A search was conducted on Mr. A in March 2026, and proceedings under section 158BC were initiated. Consequently, the regular assessment proceedings…

CA Final · Direct Tax Laws and International Taxation · RTP · May 2026
A search was conducted on Mr. A in March 2026, and proceedings under section 158BC were initiated. Consequently, the regular assessment proceedings for A.Y. 2024-25 were considered abated. The Assessing Officer completed the block assessment under section 158BC in December 2026. Thereafter, Mr. A filed an appeal, and in May 2027, the appellate authority annulled the block assessment. The annulment order was received by the Principal Commissioner on 30th June 2027. Which of the following statements is correct?
(A) The annulment has no impact, since the block assessment was already completed.
(B) The earlier abated assessment for A.Y. 2024-25 will automatically revive with effect from 30th June 2027.
(C) The annulment of the block assessment permanently closes the right of the Revenue to reassess the income of the assessment years falling within the block period.
(D) The Assessing Officer must seek directions from the Tribunal before taking up the revived assessment.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

The earlier abated assessment for A.Y. 2024-25 will automatically revive with effect from 30th June 2027.

Topics: Double Taxation Relief, Appeals and Revision, Non-Resident Taxation

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