-Inspector, AIR 2009
SC 161).‖
5.4. A reference to Anantdeep Singh Vrs. The High Court of
Punjab and Haryana at Chandigarh, (2024) 9 SCR 135
may not be inept in the present context, wherein it has
been stated thus:
―Once the termination order is set aside and judgment of
the High Court dismissing the writ petition challenging the
said termination order has also been set aside, the
WP(C) No.30861 of 2025 Page 14 of 65
natural consequence is that the employee should be taken
back in service and thereafter proceeded with as per the
directions. Once the termination order is set aside
then the employee is deemed to be in service. We find
no justification in the inaction of the High Court and also
the State in not taking back the appellant into service
after the order dated 20.04.2022. No decision was taken
either by the High Court or by the State of taking back the
appellant into service and no decision was made
regarding the back wages from the date the termination
order had been passed till the date of reinstatement
which should be the date of the judgment of this Court. In
any case, the appellant was entitled to salary from the
date of judgment dated 20.04.2022 till fresh termination
order was passed on 02.04.2024. The appellant would
thus be entitled to full salary for the above period to be
calculated with all benefits admissible treating the
appellant to be in continuous service.‖
5.5. If an order is quashed for breach of natural justice, it
does not mean that proceedings are terminated;
nonetheless, they are restored to the position before
such breach occurred.
5.6. In the instant case, since the Assessing Officer is
proceeding to assess the petitioner under Section 143 of
the IT Act pursuant to order of remit by this Court, it
can be said that the proceeding is pending as on the
date of search stated to have conducted under Section
132. The copy of Panchanama vide Annexure-17 evinces
that the search under Section 132 of the IT Act
commenced on 26.11.2024 and concluded on
WP(C) No.30861 of 2025 Page 15 of 65
28.11.2024. Summons dated 07.02.2025 under Section
131(1A) was by the DDIT/ADIT (Inv), 1(2), Bhubaneswar
(Annexure-20) to the petitioner-Saroj Kumar Sahoo
directing production of documents pertaining to periods
from Financial Year 2018-19 till the date of issue of
summons and personal deposition. In furtherance
thereto subsequent notice dated 03.04.2025 by the said
authority was issued. Thus, when this Court has set
aside the Assessment Order dated 21.03.2024 of the
Assessing Officer on the ground of non-adherence to
principle of audi alteram partem, the proceeding for
assessment under Section 143 for the Assessment Year
2022-23 is said to be pending as on the date of
commencement of search under Section 132 of the IT
Act.
Provisions of the IT Act:
6. At this juncture it is felt necessary to take note of
relevant provisions as amended up-to-date.
Amendments carried in Section 158B and Section
158BA of the Income Tax Act, 1961 by virtue of the
Finance (No.2) Act, 2024 (No.15 of 2024) and the
Finance Act, 2025 (No.7 of 2025), so far as relevant, run
thus:
―Chapter-I
Preliminary
WP(C) No.30861 of 2025 Page 16 of 65
1. Short title and commencement.—
(1) This Act may be called the Finance (No. 2) Act, 2024.
(2) Save as otherwise provided in this Act,––
(a) Sections 2 to 87 shall be deemed to have come
into force on the 1
st day of April, 2024;
(b) Sections 114 to 157 shall come into force on
such date as the Central Government may, by
notification in the Official Gazette, appoint.
***
Chapter-III
Direct Taxes
Income-Tax
***
49. Substitution of new Chapter for Chapter XIV-B.—
For Chapter XIV-B of the Income-tax Act, the
following Chapter shall be substituted with effect
from the 1st day of September, 2024, namely:—
‗Chapter XIV-B
Special Procedure for Assessment of Search Cases
158B.In this Chapter, unless the context otherwise
requires,—
(a) ―block period‖ means the period
comprising previous years relevant to six
assessment years preceding the
previous year in which the search was
initiated under Section 132 or any
requisition was made under Section 132A
and also includes the period starting from
WP(C) No.30861 of 2025 Page 17 of 65
the 1st day of April of the previous year in
which search was initiated or requisition
was made and ending on the date of the
execution of the last of the authorisations
for such search or such requisition;
(b) ―undisclosed income‖ includes any
money, bullion, jewellery
1[, virtual digital
asset] or other valuable article or thing or
any expenditure or any income based on
any entry in the books of account or other
documents or transactions, where such
money, bullion, jewellery,
2[, virtual digital
asset] valuable article, thing, entry in the
books of account or other document or
transaction represents wholly or partly
income or property which has not been or
would not have been disclosed for the
purposes of this Act, or any expense,
exemption, deduction or allowance
claimed under this Act which is found to
be incorrect, in respect of the block period.
Explanation. —
For the purposes of this Chapter, the last of the
authorisations shall be deemed to have been
executed,—
(a) in the case of search, on the conclusion of
search as recorded in the last panchnama
drawn in relation to any person in whose
1
Inserted by Finance Act, 2025 (No.7 of 2025), with retrospective effect
from 01.02.2025.
2
Inserted by Finance Act, 2025 (No.7 of 2025), with retrospective effect
from 01.02.2025.
WP(C) No.30861 of 2025 Page 18 of 65
case the warrant of authorisation has
been issued;
(b) in the case of requisition under Section
132A, on the actual receipt of the books of
account or other documents or assets by
the Authorised Officer.
158BA.Assessment of
3[total undisclosed income] as
a result of search.—
(1) Notwithstanding anything in any other
provisions of this Act, where on or after the
1st day of September, 2024, a search is
initiated under Section 132, or books of
account, other documents or any assets are
requisitioned under Section 132A, in the case
of any person, then, the Assessing Officer shall
proceed to assess or reassess the
4[total
undisclosed income] of the block period in
accordance with the provisions of this Chapter.
(2) The assessment or reassessment or
recomputation under the provisions of this
Act (other than this Chapter), if any,
pertaining to any assessment year falling
in the block period, pending on the date of
initiation of the search under Section 132,
or making of requisition under Section
132A, as the case may be, shall abate and
shall be deemed to have abated on the
date of initiation of search or making of
requisition.
3
Substitu ted ―total income‖ by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024.
4
Substituted ―total income‖ by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024.
WP(C) No.30861 of 2025 Page 19 of 65
(3) Where during the course of any pending
proceeding for the assessment or reassessment
or recomputation under the provisions of this
Act (other than this Chapter), a reference under
sub-section (1) of Section 92CA has been made,
or an order under sub-section (3) of Section
92CA has been passed, such assessment or
reassessment or recomputation, along with
such reference made or order passed, as the
case may be, shall also abate and shall be
deemed to have abated on the date of initiation
of search or making of requisition.
(4) Where any assessment under the provisions of
this Chapter is
5[required to be made] in the
case of an assessee in whose case a
subsequent search is initiated, or a requisition
is made, such assessment shall be duly
completed, and thereafter, the assessment in
respect of such subsequent search or
requisition shall be made under the provisions
of this Chapter:
Provided that in a case where the period of
completing the assessment in respect of
subsequent search is less than three months
such period shall be extended to three months
from the end of the month in which the
assessment in respect of the earlier search was
completed.
(5) If any proceeding initiated under this
Chapter or any order of assessment or
reassessment made under clause (c) of sub-
5
Substituted ―pending‖ by Finance Act, 2025 ( No.7 of 2025), with
retrospective effect from 01.09.2024.
WP(C) No.30861 of 2025 Page 20 of 65
section (1) of Section 158BC has been
annulled in appeal or any other legal
proceeding, then, notwithstanding
anything in this Chapter or Section 153,
6[the assessment or reassessment or
recomputation or reference or order
relating to any assessment year] which
has abated under sub-section (2) or sub-
section (3), shall revive with effect from
the date of receipt of the order of such
annulment by the Principal Commissioner
or Commissioner:
Provided that such revival shall cease to have
effect, if such order of annulment is set aside.
(6) The total income (other than undisclosed
income) of the assessment year relevant to the
previous year in which the last of the
authorisations for a search is executed or a
requisition is made, shall be assessed
separately in accordance with the other
provisions of this Act.
(7) The
7[total undisclosed income] relating to the
block period shall be charged to tax, at the rate
specified in Section 113, as income of the block
period irrespective of the previous year or years
to which such income relates.
6
Substituted ―the assessment or reassessment relating to any assessment
year‖ by Finance Act, 2025 (No.7 of 2025), with retrospective effect from
01.09.2024.
