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TMI Blog2015 (10) TMI 1760X X X X Extracts X X X X X X X X Extracts X X X X ..... 3158 to 3162/Del/2011 265 to 269/Del/2011 31.03.2011 3167 to 3170/Del/2011 270 to 273/Del/2011 31.03.2011 3173 to 3177/Del/2011 282 to 286/Del/2011 25.03.2011 5325/Del/2013 1/Del/2015 10.07.2013 4753/Del/2011 227/Del/2012 25.08.2011 Appeals filed by the Assessee Date of CIT(A)'s order 1682 & 1683/Del/2012 05.01.2012 5024 & 5025/Del/2011 14.09.2011 & 02.09.2011 2. Since the issues involved in these appeals and the Cross Objections are similar which were heard together, so these are being disposed off by this consolidated order for the sake of convenience and brevity. The assessees also moved different applications each dated 13.05.2014 for admission of additional ground of the Cross Objections in respect of the different assessment years. 3. First we will deal with the Cross Objection relating to M/s Surya Vinayak Industries Ltd. in CO No. 265/Del/2011. Following grounds have been raised in this Cross Objection: "1. Whether the assessment framed under section 153A/143(3) of the Income Tax Act, 1961 is legal, when consequent upon action taken by the department under section 132 of the Act on 21.03.2007 against the assessee was carried out and nothing incrimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he First Appellate Authority and hence it may be rejected. The reliance was placed on the judgment of the Hon'ble Calcutta High Court in the case of Indian Steel and Wire Products Ltd. Vs CIT reported at 208 ITR 740. 6. We have considered the submissions of both the parties and carefully gone through the material available on the record. In our opinion, the issue raised by the assessee vide additional ground is purely a legal issue, it goes to the root of the matter and for adjudication of this ground, no fresh material outside the record is required to be considered. On a similar issue the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs CIT (supra) has held as under: "Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." 7. On an identical issue the ITAT Delhi Bench 'G', New Delhi in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal with the open heart and clean hands. He cited the decision of Hon'ble Calcutta High Court in the case of Indian Steel & Wire Products Ltd. Vs. CIT (1994) 2008 ITR 740 (Calcutta) holding that the Tribunal is to decide only such issues which were the subject matter of the first appeal, otherwise the Tribunal would be reduced to the first appellate authority. He submitted that since the additional ground now raised was never raised earlier before the authorities below, it cannot be said to be arising out of the first appellate order hence it may be rejected. He submitted that since the issue of limitation is firstly not a pure question of law and secondly on this issue all the facts are not available on the records of the Tribunal originally and subsequently, hence it cannot be entertained now. Even by virtue of Hon'ble Supreme Court Judgment in NTPC case, the additional ground cannot be allowed to be raked up now. The Ld. CIT DR submitted further that the additional ground has been now raised for the sake of raising because as the factual matrix shows this ground is raised incorrectly. 6. Considering the above submission, we are of the view that it is now a well settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any point of time before us during the pendency of the appeal. This view is well supported by the Hon'ble Supreme Court in the case of Union of India Vs. British India Corporation Ltd. (Supra) holding that the question of limitation as a mandate to the forum and irrespective of the fact whether it was raised or not, the forum must consider and apply it, if there is no dispute on facts. The Hon'ble M.P High Court in the case of CIT Vs. Md. Iqbal (Supra) has been pleased to hold that the question of limitation can be raised at any point of time because it goes to the root of the matter. Therefore, it is wrong to contend that the Tribunal should not have permitted the assessee to raise the additional plea of limitation for the first time. The Special Bench of the Tribunal in the case of Mahindra & Mahindra Ltd. Vs. DCIT (supra) has held as under:- "Be that as it may we find that the question of limitation goes to the very jurisdiction of the matter. If the proceedings are initiated or completed beyond the prescribed time then such proceedings deserve to be quashed. It is the settled legal position that there can be no embargo on any party to raise a legal ground for the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed a substantial relief to the assessee. Now against the relief allowed, the department preferred an appeal while the assessee had filed the Cross Objection against the sustenance of addition and also challenged the validity of the assessment order framed u/s 153A/143(3) of the Act by stating that the same is barred by limitation. 