TMI Blog2019 (2) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be a fresh authorisation. However, if a restraint order is issued against any material and the same allowed to be kept in the premises itself, then within sixty days a further search could be carried out on the very same authorisation but; confined to the materials against which a restraint order is issued under Section 132 (3). The panchnama drawn up last, would be that drawn up seizing incriminating materials; a seizure as provided in Section 132. Whether it be on the first authorisation or the last under a series of such authorisations is not relevant for our case, which has only one authorisation. A panchanama was drawn up and the other documents which the authorised officer wished to examine were placed in an almirah and the same issued with a restraint order under Section 132(3). Tribunal has rightly found that at the time when the search was proceeded with, it would not have been in the contemplation of the authorised officer that an assessment order would be issued only after the period of limitation. It cannot also be assumed that the authorised officer had at the time of search itself decided to issue an order after the limitation as provided under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was no authorisation for the officer who had conducted the search and seizure on 04.04.2000. Immediately we have to notice that such a contention was never raised by the assessee before any of the fact finding authorities. The learned Senior Counsel, Government of India (Taxes), Sri Ravindranatha Menon would specifically refer to the decision of the Hon'ble Supreme Court in 2016 (384) ITR 1 (SC) [VLS Finance Ltd., v. Commissioner of Income Tax] to contend that the validity of the authorisation having not been challenged in the course of search and assessment proceedings ie: before the fact finding authorities, there could be no new challenge raised before this Court. Per contra, it is pointed out that though there is no ground raised on the question of the authorisation being absent, there is a question of law framed in the memorandum. 3. We have already stated the skeletal facts, sufficient for the consideration of the question raised on limitation. It need only be observed that if the last panchnama is found to be the one as recorded on 16.03.2000 then the limitation has to be calculated from 31.03.2000 and expires on 31.03.2002. The assessment order passed on 24.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents which were restrained under Section 132(3) without a further authorisation. We extract paragraph 20 of the aforesaid judgment which spoke on the procedure under Section 132 of the Act with specific reference to the facts of a second search within a period of two weeks. Section 132 of the Income-tax Act empowers search and seizure to be carried out by the departmental officers and to take away whatever valuable documents, records, etc., during the period of search which are found to be necessary. Search may be sudden and unexpected. Search team would not be able to unearth all documents at a time at one stroke. Party may at times keep the incriminating documents beyond the search of the search team, if he suspects a search. During the search, search team will have to detect and collect all the records which are necessary to achieve the objective. Relevancy or otherwise of the materials is to be determined by the search team. Documents which are necessary or relevant would normally be seized. The search team will have to separate the wheat from the chaff and would seize only documents which are relevant. It may not be practicable to seize all the documents in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and are extracted here under: Section 158BE: Time limit for completion of block assessment ( 1)(b):Within two years from the end of the month in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. Explanation 2(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 case the warrant of authorisation has been issued. 7. There are a number of decisions of various High Courts placed before us by the learned Counsel for the assessee, which we have to look into. But at the outset, we also have to notice that the said decisions invariably noticed the decision of a learned Single Judge of this Court and placed reliance on the same, which has been reversed by a Division Bench, as noticed herein before in Dr. C. Balakrishnan Nair . 8. Commissioner of Income Tax v. Mrs. Sandhya P. Naik [2002 (253) ITR 534(Bom)] , considered Section 158BE(1)(a) which provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and seizure on 06.11.1996, there was absolutely no proceedings taken and the search was merely stated to have been completed on 14.09.1998, in a letter of the Assistant Director of Income Tax (Investigation). The Court found that the same was a dummy search initiated as a mere formality so as to extend the period of limitation. Proceedings were held to be barred by limitation finding the last panchnama drawn to be, on 06.11.1996 and not on 14.09.1998 when a dummy search was carried out for the purpose of extending the period of limitation. 10. (2009) 221 CTR 385 (Kar) [Commissioner of Income Tax v. T.S.Chandrashekar] again considered the issue of limitation on the basis of the search conducted. Therein, two authorisations were issued on the same day; one in the morning and the other in the evening at 3.45 p.m.: the former for the search of the business premises and the latter for the search of residential premises. The Court clearly found that the second authorisation has to be considered as the authorisation later issued. However, on the question of panchnama, it was found that on 12.12.1995, there was seizure of certain documents from the business premises and on 13.12.1995, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook into the incriminating materials seized on search. The delay should not prejudice the assesssee but the Department should also be given adequate time to settle and conclude the proceedings without prejudice to the revenue. The legislature hence devised a measure by which the period for completion statutorily commences from the last date in which such incriminating materials are seized; which has to be evidenced by a panchnama. Reliance cannot be, to panchnamas prepared for release of goods or resort to some other device of a dummy search being carried out, merely for the purpose of extending the period of limitation. 