7
Substituted ―total income‖ by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024.
WP(C) No.30861 of 2025 Page 21 of 65
158BB. Computation of [total undisclosed
income]
8 of block period.—
9[(1) The total undisclosed income referred to in sub-
section (1) of Section 158BA of the block period
shall be the aggregate of the following,
namely:––
(a) undisclosed income declared in the return
furnished under Section 158BC;
(b) undisclosed income determined by the
Assessing Officer under sub-section (2).
(1A) The following income shall not be included
in the total undisclosed income of the
block period, namely:––
(a) the total income determined under sub-section
(1) of Section 143 or assessed under Section
143 or Section 144 or Section 147 or Section
153A or Section 153C or assessed earlier
8
Substituted ―total income‖ by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024.
9
Substituted the following appearing in sub-section (1) by Finance Act,
2025 (No.7 of 2025), with retrospective effect from 01.09.2024:
―[(1) The total income referred to in sub-section (1) of Section 158BA of
the block period shall be the aggregate of the following, namely:––
(i) total income disclosed in the return furnished under Section
158BC;
(ii) total income assessed under sub-section (3) of Section 143 or
Section 144 or Section 147 or Section 153A or Section 153C prior to
the date of initiation of the search or the date of requisition, as the
case may be;
(iii) total income declared in the return of income filed under Section
139 or in response to a notice under sub-section (1) of Section 142
or Section 148 and not covered under clause (i) or clause (ii);
(iv) total income determined where the previous year has not ended,
on the basis of entries relating to such income or transactions as
recorded in the books of account and other documents maintained
in the normal course on or before the date of last of the
authorisations for the search or requisition relating to such
previous year;
(v) undisclosed income determined by the Assessing Officer under
sub-section (2).‖
WP(C) No.30861 of 2025 Page 22 of 65
under clause (c) of sub-section (1) of Section
158BC or sub-section (4) of Section 245D, prior
to the date of initiation of the search or the date
of requisition, in respect of any of the previous
year comprising the block period;
(b) the total income declared in the return of
income filed under Section 139 or in response
to a notice under sub-section (1) of Section 142,
prior to the date of initiation of the search or
the date of requisition, in respect of any of the
previous year comprising the block period, and
not covered under clause (a);
(c) the income computed by the assessee, in
respect of––
(i) a previous year, where such previous
year has ended and the due date for
furnishing the return for such year has
not expired prior to the date of initiation of
the search or the date of requisition, on
the basis of entries relating to such
income or transactions as recorded in the
books of account and other documents
maintained in the normal course before
the date of initiation of search or the date
of requisition;
(ii) the period commencing from the 1st day
of April of the previous year in which the
search is initiated or requisition is made
and ending on the day immediately
preceding the date of initiation of search
or requisition, on the basis of entries
relating to such income or transactions as
WP(C) No.30861 of 2025 Page 23 of 65
recorded in the books of account and
other documents maintained in the
normal course for such period on or before
the day immediately preceding the date of
initiation of search or the date of
requisition;
(iii) the period commencing from the date of
initiation of the search or the date of
requisition and ending on the date of the
execution of the last of the authorisations
for search or requisition, on the basis of
entries relating to such income or
transactions as recorded in the books of
account and other documents maintained
in the normal course for such period on or
before the date of the execution of the last
of the authorisations:
Provided that where the Assessing Officer is of
the opinion that any part of the income as
computed by the assessee under this clause is
undisclosed, he may recomputed such income;
(d) the total income referred to in sub-section (5) of
Section 115A or Section 115G or sub-section (1)
of Section 194P.]
(2) The undisclosed income falling within the block
period,
10[***] shall be computed in accordance
with the provisions of this Act, on the basis of
evidence found as a result of search or survey
or requisition of books of account or other
documents and any other material or
10
Omitted ―forming part of the total income referred to in sub-section (1) of
Section 158BA,‖ by Finance Act, 2025 (No.7 of 2025), with retrospective
effect from 01.09.2024.
WP(C) No.30861 of 2025 Page 24 of 65
information as are either available with the
Assessing Officer or come to his notice during
the course of proceedings under this Chapter.
11[(3) Where any income required to be determined
as a result of search or requisition of books of
account or other documents and any other
material or information as are either available
with the Assessing Officer or come to his notice
during the course of proceedings under this
Chapter, or determined on the basis of entries
relating to such income or transactions as
recorded in books of account and other
documents maintained in the normal course on
or before the date of the execution of the last of
the authorisations, relates to any international
transaction or specified domestic transaction
referred to in Section 92CA, pertaining to the
period beginning from the 1st day of April of
the previous year in which last of the
authorisations was executed and ending with
the date on which last of the authorisations
was executed, such income shall not be
11
Substituted sub-section (3) by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024, which stood thus:
―[(3) Where any evidence found as a result of search or requisition of
books of account or other documents and any other material or
information as are either available with the Assessing Officer or
come to his notice during the course of proceedings under this
Chapter, or determined on the basis of entries relating to such
income or transactions as recorded in books of account and other
documents maintained in the normal course on or before the date
of the search or requisition, relates to any international transaction
or specified domestic transaction referred to in Section 92CA,
pertaining to the period beginning from the 1st day of April of the
previous year in which last of the authorisations was executed
and ending with the date on which last of the authorisations was
executed, such evidence shall not be considered for the purposes
of determining the total income of the block period and such
income shall be considered in the assessment made under the
other provisions of this Act.]‖
WP(C) No.30861 of 2025 Page 25 of 65
considered for the purposes of determining the
total undisclosed income of the block period
and such income shall be considered in the
assessment made under the other provisions of
this Act.]
(4) For the purposes of determination of
undisclosed income,––
(a) of a firm, such income assessed for each
of the previous years falling within the
block period shall be the income
determined before allowing deduction of
salary, interest, commission, bonus or
remuneration by whatever name called to
any partner not being a working partner;
(b) the provisions of Sections 68, 69, 69A,
69B and 69C shall, so far as may be,
apply and references to ―Financial Year‖
in those sections shall be construed as
references to the relevant previous year
falling in the block period;
(c) the provisions of Section 92CA shall, so
far as may be, apply and references to
―previous year‖ in that section shall be
construed as reference to the relevant
previous year falling in the block period
excluding the period referred to in sub-
section (3).
12[(5) The tax referred to in sub-section (7) of Section
158BA shall be charged on the total
12
Substituted sub-section (5) by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024, which stood thus:
WP(C) No.30861 of 2025 Page 26 of 65
undisclosed income determined in the manner
specified in sub-section (1).]
13[(6) ***]
(7) For the purposes of assessment under this
Chapter, losses brought forward from the
previous year (prior to the first previous year
comprising the block period) under Chapter VI
or unabsorbed depreciation under sub-section
(2) of Section 32 shall not be set off against the
undisclosed income determined in the block
assessment under this Chapter but may be
carried forward for being set off in the previous
year subsequent to the assessment year in
which the block period ends, for the remaining
period, taking into account the block period and
such assessment year, and in accordance with
the provisions of this Act.‖
7. Having diligently considered the arguments of the
Counsel for the petitioner and taking note of aforesaid
facts as remained uncontroverted by the learned Senior
Standing Counsel, this Court finds from Section 158BA
that where on or after 01.09.2024 search is initiated
under Section 132, or books of account, other
―(5) The tax referred to in sub-section (7) of Section 158BA shall be
charged on the total income determined in the manner specified in
sub-section (1) as reduced by the total income referred to in clause
(ii), clause (iii) and clause (iv) of sub-section (1).‖
13
Omitted sub-section (6) by Finance Act, 2025 (No.7 of 2025), with
retrospective effect from 01.09.2024, which stood thus:
―(6) For the purposes of sub-section (1) and sub-section (5), if the
disclosed income under clause (i) of sub-section (1) or where the
income disclosed in respect of any previous year comprising the
block period, or the returned income or assessed income under
clause (ii) or clause (iii) of sub-section (1) or where the income as
determined under clause (iv), is a loss, it shall be ignored.‖
WP(C) No.30861 of 2025 Page 27 of 65
documents or any assets are requisitioned under Section
132A, then the Assessing Officer shall proceed to assess
or reassess the ―total undisclosed income of the block
period in accordance with the provisions of Chapter-XIV-
B‖ and the assessment or reassessment or
recomputation, other than said Chapter pertaining to
―any assessment year falling in the block period‖, defined
under Section 158B, pending on the date of initiation of
the search under Section 132, or making of requisition
under Section 132A, as the case may be, shall abate and
shall be deemed to have abated on the date of initiation
of search or making of requisition.
