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2007 (5) TMI 209 - HC - Income TaxValidity Of assessment order passed u/s 158BC - barred by limitation as provided u/s 158BE - Search operation u/s 132 - documents seized and some fishing vessels/trawlers searched - restraint order u/s 132(3) passed - notice issued u/s 158BC - HELD THAT:- The fact that the letter dated September 15, 1998, sent by the Assistant Director of Income-tax (Investigation), Belgaum, to the Assistant Director of Income-tax (Investigation), New Delhi, clinches the issue. It has been categorically stated in the letter that the search conducted was a mere formality since there was no prohibitory order in existence. The unarticulated suggestion in this letter is that the Revenue carried out the search on September 14, 1998, merely to extend the period of limitation and not because it was necessary to conduct a search for making any recovery or seizure. We agree with the conclusion of the Tribunal that this letter clearly suggests that the search and seizure operation had come to an end on November 6, 1996, and that on September 14, 1998, there was no restraint order in respect of the fishing trawlers of the assessee and, therefore, the search and panchnama drawn on September 14, 1998, were not in accordance with law. This being the position, it cannot be said that the last panchnama drawn up in respect of the search and seizure operation pertaining to the assessee, in terms of Explanation 2 to section 158BE of the Act, was drawn up on September 14, 1998-it was actually drawn on November 6, 1996-and the period of limitation must, therefore, run from that date onwards. We are clearly of the view that the action for seizing the fishing trawlers ought to have been taken by the Revenue u/s 132(1) of the Act and not u/s 132(3) of the Act. By merely resorting to a restraint order u/s 132(3) of the Act, and that too only up to September 30, 1997, the Revenue could not have extended the time limit for passing an assessment order. Learned counsel for the assessee submitted, that even otherwise, September 14, 1998, cannot be the date of the last panchnama because in fact no seizure was effected on that date. We do not think it necessary to go into this question on the facts of the present case. We also do not think it necessary to discuss the provisions of rule 112(7) of the Income-tax Rules relied upon by learned counsel. The reason for our not discussing this is because we have come to the conclusion that the search and seizure operation actually concluded on November 6, 1996, and the events that took place on September 14, 1998, were a make-believe intended to extend the time limit, which was not permissible. The issues raised being clearly settled, and since we find no fault in the order passed by the Tribunal, in our opinion, no substantial question of law arises for consideration - The appeal is dismissed.
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