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2016 (5) TMI 788 - ITAT MUMBAI

2016 (5) TMI 788 - ITAT MUMBAI - TMI - Validity of assessment u/s 158BC - Held that:- In the instant case, the search was commenced on 15-10-1997 and it was suspended on 16-10-1997 by stating that the search was concluded temporarily. The seizure of certain documents has taken place on that date only. Subsequent searches were related to lifting of prohibitory orders and placing the documents again under the P.O. Even though it is contended that certain unaccounted share certificates were seized .....

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efore 31.10.1999. However, the assessing officer has passed the order only 31.1.2000 and hence the same is barred by limitation and is liable to be quashed. Accordingly we set aside the orders passed by both the tax authorities. - Decided in favour of assessee - I. T. (SS) No. 115/Mum/2004, I. T. (SS) No. 137/Mum/2004 - Dated:- 18-5-2016 - Shri B. R. Baskaran (AM) And Ramlal Negi (JM) For the Assessee : Shri Reepal Tralshawalla For the Department : Dr. P. Daniel ORDER Per B. R. Baskaran, AM The .....

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fore Ld CIT(A) challenging the assessment order was allowed partly. Aggrieved by his order, both the parties have filed appeals before us challenging the issues decided BY Ld CIT(A) against each of them. 3. Before the Tribunal, the assessee has filed an additional ground contending that the impugned assessment order is time barred. Since it is a legal issue and since it goes to the root of the matter, we have admitted this legal issue and accordingly heard the parties on the same. 4. The facts r .....

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der (P.O.) dated 16.10.1997. b. Search commenced again on 27.10.1997 and concluded temporarily. Nothing was seized. P.O. was passed. c. Search commenced again on 03.11.1997 and concluded temporarily. Nothing was seized. P.O. was passed. d. Search commenced again on 17.11.1997 and concluded temporarily. Inventory of shares taken. P.O. was passed. e. Search commenced again on 12.01.1998 and concluded temporarily. Nothing was seized. P.O. was passed. f. Search commenced again on 15.01.1998. As per .....

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. c. Search commenced again on 12.01.1998 and concluded finaly. Nothing was seized. As per Panchanama, search action carried out for the purposes of the release of documents and shares kept under P.O. C. Chennai Office:- a. Search commenced on 15.10.1997 and concluded on the same day. Certain documents were seized and inventory of documents, cash, bank accounts and shares taken. 5. The contention of the assessee is that the search action was conducted only on 15.10.1997 as per the warrant of aut .....

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submitted that the provisions of sec. 158BE(1)(b) prescribes a time limit of two years from the end of the month in which the last of the authorisation of search under section 132 was executed (in cases where search is conducted on or after 1.1.1997). He submitted that it is a well settled proposition that the panchanama prepared for passing P.O. cannot be considered to be last Panchanama. Accordingly, the AO should have passed the block assessment order on or before 31.10.1999. The Ld A.R submi .....

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fice on 27.10.1997, 12.01.1998 and 15.01.1998 by officers named Shri K. Shivaraman and Shri K.G.Vasudevan. It is noticed that these two officials have not been named as authorised officers in the search warrant. In respect of search conducted at Radha Bhavan Office on 3.11.1997 and 17.11.1997, the officials consisted of one authorised officer only. Accordingly the Ld A.R contended that the alleged seizure of share certificates (though disputed by the assessee) that took place on 12.01.1998 and 1 .....

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made on 12.01.1998 (though disputed by the assessee) cannot be considered to be a valid seizure made in pursuance of valid search. He submitted that the facts prevailing in the case of Goldcrest Fin (India) Ltd Vs. DCIT (105 TTJ 926) are identical with the facts available in the instant case and the Tribunal has held in the above said case that the P.O. passed by unauthorised officers cannot extend the time limit for completion of assessment. 8. Accordingly, the Ld A.R contended that, for all p .....

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cates that were already seized, was pointed out to Ld D.R, he submitted the shares were unaccounted shares only. With regard to the seizure, if any, conducted by the unauthorised officers, the Ld D.R maintained that they have been deputed by competent authorities only. 10. We have heard rival contentions on this issue and perused the record. The Hon ble jurisdictional Bombay High Court has held in the case of CIT Vs. Sandha P Naik (253 ITR 534) that the Prohibitory order passed us 132(3) of the .....

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d they have also claimed to have seized share certificates. Hence the alleged seizure of search by the unauthorised officers cannot extend the limitation period as held by the co-ordinate bench of Tribunal in the case of Goldcrest Fin (India) Ltd (supra). 11. Another important contention of the assessee is that the search conducted in order to life and/or to pass P.O cannot be considered to be the last of authorization referred to in sec. 158BE of the Act. In the following case laws, it has been .....

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Nandlal M Gandhi Vs. ACIT (115 ITD 1)(Mum)(TM). (h) Plastika Enterprises Vs. ACIT (IT(SS)A 238 and 373/Mum/03 dated 28-07-2006. This order of the Tribunal was confirmed by Hon ble Bombay High Court, vide its order dated 15.12.2008 passed in ITA No.1211 of 2008. (i) ACIT Vs. White & White Mineral (P) Ltd (114 TTJ 405)(Jodh). (j) ACIT Vs. Shree ram Lime products (17 ITR (Trib.) 1 (SB). 12. Recently, this bench of the Tribunal has considered an identical issue in the case of Shri Jamnalal Puro .....

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rd, the search was contended on 15/12/1997 and panchnama was prepared on same date i.e. on 15/12/1997 vide which prohibitory orders u/s 132(3) in respect of bank account etc. were made. The prohibitory orders were lifted on 06/01/1998 by preparing another panchnama wherein it was stated that search was commenced at 1.30 PM and concluded at 2.00PM and that search was finally concluded. The Ld. CIT(A) has dismissed the plea of the assessee on the ground that the last panchnama, within the meaning .....

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se the Hon ble court has held that by passing a restraint order under section 132(3) the time limit available for framing block assessment order cannot be extended. Similarly, by simply stating in panchnama that the search is temporary the suspended the authorised officer cannot keep the search proceeding in operation by passing a restraint order under section 132(3). The coordinate bench in Adolf Patrick Pinto s case (supra) has held as under;- The passing of prohibitory order under section 132 .....

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n operation……. 6. In the case before coordinate Bench, the search party visited twice at the residential premises of the assessee on June 19, 1998 and August 1, 1998. On the first visit itself the house was searched and the shares and debentures found were invenorised and kept in the cupboard in the bedroom and prohibitory order was passed under section 132(3) and it was mentioned in the order that all the shares and debentures belonging to the assessee and his family members were .....

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ase and the case law referred to above, we are of the view that the last of the authorisation was executed on June 1998 and the panchnama prepared on August 1, 1998 was only for the purpose of lifting prohibitory orders and cannot be treated as execution of the search warrants. Having held so we hold that the assessment order passed under section 158 BC on August 28, 2000, was barred by time limitation as provided under section 158 BE and the same is quashed 7. In A. Prakash Kumar Jain versus Jo .....

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the end of the search and what could be postponed is only seizure of the article and issuance of prohibitory order; however, limitation for the completion of the block assessment begins on the conclusion of the search and issuance of panchnama and in case of single authorisation, the moment such party leaves the premises by drawing of the panchnama noting conclusion of the search, the limitation period begins. 8. The co-ordinate Benches of ITAT, Mumbai as well as the other Benches of ITAT have .....

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