7.1. ―Assessment Year‖ has been defined under Section 2(9)
of the IT Act to mean ―the period of twelve months
commencing on the 1
st day of April every year‖. The term
―Previous Year‖ has been defined under Section 2(34) of
the IT Act to mean ―the previous year as defined in
Section 3‖. Section 3 of said Act reads as follows:
―For the purpose of this Act, ‗Previous Year‘ means the
Financial Year
14 immediately preceding the Assessment
Year:
Provided that in the case of a business or profession
newly set up, or a source of income newly coming into
existence, in the said Financial Year, the Previous Year
shall be the period beginning with the date of setting up of
14
The term ―Financial Year‖ has been defined in Section 2(21) of the General
Clauses Act, 1897 to mean ―the year commencing on the first day of April‖.
WP(C) No.30861 of 2025 Page 28 of 65
the business or profession or, as the case may be, the
date on which the source of income newly comes into
existence and ending with the said Financial Year.‖
Thus, income tax is payable on the income earned
during the Previous Year. The impugned Assessment
Year in the present case being 2022-23, it relates to
Previous Year 2021-22. Section 158B defines ―block
period‖ specifying ―six Assessment Years preceding the
previous year in which the search was initiated under
Section 132 or any requisition was made under Section
132A‖ Said definition also encompasses ―the period
starting from the 1
st day of April of the previous year in
which search was initiated or requisition was made and
ending on the date of the execution of the last of
authorisations for such search or such requisition‖.
7.2. Looking at definition of ―block period‖ in Section 158BA,
it is manifest that the meaning of the term is ascribed
using words ―means … includes‖. The following
interpretation of such phrase is found reflected in Satish
Chander Ahuja Vrs. Sneha Ahuja, (2020) 12 SCR 189:
―49. The definition of shared household given under
Section 2(s) [the Protection of Women from Domestic
Violence Act, 2005] as noticed above beginning with
expression ―shared household means a household
where the person aggrieved lives or at any stage has
lived in a domestic relationship either singly or along
with the respondent and includes… The section uses
both the expressions ―means and includes‖. A Three
WP(C) No.30861 of 2025 Page 29 of 65
Judge bench judgment of this Court in Bharat Coop.
Bank (Mumbai) Ltd. Vrs. Coop. Bank Employees
Union, (2007) 4 SCC 685 had occasion to consider
Section 2(bb) of Industrial Disputes Act, 1947, which
section used both the words ―means and includes‖.
Explaining both the expressions, following was laid
down in paragraph 23:
‗23. *** It is trite to say that when in the definition
clause given in any statute the word ―means‖
is used, what follows is intended to speak
exhaustively. When the word ―means‖ is used
in the definition, to borrow the words of Lord
Esher, M.R. in Gough Vrs. Gough, (1891) 2 QB
665 it is a ―hard-and-fast‖ definition and no
meaning other than that which is put in the
definition can be assigned to the same. (Also
see P. Kasilingam Vrs. P.S.G. College of
Technology, 1995 Supp (2) SCC 348 = AIR
1995 SC 1395.) On the other hand, when the
word ―includes‖ is used in the definition, the
legislature does not intend to restrict the
definition: it makes the definition enumerative
but not exhaustive. That is to say, the term
defined will retain its ordinary meaning but its
scope would be extended to bring within it
matters, which in its ordinary meaning may or
may not comprise. Therefore, the use of the
word “means” followed by the word
“includes” in Section 2(bb) of the
Industrial Disputes Act is clearly
indicative of the legislative intent to make
the definition exhaustive and would cover
only those banking companies which fall
WP(C) No.30861 of 2025 Page 30 of 65
within the purview of the definition and
no other.‘
50. We may notice another judgment of this Court in
Pioneer Urban Land and Infrastructure Limited and
Anr. Vrs. Union of India and Ors., (2019) 8 SCC 416
where this Court had occasion to consider both the
expressions, i.e., ―means and includes‖. In
paragraph 82, this Court laid down:
‗82. *** In fact, in Jagir Singh Vrs. State of Bihar,
(1976) 2 SCC 942, SCC paras 11 and 19 to 21
and Mahalakshmi Oil Mills Vrs. State of A.P.,
(1989) 1 SCC 164, SCC paras 8 and 11 (which
has been cited in P. Kasilingam Vrs. PSG
College of Technology, 1995 Supp (2) SCC 348),
this Court set out definition sections where the
expression ―means‖ was followed by some
words, after which came the expression ―and
includes‖ followed by other words, just as in
Krishi Utpadan Mandi Samiti Vrs. Shankar
Industries, 1993 Supp (3) SCC 361 (2). In two
other recent judgments, Bharat Coop. Bank
(Mumbai) Ltd. Vrs. Employees Union, (2007) 4
SCC 685, SCC paras 12 and 23 and State of
W.B. Vrs. Associated Contractors, (2015) 1 SCC
32, SCC para 14, this Court has held that
wherever the expression “means” is
followed by the expression “and includes”
whether with or without additional words
separating “means” from “includes”, these
expressions indicate that the definition
provision is exhaustive as a matter of
statutory interpretation. It has also been
held that the expression “and includes” is
WP(C) No.30861 of 2025 Page 31 of 65
an expression which extends the
definition contained in words which
follow the expression “means” ***‖
51. We may notice two more judgments relied by Shri
Jayant Bhushan, learned senior counsel, i.e., The
South Gujarat Roofing Tiles Manufacturers
Association and Anr. Vrs. The State of Gujarat and
Anr., (1976) 4 SCC 601. Shri Bhushan‘s submission
is that use of expression ―includes‖ in Section 2(s)
has to be read as means. He placed reliance on
following observations made by this Court in
paragraph 5:
‗5. *** Though ―include‖ is generally used in
interpretation clauses as a word of
enlargement, in some cases the context might
suggest a different intention. Pottery is an
expression of very wide import, embracing all
objects made of clay and hardened by heat. If
it had been the legislature‘s intention to bring
within the entry all possible articles of pottery,
it was quite unnecessary to add an
explanation. We have found that the
explanation could not possibly have been
introduced to extend the meaning of potteries
industry or the articles listed therein added ex
abundanti cautela. It seems to us therefore that
the legislature did not intend everything that
the potteries industry turns out to be covered
by the entry. What then could be the purpose of
the explanation. The explanation says that, for
the purpose of Entry 22, potteries industry
―includes‖ manufacture of the nine articles of
pottery named therein. It seems to us that the
WP(C) No.30861 of 2025 Page 32 of 65
word ―includes‖ has been used here in the
sense of ‗means‘; this is the only construction
that the word can bear in the context. In that
sense it is not a word of extension, but
limitation; it is exhaustive of the meaning
which must be given to potteries industry for
the purpose of Entry 22. The use of the word
―includes‖ in the restrictive sense is not
unknown. The observation of Lord Watson in
Dilworth Vrs. Commissioner of Stamps which is
usually referred to on the use of ―include‖ as a
word of extension, is followed by these lines:
„But the word „include‟ is susceptible of
another construction, which may become
imperative, if the context of the Act is
sufficient to show that it was not merely
employed for the purpose of adding to the
natural significance of the words or
expressions defined. It may be equivalent
to „mean and include‟, and in that case it
may afford an exhaustive explanation of
the meaning which, for the purposes of
the Act, must invariably be attached to
these words or expressions.‟
52. Next judgment relied by Shri Bhushan is Karnataka
Power Transmission Corporation and Anr. Vrs.
Ashok Iron Works Private Limited, (2009) 3 SCC 240.
In the above case also submission was made before
this court that in the definition of person given in
section 2(m) of Consumer Protection Act, the
expression ―includes‖ should be read as ―means‖.
This Court laid down that interpretation of a word or
WP(C) No.30861 of 2025 Page 33 of 65
expression must depend on the text and the context.
In paragraphs 14 to 17, following was laid down:
‗14. The learned counsel also submitted that the
word ―includes‖ must be read as ―means‖. In
this regard, the learned counsel placed reliance
upon two decisions of this Court, namely;
(1) South Gujarat Roofing Tiles
Manufacturers Assn. Vrs. State of
Gujarat, (1976) 4 SCC 601 and
(2) RBI Vrs. Peerless General Finance and
Investment Co. Ltd., (1987) 1 SCC 424.