11. The ld. Counsel for the assessee submitted that the search was conducted at the office premises Zone H 4/5, Plot No. 53-55, Suvidha Kunj, Pitampura, Delhi-34 in the case of Surya Vinayak Group of cases. It was further submitted that no incriminating material was found as a result of search and the assessment framed u/s 153A without any seized material and documents founds during the course of search was against the provision of section 153A of the Act and it was merely change of opinion from the earlier order passed by the AO. The ld. Counsel for the assessee also submitted that the search took place at the residence of Sh. Sanjay Jain and Sh. Rajiv Jain, Directors of the assessee company and at the business premises of the assessee company on 21.03.2007 at 8:45 PM and concluded at 6 AM on 22.03.2007 which clearly shows that whole night search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and deserves to be quashed as per the aforesaid referred to order dated 30.05.2014. The reliance was placed on the following case laws: DCIT Vs Adolf Patric Pinto 284 ITR (A.T) 207 (SC). CIT Vs Deepak Agarwal 308 ITR 116 (Del.) CIT Vs White and White Mineral Pvt. Ltd. 330 ITR 172 (Raj) CIT Vs O.P Mandora 94 DTR (Raj). 209 ACIT Vs Shri Ram Lime Products Ltd. 2012 TIOL 329 ITAT Jodhpur Rakesh Sareen Vs DCIT 2011 TIOL 185 HC- Mad-IT CIT Vs Plastica Enterprises ITA 1211 (2008) Mum. Rakesh Kuamr Jain Vs JCIT dated 25/9/2012 (Mad.) Tax Case 1240/06. 12. In his rival submissions the ld. DR submitted that the issue under consideration is not covered by the earlier order dated 30.05.2014 passed by the ITAT in the case of J. H. Finvest Pvt. Ltd. which belongs to the same group to which the assessee belongs and even the Bench is not bound to follow the order of other Bench and that the earlier decision may not be treated as precedence because the facts of each case are to be seen. It was contended that in the decision relied by the ld. Counsel for the assessee, the arguments advanced on behalf of the department were not considered and appreciated in right prospect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC) Smt. Krishna Verma Vs ACIT 113 ITD 655 (Del) (SB) 15. In his rejoinder the ld. Counsel for the assessee submitted that it is wrong to say that search was temporarily concluded because it continued even when Sh. Sanjay Jain and Sh. Ramesh Sareen fell ill and practically the search was concluded on 22.03.2007 when panchnama was drawn and jewellary was seized. It was reiterated that the restraint order was lifted on 15.05.2007 at 4:25 PM, the earlier jewellary seized was released, only a part of jewellary belonging to Smt. Neena Jain which was valued on 21.03.2007 was seized and the search was conclude at 6:45 PM. Therefore, practically there was no search on 15.05.2007 and in fact the search was already concluded on 22.03.2007 at 6 AM. It was further stated that the facts of the present case are identical to the facts involved in the case of M/s J. H. Finvest Pvt. Ltd. Vs ACIT in CO Nos. 131 to 137/Del/2011 order dated 30.05.2014. Therefore, the consistency is to be maintained and the assessment order framed by the AO which was barred by limitation deserves to be dismissed. 16. We have considered the submissions of both the parties and perused the material available on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t day of April, 2004 but before the 1st day of April, 2010],- (i) the provisions of clause (a) or clause (b) of this sub-section shall have effect as if for the words "two years" the words "twenty-one months" had been substituted; (ii) the period of limitation for making the assessment or reassessment in case of other person referred to in Section 153C, shall be the period of twenty-one months from the end of the financial year in which the last of the authorisations for search under Section 132 or for requisition under Section 132A was executed or nine months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under Section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:]" 17. In our opinion, the provisions contained in the above second proviso to Section 153B of the Act are applicable to the facts of the present case which clearly provides that the assessment u/s 153A is required to be completed within 21 months from the end of the financial year in which last of the authorization for search u/s 132 of the Act was executed. In the present case, the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153C has to be made within the period of two years as mentioned in the preceding paragraph or one year from the end of the financial year in which books of accounts or documents or assets seized or requisition are handed over u/s 153C to the AO having jurisdiction over such other persons, whichever is later. However, the period specified under various clauses of the Explanation to Section 153B will have to be excluded while computing period of limitation u/s 153B. This limitation period is applicable to those cases where last of the authorizations for search u/s 132 or for requisition u/s 132A was executed before 1/4/2004. Where such authorization has been executed on or after 1/4/2004, the period of limitation would be 21 months as per the second proviso. The third proviso provides the period of limitation as 33 months where (i) last of the authorization u/s 132 or 132 A was executed on or after 1/4/2005 and (ii) during the course of assessment proceedings a reference u/s 92CA(a) was made