Re: Reassessment – Search and Seizure .

Whether a declaration is possible under the scheme, in a case where an appeal is filed and is pending on the specified date, against an order of assessment passed u/s 143(3) r.w.s 147 where the reopening and the consequent reassessment are made on the basis of a search action u/s 132 in the case of a firm where the assessee is a partner?

Section 9(a), vide clause (i), prohibits an assessee from claiming benefit of the scheme in relation to an assessment year for which an assessment has been made on the basis of a search initiated u/s 132/132A of the Act and the amount of disputed tax exceeds Rs. 5 crore. Admittedly no search has taken place in the case of an assesse, neither a special assessment has been made u/s 153A or u/s 153C of the Act. However, the addition is made in his case on the basis of the material found in the search in the firm’s case. Additions made on the ‘basis of the material found in a search’ is not the same as an assessment made on the basis of ‘search’. Accordingly the dispute relating to the third party assessments not made u/s 153C  though based on material found in someone’s search should be eligible for settlement under the scheme. A clarification however would help in the good number of cases.

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