15. Lord Watson in Dilworth Vrs. Stamps Commr.,
1899 AC 99 made the following classic
statement: (AC pp. 105-06)
‗*** The word ‗include‘ is very generally used in
interpretation clauses in order to enlarge the
meaning of words or phrases occurring in the
body of the statute; and when it is so used
these words or phrases must be construed as
comprehending, not only such things as they
signify according to their natural import, but
also those things which the interpretation
clause declares that they shall include. But the
word ‗include‘ is susceptible of another
construction, which may become imperative, if
the context of the Act is sufficient to show that
it was not merely employed for the purpose of
adding to the natural significance of the words
or expressions defined. It may be equivalent to
‗mean and include‘, and in that case it may
afford an exhaustive explanation of the
meaning which, for the purposes of the Act,
WP(C) No.30861 of 2025 Page 34 of 65
must invariably be attached to these words or
expressions.‘
16. Dilworth, 1899 AC 99 and few other decisions
came up for consideration in Peerless General
Finance and Investment Co. Ltd., (1987) 1 SCC
424 and this Court summarised the legal
position that (Peerless case, (1987) 1 SCC 424,
SCC pp. 449-50, para 32) inclusive definition
by the legislature is used:
‗32. ***
(1) to enlarge the meaning of words or
phrases so as to take in the ordinary,
popular and natural sense of the words
and also the sense which the statute
wishes to attribute to it;
(2) to include meanings about which there
might be some dispute; or
(3) to bring under one nomenclature all
transactions possessing certain similar
features but going under different names.‘
17. It goes without saying that interpretation of a
word or expression must depend on the text
and the context. The resort to the word
―includes‖ by the legislature often shows the
intention of the legislature that it wanted to
give extensive and enlarged meaning to such
expression. Sometimes, however, the context
may suggest that word ―includes‖ may have
been designed to mean ―means‖. The setting,
context and object of an enactment may
provide sufficient guidance for interpretation of
WP(C) No.30861 of 2025 Page 35 of 65
the word ―includes‖ for the purposes of such
enactment.‘
53. After noticing the ratio of above judgments, Section
2(s), which uses both the expressions ―means and
includes‖ and looking to the context, we are of the
view that the definition of shared household in
Section 2(s) is an exhaustive definition. The
first part of definition begins with expression
“means” which is undoubtedly an exhaustive
definition and second part of definition, which
begins with word “includes” is explanatory of
what was meant by the definition. Shri Nidhesh
Gupta, learned senior counsel for the appellant
submits that even if it is accepted that the definition
of Section 2(s) is exhaustive, his case is fully covered
in both the parts of the definition.
54. The use of both the expressions ―means and
includes‖ in Section 2(s) of the Protection of Women
from Domestic Violence Act, 2005, thus, clearly
indicate the legislative intent that the definition is
exhaustive and shall cover only those which fall
within the purview of definition and no other.‖
7.3. Keeping in view the interpretation of a definition clause
with ―means … includes‖, glance at definition of ―block
period‖ contained in Section 158B of the IT Act makes it
clear that the search being commenced on 26.11.2024
and concluded on 28.11.2024, the previous year starts
from 01.04.2024 and ending on 31.03.2025. Hence,
―preceding previous year‖ as per definition of ―block
period‖ in Section 158B would be 2023-24. The
WP(C) No.30861 of 2025 Page 36 of 65
impugned Assessment Order dated 17.03.2025
(Annexure-27) being with respect to Assessment Year
2022-23, the relevant ―Previous Year‖ would be 2021-22.
7.4. Pertaining to the Assessment Year, 2022-23, the
Previous Year commences from 01.04.2021 and ends on
31.03.2022. ―Six Assessment Years preceding Previous
Year in which the search was initiated under Section 132
or any requisition was made under Section 132A‖ as per
definition of ―block period‖ contained in Section 158B
vide Chapter XIV-B would be computed accordingly. To
clarify, it may be stated that the search being conducted
on 26.11.2024, the relevant Previous Year would be
2023-24. Preceding Previous Year is, thus, 2022-23. ―Six
Assessment Years Preceding Previous Years‖ would be:
i. 2023-24;
ii. 2022-23;
iii. 2021-22;
iv. 2020-21;
v. 2019-20;
vi. 2018-19.
7.5. The Previous Year in question, i.e., 2021-22 (Assessment
Year 2022-23) would, thus, fall within the expression
―six years preceding the previous year‖ ―in which the
WP(C) No.30861 of 2025 Page 37 of 65
search was initiated under Section 132 … and also
includes the period starting from the first day of April of
the Previous Year in which search was initiated‖.
7.6. For better conceptual comprehension a reference may be
had to interpretation of ―Previous Year‖ as reflected in
Shanti Construction Pvt. Ltd. Vrs. State of Odisha, (2025)
11 SCR 475, wherein the following pertinent
observations are made:
―14. The unsuccessful bidder is a company. It is
axiomatic from the stand taken by the State in its
counter, that the unsuccessful bidder had filed the
Income Tax Return for the Financial Year 2020-
2021. The auction notice was issued in the midst of
the year i.e. on 11.07.2022. The proper construction
of the phrase ‗previous Financial Year‘ therefore,
assumes critical importance. Rule 27(4)(iv) of the
Rules requires the bidder to produce an Income Tax
Return of the ―previous Financial Year‖. The said
Rule has to be read in harmony with the provisions
of the Income Tax Act, 1961. Under Section 139(1) of
the aforesaid Act, a company may file the Income
Tax Return for the Financial Year 2021-2022 up to
31st of October, 2022. As per auction notice, the bids
were required to be submitted on 18.07.2022. The
period for filing the Income Tax Return for Financial
Year 2021-2022 (relevant to Assessment Year 2022-
2023) was yet to expire. Therefore, on the said date
the bidder could not have been expected to file an
Income Tax Return for Financial Year 2021-2022
along with its bid documents, as the statutory period
for filing the same had not expired.
WP(C) No.30861 of 2025 Page 38 of 65
15. The reasonable understanding of the term
„previous Financial Year‟ must therefore, be
treated to mean the year immediately
preceding Financial Year i.e. 2020-2021, for
which the unsuccessful bidder had filed the
Income Tax Return. The term „previous
Financial Year‟ in the case of unsuccessful
bidder was to be treated as Financial Year
2020-2021 and not 2021-2022. The aforesaid
interpretation is in consonance with the provisions of
the Income Tax Act, 1961. The Tender Committee,
however, proceeded on a narrow and erroneous
understanding of the expression of the term
‗previous Financial Year‘ and erroneously concluded
that since the unsuccessful bidder had not filed the
Income Tax Return for Financial Year 2021-2022,
therefore it had not complied with the mandate
contained in Rule 27(4)(iv) of the Rules. The Tender
Committee has erroneously interpreted the tender
condition which excludes the highest bidder and
defeats the purpose of the tender. Such an
interpretation by the Tender Committee undermines
the principle that State must act to enhance and not
diminish, the public exchequer in case it is dealing
with natural resources. When an authority acting
under a tender misinterprets the tender condition
that diminishes competition and deprives the State
of its legitimate revenue, the constitutional duty of
the court to interfere is beyond question. The High
Court while deciding the writ petition has failed to
advert itself to the aforesaid aspect of the matter.
The impugned judgment passed by the High Court,
therefore, cannot be sustained. In view of our
aforesaid conclusion, it is not necessary for us to
WP(C) No.30861 of 2025 Page 39 of 65
advert to various other contentions urged by the
parties.‖
7.7. Taking aid of the above analysis of the terms
―Assessment Year‖, ―Previous Year‖ and ―Financial Year‖,
the expression ―preceding the previous year‖ contained
in Section 158B assumes significance. The said
expression ―preceding the Previous Year‖ refers to any
Financial Year that comes before the Previous Year
relevant to a particular Assessment Year.
7.8. Reading Section 158BA of the IT Act as amended by
virtue of the Finance (No.2) Act, 2024 and the Finance
Act, 2025, leaves no scope for ambiguity that pending
proceedings under any other Chapter of the IT Act on
the date of initiation of search or making requisition
shall abate and shall be deemed to have been abated so
far as it relates to ―Assessment Year falling in the block
period‖.
7.9. Thus this Court finds that provisions of Section
158BA(2) of the IT Act is attracted when the Assessment
Year falls in the ken of definition of the term ―block
period‖ as defined under Section 158B.