before 1/6/2007 but an order u/s 92 CA (3) was not made before such date or (b) is made on or after 1/6/2007. That means where order u/s 92CA(3) has been made before 1/6/2007, the period of limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to safeguard the interest of the person where premises have been searched and to curb the misuse of the powers of search party. That means the requirement of the presence of witnesses is a sine qua non for conducting of a valid search in respect of which panchnama is to be prepared. Further, the object behind this requirement is that, anything found and seized is truly recorded in the panchnama. If nothing is found, then such fact must be mentioned in the panchanma. On the other hand, if something is found, then it must be duly inventorised in the presence of witnesses. Further, if any seizure is required to be made, then the same should also be made in their presence. Once it is done, the same should be truly recorded in such panchnama. Search can be said to be concluded if all these transactions are complied with. In this regard we find strength from the contents of para 6 of the order of judicial member in the case of Nandlal Gandhi 115 ITD 1 (Mum). In the case of CIT Vs. Sandhya P Naik 253 ITR 534 (Bom), the question was whether the prohibitory order u/s 132(3) would extend the period of limitation u/s 158 BE. The Court decided against the revenue by observing as under: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on February 11, 1991, and the petitioners were unable to give any valid explanation as demanded by the respondents, then the only power which could have been exercised or should have been exercised by the authorized officer was to effect seizure." Though the above decision was rendered with reference to limitation u/s 132(5) of the Act yet it would be relevant for deciding the issue of limitation u/s 132(3) would affect the period of limitation in as much the validity of last panchnama would depend on the validity of the order u/s 132(3). In the case of Nand Lal Gandhi Vs. ACIT 115 ITD l(Mum) (TM), search was conducted on 28/7/97 in the course of which certain incriminating materials including shares and jewellery were found which were inventorised. Valuation of jewellery was also made. A Panchnama was prepared in which it was mentioned that only books of account and documents were being seized and the search was stated to be temporarily concluded. A prohibitory order was issued u/s 132(3) in respect of the shares and jewellery which was lifted on 8/9/97. A panchnama was also prepared on that day which merely stated that search was concluded. The block assessment was conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However an interesting question arose about the scope of the expression "last of the authorizations" mentioned in Section 158BE before the Tribunal in the case of Shah Rukh Khan Vs. ACIT 104 ITD 221 (Mum). In that case, one authorization was issued in respect of residence on 17/12/96 while two authorizations were issued on 23/12/96 in respect of two lockers. In respect of search of lockers, panchnamas were prepared on the same date. However, the authorization dated 17/12/96 was issued on three dates i.e. 17/12/96, 23/12/96 and 30/1/97, the case of revenue was that period of limitation would commence from the end of the month of January 97 while the case of assessee was that it would commence from the end of the month of December 96. The Tribunal agreed with the contention of assessee by observing as under:- "16. From bare reading of Section 158BE it is clear that the assessment has to be concluded u/s 158BC, in cases where the search is initiated after 30/6/1996 but before 1/6/1997, within one year from the end of the month in which the last of the authorizations for the search u/s 132 was executed. The Explanation 2 of Section 158BC was inserted by Finance (No.2) Act, 1998 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1/2/2010. CIT Vs. O.P Mandora 94 DTR (Raj). 209 dated 23/8/2013. ACIT Vs. Shri Ram Lime Products Ltd. 2012 TIOL 329 ITAT Jodhpur Special Bench dated 61612012. Rakesh Sareen Vs. DCIT 2011 TIOL 185 HC- Mad-IT CIT Vs. Plastica Enterprises ITA 1211 (2008) Mum. Dated 15/12/2008 Rakesh Kuamr Jain Vs. JCIT dated 25/9/2012 (Mad.) Tax Case 1240/06. 10.5. In view of above decisions when we examine the facts of the present case, we find that in all the cases before us assessments u/s 153A and 153C have been framed in pursuance to search made on 21/3/2007 and concluded on 23/3/2007 on the authorization dated 20.3.2007. Thereafter no search relating to the aforesaid assessees was made, only prohibitory orders have been revoked that too relating to assets of Smt. Neena Jain inventory of which was already made on 21/3/2007. Thus, the assessments in question were required to be framed by 31/12/2008 while the same have been framed in December, 2009. We also note that in the authorization letter dated 20/3/2007 names and address of the assessee in question have not been mentioned but in Panchnama dated 15/5/2007 drawn in pursuance to the execution of the said authorization letter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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