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TMI Blog2015 (8) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1) dated 15.11.2008 was issued to the assessee fixing the case for hearing on 8.12.2008. Further notice u/s 143(2) was issued on 15.09.2009 for 25.09.2009. On 25.09.2009 a questionnaire asking certain documents was issued fixing the case for 05.10.2009. A supplementary questionnaire along with notice u/s 142(1) was also issued on 6.11.2009 and the hearing was fixed hearing on 13.11.2009. In response to statutory notices u/s 142(1) & 143(2) and questionnaire, Sh. Kamal Kumar Aggarwal, Chartered Accountant, of the assessee attended the proceedings from time to time and filed the details. The case was discussed with him. During the year under consideration, the assessee company could not undertake the business of manufacturing of perfumery compounds. 3. The A.O. completed the assessment u/s 153C read with Section 143(3) on 24.12.2009 determining the total income at Rs. 26,47,515/- after making addition of Rs. 2.5 crores under Section 68 and Rs. 2,31,295/- u/s 14A of the Act. Aggrieved, the assessee carried the matter in appeal. The first appellate authority partly allowed the appeal. Aggrieved, the revenue is in appeal before us on the following grounds: "M/s PPC Business and Prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue raised is legal in nature it goes to the root of the matter and for adjudication of which no fresh material outside the record is required to be considered. The Hon'ble Supreme Court in the case of NT PC Ltd. Vs. CIT (Supra) has been pleased to deal with the issue in detail and has come to the following conclusion:- " We do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record on respect of that item. We do not see any reason to restrict the power of the Tribunal u/s 254 only to decide the ground which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. " 6.1 In its earlier decision in the case of Jute Corporation of India Ltd vs ..... CIT (Supra), the Hon'ble Supreme Court has been pleased to hold as under.- " The view that the Tribunal is confined only to issues arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue of assessment being barred by time limitation, a legal issue goes to the root of the matter and adjudication of which does not require consideration of fresh material beyond record, we allow this additional ground for the adjudication of the Bench. The parties were permitted to proceed on merits of this additional ground." 7. Thus, the additional ground of cross objection is admitted. 8. After hearing rival contentions on this additional legal ground, w find that this issue is covered by the order of the ITAT in I.T.A. No. 1291- 1297/Del/2011 in the case of J.H. Finvest Pvt. Ltd. (supra). At para 10 onwards, it is held as under: "10. Considering the above submission if the dated 23.03.2007 is taken as the date of authorization, executed as per Seciton153B of the Act then the A.O. was required to frame the assessment within 21 months from the date from the end of the financial year in which lasts of the authorization was executed as per Seciton153B. As per this provision, the A.O. had to complete the assessment by 21.12.2008 in the present case, however, the assessment u/s 153A/153C have been completed on 24.12.2009/31.12/2009. It is thus apparent that the assessment u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made as mentioned in the third proviso. In such cases, the period of limitation is 33 month from the end of the financial year in last of authorization U/S 1321132A was executed or 21 months from the end of the financial year in which books of accounts or documents or assets seized or requisite are handed over U/S 153C to the AO having jurisdiction over such other person, whichever is later. 10.3. The 'authorization' mentioned in Section 153B shall be deemed to have been executed when the last panchnama is drawn in the case of search or on the date when the books of accounts/ other documents/ assets are actually received in the case of requisite u/s 132A as per Explanation (2) to Section 153 B. The provisions of Section 153B are more or less similar to the provisions of Section 158 BE of the Act. Therefore, the decisions rendered with reference to the provisions of Section 158 BE would be relevant while deciding the issue of limitation u/s 153B. It would be also important to understand the scope of the expression " Panchnama". Panchnama has not been defined in the Act. The provisions of the Code of Criminal Procedure, 1973 ('Cr. PC') relating to search and seizur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eize the item, if he is of the view that it represented undisclosed income. Power U/S 132(3) of the Income-tax Act thus cannot be exercised so as to circumvent the provisions of section 132(3) read with section 132(5) of the Income-tax Act. The position has become much more clear after the insertion of the Explanation to section 132(3) effective from 11711995, that a restraint order does not amount to seizure. Therefore, by passing a restraint order, the time-limit available for framing of the order cannot be extended." In the case of B. K. Nowlakha & ors Vs. UOl 192 ITR 436 Del, the search was conducted on 11/2/91 in the course of which certain unexplained assets including antique pieces were found. No seizure was made on that date but order of restraint was passed u/s 132(3) of the Act which was lifted on 9/4/91. The question before the court was whether such order was valid one so that period of limitation could be extended for the purpose of section l32(5) of the Act. The Hon'ble Court answered the question in favour of the assessee by observing as under: "Coming to the facts of the present case, we find that the restraint orders which have been issued U/S 132(3), from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the end of the month of July 97. Hence, the assessment was time barred. The reason given by the Tribunal as that every act of search was completed on 28/7/97 and nothing remained to be done with reference to the shares & jewellery since the same had alre3ady been inventorised and valued. Further nothing was done on 8/9/97 except lifting the order. Therefore, the order u/s 132(3) was invalid LT1 view of Bombay High Court judgment in the case of Sandhya Naik (supra). Similar view has been taken by the tribunal in the case of DCIT vs. Adolf Patrie Pinto 100 ITD 191 (Mum), Sarb Consulate Marine Products 97 ITD 333(Del). In the case of V. L. S. Finance Ltd. Vs. CIT 289 ITR 286 (Del), a search warrant was issued and search was conducted on 22/6/98. However, due to voluminous record, search has to be conducted again and again till 5/8/98 when the as panchnama was prepared. The block assessment remained pending till 29/6/2000 when order for special audit U/S 142(2A) was passed which was allegedly not received by the assessee by 30/6/2000. The assessee challenged the said order in the writ petition before the Hon 'ble Delhi High Court. Later on, the petition was amended to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person in whose case the warrant of authorization has been issued. The said Explanation is with regard to authorization referred to sub-section (1) which refers to lat of the authorizations. Which means that the last of the panchanam has to be taken into account in respect of last of the authorizations for search, as there could be more than one panchnamas in respect of same authorization The curx of the matter remains that the limitation shall start from the end of the month in which last of the authorization is executed. We do not agree with the contentions of the Ld. CIT DR that all the authorizations are to be treated as common kitty and the last date of any of the authorizations should be taken as starting point for the purpose of limitation." The section 158BE clearly stated that the limitation will start from the end of the month in which la t of the authorizations was executed. It pre-supposes that there can be a situation where more than one authorizations for search U/S 132 are issued and the execution of the last of the such authorizations is to be considered as the starting point for the purpose of limitation. It clearly refers to the last authorization in case w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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