7.10. This Court finds force in the argument of Sri Saswat
Kumar Acharya, learned Advocate for the petitioner that
the (re)assessment under Section 143(3) read with
Section 260 and Section 144B of the IT Act pertaining to
WP(C) No.30861 of 2025 Page 40 of 65
Assessment Year 2022-23 falls within the meaning of
definition of ―block period‖ envisaged in Section 158B, so
that pending (re)assessment on the date of initiation of
the search under Section 132, or making of requisition
under Section 132A, as the case may be, would stand
abated by operation of law.
7.11. As is ex facie from Panchanama that the search was
commenced on 26.11.2024 and concluded on
28.11.2024, the assessment pending under Section 143
of the IT Act with respect to ―six Assessment Years
preceding the Previous Years‖ would abate. But with
caveat, other conditionalities contained in Chapter XIV-B
of the IT Act are required to be satisfied.
8. Now it is to be considered whether Writ Court is
competent to entertain writ petition and pass orders of
abatement solely on the above perspective.
8.1. It is canvassed by Sri Saswat Kumar Acharya, learned
Advocate that Section 158BA is a revenue neutral
provision and the Revenue is protected notwithstanding
such abatement inasmuch as the assessment or
reassessment shall stand revived if no incriminating
material is unearthed during the course of search
operation. Such submission is made stemming on the
ratio of judgment rendered by the Hon‘ble Supreme
Court of India in the case of Principal Commissioner of
WP(C) No.30861 of 2025 Page 41 of 65
Income Tax Vrs. Abhisar Buildwell Private Limited, (2024)
2 SCC 433.
8.2. Advancing his submission further, he strenuously
argued that the Assessing Officer in passing Assessment
Order dated 17.03.2025 (Annexure-27) transgressed his
jurisdiction and acted contrary to the provisions of
Section 158BA(2). Contending that the provisions of
Section 153A being identically worded in Section 158BA,
Sri Saswat Kumar Acharya, learned Advocate advanced
argument that the interpretation of the Hon‘ble Supreme
Court of India in Principal Commissioner of Income Tax
Vrs. Abhisar Buildwell Private Limited, (2024) 2 SCC 433
would bind the Assessing Officer. He placed strong
reliance on paragraphs 33 and 34 of said reported
judgment, which are reproduced hereunder:
―33. As per the provisions of Section 153-A, in case of a
search under Section 132 or requisition under
Section 132-A, the AO gets the jurisdiction to assess
or reassess the ―total income‖ in respect of each
assessment year falling within six assessment
years. However, it is required to be noted that as per
the second proviso to Section 153-A, the assessment
or reassessment, if any, relating to any assessment
year falling within the period of six assessment
years pending on the date of initiation of the search
under Section 132 or making of requisition under
Section 132-A, as the case may be, shall abate. As
per sub-section (2) of Section 153-A, if any
proceeding initiated or any order of assessment or
WP(C) No.30861 of 2025 Page 42 of 65
reassessment made under sub-section (1) has been
annulled in appeal or any other legal proceeding,
then, notwithstanding anything contained in sub-
section (1) or Section 153, the assessment or
reassessment relating to any assessment year
which has abated under the second proviso to sub-
section (1), shall stand revived with effect from the
date of receipt of the order of such annulment by the
Commissioner. Therefore, the intention of the
legislation seems to be that in case of search
only the pending assessment/reassessment
proceedings shall abate and the AO would
assume the jurisdiction to assess or reassess
the “total income” for the entire six years‟
period/block assessment period. The intention
does not seem to be to reopen the completed/
unabated assessments, unless any
incriminating material is found with respect to
assessment year concerned falling within last
six years preceding the search. Therefore, on true
interpretation of Section 153-A of the 1961 Act, in
case of a search under Section 132 or requisition
under Section 132-A and during the search any
incriminating material is found, even in case of
unabated/completed assessment, the AO would
have the jurisdiction to assess or reassess the ―total
income‖ taking into consideration the incriminating
material collected during the search and other
material which would include income declared in the
returns, if any, furnished by the assessee as well as
the undisclosed income. However, in case during
the search no incriminating material is found,
in case of completed/unabated assessment, the
only remedy available to the Revenue would be
to initiate the reassessment proceedings under
WP(C) No.30861 of 2025 Page 43 of 65
Sections 147/148 of the Act, subject to
fulfilment of the conditions mentioned in
Sections 147/148, as in such a situation, the
Revenue cannot be left with no remedy.
Therefore, even in case of block assessment
under Section 153-A and in case of unabated/
completed assessment and in case no
incriminating material is found during the
search, the power of the Revenue to have the
reassessment under Sections 147/148 of the
Act has to be saved, otherwise the Revenue
would be left without remedy.
34. If the submission on behalf of the Revenue that in
case of search even where no incriminating material
is found during the course of search, even in case of
unabated/completed assessment, the AO can
assess or reassess the income/total income taking
into consideration the other material is accepted, in
that case, there will be two assessment orders,
which shall not be permissible under the law. At the
cost of repetition, it is observed that the
assessment under Section 153-A of the Act is
linked with the search and requisition under
Sections 132 and 132-A of the Act. The object
of Section 153-A is to bring under tax the
undisclosed income which is found during the
course of search or pursuant to search or
requisition. Therefore, only in a case where the
undisclosed income is found on the basis of
incriminating material, the AO would assume
the jurisdiction to assess or reassess the total
income for the entire six years block
assessment period even in case of completed/
unabated assessment. As per the second
WP(C) No.30861 of 2025 Page 44 of 65
proviso to Section 153-A, only pending
assessment/reassessment shall stand abated
and the AO would assume the jurisdiction with
respect to such abated assessments. It does not
provide that all completed/unabated
assessments shall abate. If the submission on
behalf of the Revenue is accepted, in that case, the
second proviso to Section 153-A and sub-section (2)
of Section 153-A would be redundant and/or re-
writing the said provisions, which is not permissible
under the law.‖
8.3. In the said reported case being Abhisar Buildwell Private
Limited (supra) the Hon‘ble Supreme Court of India has
ultimately been pleased to hold as follows:
―36. In view of the above and for the reasons stated
above, it is concluded as under:
36.1. That in case of search under Section 132 or
requisition under Section 132-A, the AO assumes the
jurisdiction for block assessment under Section 153-
A;
36.2. All pending assessments/reassessments shall
stand abated;
36.3. In case any incriminating material is found/
unearthed, even, in case of unabated/completed
assessments, the AO would assume the jurisdiction
to assess or reassess the ―total income‖ taking into
consideration the incriminating material unearthed
during the search and the other material available
with the AO including the income declared in the
returns; and
WP(C) No.30861 of 2025 Page 45 of 65
36.4. In case no incriminating material is unearthed
during the search, the AO cannot assess or reassess
taking into consideration the other material in
respect of completed assessments/unabated
assessments. Meaning thereby, in respect of
completed/unabated assessments, no addition can
be made by the AO in absence of any incriminating
material found during the course of search under
Section 132 or requisition under Section 132-A of the
1961 Act. However, the completed/unabated
assessments can be re-opened by the AO in exercise
of powers under Sections 147/148 of the Act,
subject to fulfilment of the conditions as envisaged/
mentioned under Sections 147/148 of the Act and
those powers are saved.‖
8.4. It may be apposite to bear in mind the following principle
enunciated by the Hon‘ble Supreme Court in Union of
India Vrs. Arulmozhi Iniarasu, (2011) 7 SCC 397:
―14. Before examining the first limb of the question,
formulated above, it would be instructive to note, as
a preface, the well-settled principle of law in the
matter of applying precedents that the Court should
not place reliance on decisions without discussing as
to how the fact situation of the case before it fits in
with the fact situation of the decision on which
reliance is placed. The observations of the courts are
neither to be read as Euclid‘s theorems nor as
provisions of statute and that too taken out of their
context. These observations must be read in the
context in which they appear to have been stated.
Disposal of cases by blindly placing reliance on a
decision is not proper because one additional or
different fact may make a world of difference
WP(C) No.30861 of 2025 Page 46 of 65
between conclusions in two cases. [Ref. Bharat
Petroleum Corpn. Ltd. Vrs. N.R. Vairamani, (2004) 8
SCC 579; Sarva Shramik Sanghatana (KV) Vrs.
State of Maharashtra, (2008) 1 SCC 494 and
Bhuwalka Steel Industries Ltd. Vrs. Bombay Iron &
Steel Labour Board, (2010) 2 SCC 273.]‖
8.5. There cannot be any quarrel with respect to exposition of
law with respect to interpretation of Section 153A.