13. We, then, come to the decision of the Madras High Court, wherein decisions of the High Courts of Delhi and Karnataka were relied on. The Madras High Court in A.Rakesh Kumar Jain v. Joint Commissioner of Income Tax [Tax Case (Appeal) No.1240/2006] considered the aspect of limitation under Section 158BE. A search was commenced in the assessee s premises on 12.12.2001 and the proceedings were closed on 13.12.2001. A panchnama evidencing seizure of materials was also drawn up on that date. On 08.02.2002 and on 15.02.2002 further panchnamas were drawn up evidenci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 27th and 28th of that month. On 26.03.2001, it was noticed that there was a locker maintained by the assessee in a Bank for which a second authsorisation was issued on 26.03.2001. The locker was searched and that second authorisation executed on 26.03.2001 itself. However, on the first authorisation, search was continued on 27th and 28th of March and then on 11th of April, 2001. The Department contended that since the search with respect to the first authorisation concluded on 11.04.2001, limitation has to be computed from 30.04.2001. The assessee argued that under Section 158BE, the limitation starts from the end of the month in which the last of the authorisation for search under Section 132 was executed, since the search made on the second authorisation concluded on 26.03.2001. The contention was that the limitation commenced from the execution of the last of the authorisations and hence, here it commenced when the authorisation to search the bank locker was executed. The Division Bench however gave short shrift to the said contention finding that the Explanation, then would be rendered otiose. There being only one authorisation issued herein, this decision is not at all rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual receipt of the books of accounts, other documents or assets. The thrust is on the seizure of incriminating materials and the requirement to enable the Department to look into such materials and adjudicate upon it, for which a reasonable period of two years is provided from the last day of the month, in which the authorisation is executed; evidenced by the drawing up of a panchnama of seizure of materials or documents. Even if the search operations continue for a number of days or are conducted on days not continuous or consequent, that would not be relevant in so far as computing limitation which has to be from the last date on which incriminating material was recovered and seized, which seizure is also evidenced by a panchnama. 18. At the risk of repetition, it has to be reiterated that once on the basis of an authorisation a search is initiated, then it has to be continuous unless there is a restraint order issued against any documents or materials. This is also logical since once the search party leaves the premises, no one would leave any incriminating material in the premises for further seizure. Once the search party leaves the subject premises, for a further search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the same authorisation or on a subsequent search on a further authorisation or a seizure effected from the material or documents which were issued with a restraint order. In all such cases, the last panchnama drawn up of an effective seizure made under Section 132, not being covered by the second proviso, would be the starting point of the period of limitation. It is in the circumstance of the search and seizure being not concluded in a particular day, that there is a provision under sub-Section (3) of Section 132 to make a restraint order, so as to continue the proceedings on the very same authorisation issued. 21. We again notice the Division Bench decision of this Court in Balakrishnan Nair (C) (Dr.) and the extracted paragraph to fortify our findings. When search is continued on the subsequent days and there is requirement of seizure, the panchnama last recorded would be the starting point of limitation. Again looking at the specific words employed in clause (a) of Explanation 2, it has to be reiterated that the last panchnama is that drawn up on the conclusion of the search, in relation to any person in whose case the warrant of authorisation has been issued. The person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unicated to the assessee. Pertinent is the fact that one single authorisation could specify more than one officer. It is also pointed out that Rule 112(7) of the Income Tax Rules specifically speaks of the list of all things seized in the course of search (panchanama) to be prepared by the authorised officer and signed by such witnesses. It is the contention that there is no authorisation issued in favour of the officer who conducted the second search and seizure. 24. As pointed out by the Revenue, there is absolutely no ground taken before any of the fact finding authorities on this particular aspect. If it was taken, definitely the same could have been examined. Though the learned Counsel prayed for a remand, we are not persuaded for the following reasons. Though not formally communicated, it cannot be assumed that the assessee was not aware of the order of authorisation, which definitely, he would have been confronted with at the time of search. The Form as pointed out by the learned Counsel also speaks of authorisation of more than one officer. We notice from Annexure-B, the order of the first appellate authority, that the appellant s case was that the search and seizure wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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