Material distinction is perceived on careful reading of
provisions of Section 153A juxtaposed with Section
158BA. Section 153A dealing with ―Assessment in case
of search or requisition‖ in the first proviso to sub-section
(1) thereof confers that ―the Assessing Officer shall
assess or reassess the total income in respect of each
Assessment Year falling within such six Assessment
Years and for the relevant Assessment Year or Years‖
and the second proviso thereto speaks of abatement by
using the expression ―any Assessment Year falling within
the period of six Assessment Years and for the relevant
Assessment Year or Years referred to this sub-section
pending on the date of initiation of the search under
Section 132 or making requisition under Section 132A‖.
Nonetheless, Chapter XIV-B— ―Special Procedure for
Assessment of Search Cases‖ in Section 158BA(1) vests
power on the Assessing Officer to ―proceed to assess or
reassess the total undisclosed income of the block
period in accordance with the provisions of this Chapter‖
and speaks of abatement in sub-section (2) thereof by
WP(C) No.30861 of 2025 Page 47 of 65
employing the expression ―any Assessment Year falling
in the block period‖. As has already been discussed in
the preceding paragraph the definition of the term ―block
period‖ in Section 158B makes it unequivocal that the
period in question, i.e., Assessment Year 2022-23
(relating to Previous Year 2021-22) is comprehended
within the expression ―six Assessment Years preceding
the previous year in which the search was initiated under
Section 132 or any requisition was made under Section
132A and also includes the period starting from the first
day of April of the previous year in which search was
initiated or requisition was made and ending on the date
of the execution of the last of the authorisation for such
search or such requisition‖.
8.6. In the wake of such proposition of law as propounded by
the Hon‘ble Supreme Court of India in the case of
Abhisar Buildwell Private Limited (supra), qua provisions
of Section 153A, this Court now turns to examine
whether the said principle has application to the present
set of factual situation with respect to making of the
Assessment Order dated 17.03.2025 passed in
Assessment Unit, Income Tax Department taking into
consideration the language contained in Section 158BA.
8.7. Both the provisions read along side would go to show
that they operate in different fields. Whereas Section
153A gives scope to the Assessing Officer to
WP(C) No.30861 of 2025 Page 48 of 65
assess/reassess ―total income‖, Section 158BA restricts
assessment/reassessment only ―total undisclosed
income‖ of the ―block period‖ in accordance with the
provisions of Chapter XIV-B. Therefore, discernible
distinction exists between provisions of Section 153A vis-
a-vis Section 158BA.
8.8. Notice dated 01.06.2023 issued under Section 144B was
for framing of assessment under Section 143. Said
notice manifests that by acknowledging return furnished
for the Assessment Year 2022-23, the assessment of the
petitioner-individual bearing PAN ASGPS9755A would be
undertaken in the faceless manner. It is made clear in
the said notice as follows:
―While acknowledging the care you may have taken in
preparing the return of income, there are certain issues,
on which further clarification is required. Therefore, the
return of income has been selected for scrutiny
assessment in accordance with the provisions of the
Income Tax Act, 1961.‖
8.9. The Assessment Order dated 17.03.2025 depicts that:
―The assessee had filed return of income for the
Assessment Year 2022-23 vide Acknowledgement
No.628985661081022 on 08.10.2022, declaring total
income of Rs.81,00,460/- under Section 139(1) of the
Income Tax Act, 1961 (―the Act‖). The assessee is an
individual engaged in the business of transportation of
goods by road and trading of iron ore and showing his
return of income from House Property, income from
WP(C) No.30861 of 2025 Page 49 of 65
Business, capital gain and other sources. The case was
selected under scrutiny under CASS. The reason for
selection under CASS was:
1. High income reported in the return and no entry in
Schedule Assets and Liabilities of return of income;
2. High liabilities as compared to low income/receipts;
3. Creditors are more than 50% of the purchases made
during the year.‖
8.10. It is emanated from the above extracts of the notice and
the Assessment Order that the case of the assessee was
selected for assessment/reassessment of ―total income‖
as disclosed in the return pertaining to Assessment Year
2022-23. Pleadings are lacking with respect to the fact
whether the impugned assessment/reassessment of the
petitioner is confined to ―undisclosed income‖ in terms of
Section 158BB read with Section 158B. Sri Saswat
Kumar Acharya, learned Advocate for the petitioner
having merely advanced his argument based on Section
158BA(2) could not demonstrate that the search under
Section 132 was undertaken with respect to any income
other than disclosed in his return indicating ―individual
status‖. Furthermore, the Panchnama is silent about
search being conducted on the petitioner‘s income
disclosed/undisclosed in his individual status.
8.11. It may be worthwhile to notice Section 158BD of the IT
Act as amended with retrospective effect from
WP(C) No.30861 of 2025 Page 50 of 65
01.09.2024 by virtue of the Finance Act, 2025. Said
section stands thus:
―158BD.Undisclosed income of any other person.—
Where the Assessing Officer is satisfied that any
undisclosed income belongs to or pertains to or
relates to any person (herein referred to as the
―other person‖), other than the person (herein
referred to as the ―specified person‖ for the purposes
of this section) with respect to whom search was
initiated under Section 132 or requisition was made
under Section 132A, then any money, bullion,
jewellery, virtual digital asset or other valuable
article or thing or any books of account or other
documents seized or requisitioned or any other
material or information relating to the aforesaid
undisclosed income shall be handed over to the
Assessing Officer having jurisdiction over such other
person and that Assessing Officer shall proceed
under Section 158BC against such other person and
the provisions of this Chapter shall apply
accordingly:
Provided that,––
(a) where there is one specified person relevant to
such other person, the block period for such
other person shall be the same as that for the
specified person; and
(b) where there is more than one specified persons
relevant to such other person, the block period
for such other persons shall be the same as
that for the specified person in whose case the
block period ends on a later date:
WP(C) No.30861 of 2025 Page 51 of 65
Provided further that in case of such other person,
for the purposes of abatement under sub-sections (2)
and (3) of Section 158BA, the reference to the date of
initiation of the search under Section 132 or making
of requisition under Section 132A shall be construed
as reference to the date on which such money,
bullion, jewellery, virtual digital asset or other
valuable article or thing or any books of account or
other documents seized or requisitioned or any other
material or information relating to the aforesaid
undisclosed income were received by the Assessing
Officer having jurisdiction over such other person.‖
8.12. Pleading in the above regard falls short of in the writ
petition with respect to ―other person‖ qua abatement. It
is evident from paragraph 6 of the writ petition that the
petitioner sought to rely on a particular sub-section of
Section 158BA to hold that the assessment or
reassessment would abate if search is conducted under
Section 132 or requisition is made under Section 132A.
Such approach of the petitioner is misdirected and upon
misreading of the provisions of Section 158BA read with
Section 158BD which indicate that the (re)assessment of
undisclosed income is to be made in accordance with the
provisions provided in Chapter XIV-B. Therefore,
provisions contained in whole of said Chapter have to be
taken into consideration.
8.13. It may be relevant to have regard to the principle laid
down in Bhavnagar University Vrs. Palitana Sugar Mill
Pvt. Ltd., (2003) 2 SCC 111 expositing that the statute
WP(C) No.30861 of 2025 Page 52 of 65
has to be read as a whole. It is the basic principle of
construction of statute that the same should be read as
a whole, then chapter by chapter, section by section and
words by words. Recourse to construction or
interpretation of statute is necessary when there is
ambiguity, obscurity, or inconsistency therein and not
otherwise. An effort must be made to give effect to all
parts of statute and unless absolutely necessary, no part
thereof shall be rendered surplusage or redundant. True
meaning of a provision of law has to be determined on
the basis of what provides by its clear language, with
due regard to the scheme of law. Scope of the legislation
on the intention of the legislature cannot be enlarged
when the language of the provision is plain and
unambiguous. In other words, statutory enactments
must ordinarily be construed according to its plain
meaning and no words shall be added, altered or
modified unless it is plainly necessary to do so to
prevent a provision from being unintelligible, absurd,
unreasonable, unworkable or totally irreconcilable with
the rest of the statute. It is also well settled that a
beneficent provision of legislation must be liberally
construed so as to fulfil the statutory purpose and not to
frustrate it.
8.14. Section 158BB deals with computation of total
undisclosed income of block period. The total
WP(C) No.30861 of 2025 Page 53 of 65
undisclosed income of the block period shall be the
aggregate of (a) undisclosed income declared in the
return furnished under Section 158BC; (b) undisclosed
income determined by the Assessing Officer under sub-
section (2). Nevertheless, it is also provided that the total
undisclosed income of the block period shall not include
certain categories of income specified therein.
8.15. Harmonious construction of the provisions contained in
Chapter XIV-B unambiguously leads to project that in
order to decide whether assessment/reassessment
would stand abated in terms of Section 158BA(2) of the
IT Act, it is required that a computation is required to be
made. The abatement contemplated under Section
158BA is, thus, confined to undisclosed income in view
of amendment carried in the Finance Act, 2025.
8.16. This apart another pertinent fact is perceived having
glance at Panchanama dated 28.11.2024 (Annexure-17).
It depicts that warrant was issued in the names of M/s.
Siddhiriddhi International Pvt. Ltd., SSAB Energy and
Minerals Ltd., Siddhiriddhi Builders Pvt Ltd.,
Siddhiriddhi Steel and Power Pvt. Ltd., Siddhiriddhi
Mandap and Retreat Pvt. Ltd. and Siddhiriddhi Hatchery
Pvt. Ltd. and search was conducted at Plot No. 404/612
and 404/6I3, Madhapur, Keonjhar – 758001. Nothing is
cited that search was conducted in respect of person
having individual status, namely Saroj Kumar Sahoo
WP(C) No.30861 of 2025 Page 54 of 65
(petitioner). The Assessment Order dated 17.03.2025
(Annexure-27) reveals that it is framed against the
petitioner on scrutiny of return pertaining to the
Assessment Year 2022-23 in individual status.
8.17. Explanation to Section 158B employs the words
―Panchnama drawn in relation to ‗any person‘ in whose
case the warrant of authorisation has been issued‖.
From the Panchnama it is manifest that the search was
in relation to juristic persons and independent entities
other than individual.
8.18. In Sita Soren Vrs. Union of India, (2024) 3 SCR 462 it is
observed as follows:
―103.The words ―anything‖ and ―any‖ when read with
their respective operative words mean that a
member may claim immunity to say as they feel and
vote in a direction that they desire on any matter
before the House. These are absolutely outside the
scope of interference by the courts. The wide
meaning of ―anything‖ and ―any‖ read with their
companion words connotes actions of speech or
voting inside the House or committee which are
absolute. The phrase ―in respect of‖ applies to the
collective phrase ―anything said or any vote given.‖
The words ―in respect of‖ means arising out of or
bearing a clear relation to. This may not be
overbroad or be interpreted to mean anything which
may have even a remote connection with the speech
or vote given. We, therefore, cannot concur with the
WP(C) No.30861 of 2025 Page 55 of 65
majority judgment in PV Narasimha Rao Vrs. State
(CBI/SPE), (1998) 2 SCR 870.‖
8.19. The interpretation of word ―any‖ came up for
consideration before the Supreme Court of India in
Lucknow Development Authority Vrs. M. K. Gupta (1994)
1 SCC 243 and it is held :
―The word ‗any‘ dictionarily means ‗one or some or all‘. ...
The use of the word ‗any‘ in the context it has been used
in clause (o) indicates that it has been used wider sense
extending from one to all.‖
8.20. In Shri Balaganesan Metals Vrs. M.N. Shanmugham
Chetty, (1987) 2 SCC 707, after making a reference to the
meaning ascribed to the word in Black‘s Law Dictionary,
15th Edition, it was held that the word ‗any‘ has a
diversity of meaning and may be employed to indicate
‗all‘ or ‗every‘ as well as ‗some‘ or ‗one‘ and its meaning in
a given statute depends upon the context and the
subject-matter of the statute.
8.21. In Arjun Panditrao Khotkar Vrs. Kailash Kushanrao
Gorantyal, (2020) 7 SCR 180 it has been made clear that:
―23. Under Sub-section (4) [Section 65B(4) of the Evidence
Act, 1872], a certificate is to be produced that
identifies the electronic record containing the
statement and describes the manner in which it is
produced, or gives particulars of the device involved
in the production of the electronic record to show
that the electronic record was produced by a
WP(C) No.30861 of 2025 Page 56 of 65
computer, by either a person occupying a
responsible official position in relation to the
operation of the relevant device; or a person who is
in the management of ―relevant activities‖–
whichever is appropriate. What is also of importance
is that it shall be sufficient for such matter to be
stated to the ―best of the knowledge and belief of the
person stating it‖. Here, “doing any of the
following things…” must be read as doing all of
the following things, it being well settled that
the expression “any” can mean “all” given the
context (see, for example, this Court‘s judgments in
Bansilal Agarwalla Vrs. State of Bihar, (1962) 1 SCR
331
15 and Om Parkash Vrs. Union of India, (2010) 4
SCC 172
16). This being the case, the conditions
mentioned in sub-section (4) must also be interpreted
as being cumulative.‖
8.22. Having such understanding of the term ―any‖, when the
word ―any‖ is followed by ―person‖ in Explanation to
15
―3. The first contention is based on an assumption that the word ―any one‖ in
Section 76 means only ―one of the directors, and only one of the
shareholders‖. This question as regards the interpretation of the word
―any one‖ in Section 76 was raised in Criminal Appeals Nos. 98 to 106 of
1959 (Chief Inspector of Mines, etc.) and it has been decided there that the
word ―any one‖ should be interpreted there as ―everyone‖. Thus under
Section 76 every one of the shareholders of a private company owning the
mine, and every one of the directors of a public company owning the mine
is liable to prosecution. No question of violation of Article 14 therefore
arises.‖
16
―70. Perusal of the opinion of the Full Bench in B.R. Gupta-I [Balak Ram Gupta
Vrs. Union of India, AIR 1987 Del 239] would clearly indicate with regard
to interpretation of the word ―any‖ in Explanation 1 to the first proviso to
Section 6 of the Act which expands the scope of stay order granted in one
case of landowners to be automatically extended to all those landowners,
whose lands are covered under the notifications issued under Section 4 of
the Act, irrespective of the fact whether there was any separate order of
stay or not as regards their lands. The logic assigned by the Full Bench,
the relevant portions whereof have been reproduced hereinabove, appear
to be reasonable, apt, legal and proper.‖
WP(C) No.30861 of 2025 Page 57 of 65
Section 158B, it can be construed to mean ―every
person‖/―everyone‖.
8.23. Clauses (7) and (31) of Section 2 of the IT Act, 1961
defines the words ―assessee‖ and ―person‖ as under:
―(7) ASSESSEE means a person by whom any tax or any
other sum of money is payable under this Act, and
includes—
(a) every person in respect of whom any
proceeding under this Act has been taken for
the assessment of his income or assessment of
fringe benefits or of the income of any other
person in respect of which he is assessable, or
of the loss sustained by him or by such other
person, or of the amount of refund due to him
or to such other person;
(b) every person who is deemed to be an assessee
under any provision of this Act;
(c) every person who is deemed to be an assessee
in default under any provision of this Act;
(31) PERSON includes—
(i) An individual,
(ii) A Hindu Undivided Family,
(iii) A company,
(iv) A firm,
(v) An association of persons or a body of
individuals, whether incorporated or not,
WP(C) No.30861 of 2025 Page 58 of 65
(vi) A local authority, and
(vii) Every artificial juridical person, not falling
within any of the preceding sub-clauses.
Explanation. —
For the purposes of this clause, an association of
persons or a body of individuals or a local authority
or an artificial juridical person shall be deemed to be
a person, whether or not such person or body or
authority or juridical person was formed or
established or incorporated with the object of
deriving income, profits or gains;‖
8.24. Minute scrutiny of Panchnama clarifies the position that
the search is undertaken qua juristic persons as
reflected therein, but it does not show that ―person‖ with
―individual‖ status whose return pertaining to
Assessment Year 2022-23 was selected for assessment
under Section 143 of the IT Act on the date of search of
entities mentioned in said Panchnama under Section
132.
8.25. In Cape Brandy Syndicate Vrs. IRC, (1921) 1 KB 64 at 71
a well-established principle has been laid down:
―In a taxing Act one has to look merely at what is clearly
said. There is no room for any intendment. There is no
equity about a tax. There is no presumption as to tax.
Nothing is to be read in, nothing is to be implied. One can
only look fairly at the language used.‖
WP(C) No.30861 of 2025 Page 59 of 65
8.26. In Commissioner of Sales Tax Commissioner, Uttar
Pradesh Vrs. Modi Sugar Mills, (1961) 2 SCR 189 at 198 it
is stated thus:
―In interpreting a taxing statute, equitable considerations
are entirely out of place. Nor can taxing statutes be
interpreted on any presumptions or assumptions. The
court must look squarely at the words of the statute and
interpret them. It must interpret a taxing statute in the
light of what is clearly expressed; it cannot imply
anything which is not expressed; it cannot import
provisions in the statute so as to supply any assumed
deficiency.‖
8.27. In Consolidated Coffee Ltd. Vrs. Coffee Board, AIR 1980
SC 1468, the observation of the Supreme Court runs as
follows:
―A deemed provision might be made to include what is
obvious or what is uncertain or to impose for the purpose
of a statute an artificial construction of a word or phrase
that would not otherwise prevail.‖
When a deeming provision is in operation, the Court is
to keep in mind the principle of interpretation of a
deeming clause. Whenever a deeming clause occurs in a
statute and the Court is called upon to interpret the
same, the Court has to first ascertain the purpose for
which such deeming clause has been incorporated.
Normally a deeming clause is created by way of a legal
fiction. Therefore, the Court is to first ascertain the
purpose behind the legal fiction. After ascertaining the
WP(C) No.30861 of 2025 Page 60 of 65
purpose, the Court must assume those consequences,
which are incidental and inevitable corollaries for giving
effect to such legal fiction. See, Penguin Trading &
Agencies Ltd. Vrs. State of Orissa, 2007 (Supp.-I) OLR
738.
The exposition in Ashok Leyland Ltd. Vrs. State of TN,
(2004) 134 STC 473 (SC) as propounded transpires that
when legal fiction is created it must be given its full
effect. Reference may also be had to East End Dwelling
Co. Ltd. Vrs. Finsbury Borough Council, (1951) 2 All ER
587; State of Bombay Vrs. Pandurang Vinayak, AIR 1953
SC 244; Commissioner of Income Tax Vrs. S. Teja Singh,
AIR 1959 SC 352; M. Venugopal Vrs. Divisional Manager,
Life Insurance Corporation of India, Machilipatnam, A.P.,
(1994) 2 SCC 323; Indian Oil Corporation Limited Vrs.
Chief Inspector of Factories, (1998) 5 SCC 738, Voltas
Limited, Bombay Vrs. Union of India, (1995) Supp. 2 SCC
498, Harish Tandon Vrs. Additional District Magistrate,
Allahabad, U.P., (1995) 1 SCC 537; G. Viswanathan Vrs.
Hon‟ble Speaker, Tamil Nadu Legislative Assembly,
Madras, (1996) 2 SCC 353; Bhavnagar University Vrs.
Palitana Sugar Mill (P) Ltd., (2003) 2 SCC 111 = (2002) 4
Suppl. SCR 517. Conspectus of decisions referred to
would suggest that if one is bidden to treat an imaginary
state of affairs as real, one must surely, unless
prohibited from doing so also imagine as real the
WP(C) No.30861 of 2025 Page 61 of 65
consequences and incidents which, if the putative state
of affairs had in fact existed, must inevitably have flowed
from or accompanied it. The statute says that one must
imagine a certain state of affairs; it does not say that,
having done so, one must cause or permit one‘s
imagination to boggle when it comes to the inevitable
corollaries of that state of affairs.
8.28. With the aforesaid delineated legal position, on
examination of the pleadings/averments of the writ
petitioner, following disputed questions of fact inter alia
emerge:
i. Though Assessment Year 2022-23 falls within the
scope of the term ―block period‖ in Section
158BA(2) read with Section 158B, reading other
provisions of Chapter XIV-B would make it clear
that the provisions relating to assessment,
reassessment etc. under said Chapter is confined to
―total undisclosed income as a result of search‖.
Nothing is brought on record to suggest that the
impugned Assessment framed under Section 143
did contain ―total undisclosed income as a result of
search‖.
ii. It is crystal clear from Panchnama that the search
was conducted with respect to entities having
juristic personalities/status, whereas the impugned
WP(C) No.30861 of 2025 Page 62 of 65
Assessment Order dated 17.03.2025 indicates
assessment under Section 143 read with Section
260 and Section 144B of the IT Act relates to Saroj
Kumar Sahoo, pursuant to Computer Aided
Scrutiny Selection (known as ―CASS‖) of return
furnished for the Assessment Year 2022-23 in his
individual status.
iii. Further reading of the Notice and the Assessment
Order reveals that the assessment was on account
of scrutiny of return and initiation of assessment
proceeding was for the reasons enumerated
therein. This indicates unequivocal position that
the assessment was in respect of ―disclosed
income‖ contained in the return with respect to the
individual.
iv. Nothing is cited or was it argued that incriminating
material is found in course of search of entities qua
the instant ―assessee‖-petitioner and in the
assessment proceeding under Section 143 of the IT
Act such undisclosed income, if any, was made
available to the Assessing Officer.
8.29. Such germane factors being not available for
consideration by the Assessing Officer to take a decision
whether Section 158BA(2) would attract in the instant
case, this Court refuses to exercise the discretionary
WP(C) No.30861 of 2025 Page 63 of 65
power under Article 226/227 of the Constitution of
India.
8.30. Since no pleading is made nor was any argument
advanced by the learned counsel for the petitioner, it is
felt prudent to impress that the same are required to be
agitated before the competent authority vested with
power under the statute. Going through the replies
submitted before the Assessing Officer during the course
of Assessment proceeding under Section 143 nothing is
pointed out that the petitioner-Assessee had taken any
plea of abatement under Section 158BA of the IT Act.
8.31. Under the aforesaid premises, this Court desists from
exercising power under Article 226/227 of the
Constitution of India to entertain the writ petition by
considering disputed factual matrix as discussed above.
Conclusion:
9. In absence of material to demonstrate that the search of
petitioner (individual status) under Section 132 of IT Act
was conducted with respect to his ―total undisclosed
income‖ as envisaged under Chapter XIV-B for the
Assessment Year falling within the ken of ―block period‖,
this Court is afraid to accede to the contentions of the
petitioner and relief claimed in the writ petition merely
based on provision contained in sub-section (2) of
Section 158BA.
WP(C) No.30861 of 2025 Page 64 of 65
9.1. Nothing is brought on record to suggest that the
petitioner‘s ―undisclosed income‖ is subject matter of
search along with companies-entities whose names
appeared in the Panchnama. No iota of evidence would
evince to depict that the search of said companies-
entities resulted in discovery of ―total undisclosed
income‖ and that too it included any portion of his
income remained undisclosed in the return furnished for
the Assessment Year 2022-23 in his individual status. It
is only on fulfilment of conditions laid in the provisions
contained in Chapter XIV-B that the Assessing Officer
gets clothed with the jurisdiction to proceed to make
assessment of total undisclosed income for the block
period if any incriminating material is found. Therefore,
the Assessing Officer is said have jurisdiction to proceed
with under the provisions of Chapter XIV-B of the Act.
9.2. Hence, this writ Court is loathe in exercising
extraordinary jurisdiction by entertaining the writ
petition under Articles 226 and 227 of the Constitution
of India on the disputed questions of fact and does not
find reasonable ground to show indulgence in the matter
as the case of the petitioner does not fall within the
parameters discussed in Commissioner of Income Tax
Vrs. Chhabil Dass Agarwal, (2014) 1 SCC 603.
9.3. Ergo, no case is made out by the petitioner to invoke
power under Article 226 of the Constitution of India to
WP(C) No.30861 of 2025 Page 65 of 65
intermeddle with the Assessment Order dated
17.03.2025 passed under Section 143(3) read with
Sections 260 and 144B of the Income Tax Act, 1961
pertaining to the Assessment Year 2022-23 on the anvil
of provisions of Section 158BA(2) of the Income Tax Act,
1961, simpliciter.
10. In view of discussions made above, the writ petition
stands dismissed and pending interlocutory
application(s) is also disposed of, but in the
circumstances there shall be no order as to costs.
I agree.
(HARISH TANDON) (MURAHARI SRI RAMAN)
CHIEF JUSTICE JUDGE
High Court of Orissa, Cuttack
The 18
th February, 2026//Asini/Bichi/MRS
Legal Notes
Add a Note....