TMI Blog2016 (5) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 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 cross appeals filed by the parties are directed against the order dated 19.12.2003 passed by Learned CIT(A), Central-VII, Mumbai for the block period ending 15.10.1997. 2. The assessee is engaged in the business of share trading, share broking and financing activities. The revenue carried out search and seizure operations in the assessee s group including the assessee. Accordingly, the AO framed the assessment in the hands of the assessee u/s 158BC of the Act. The appeal filed by the assessee before 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 impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts to conclusion, since subsequent search action was carried out only to lift the Prohibitory orders and pass it again. Accordingly, the assessee contended that the last panchanama in respect of the authorisation executed on 14.10.1997 is 16.10.1997 only and the same is required to be taken for the purpose of computing the time limit available for completion of assessment. He 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 submitted that the AO has, however, passed the block assessment order only on 31.1.2000 and hence the same is barred by limitation. 6. The Ld A.R also submitted that the subsequent search conducted for passing P.O was conducted by the officers, who were not authorised in the search warrant prepared on 14.10.1997. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined 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 Act by an officer not authorised in this behalf will not extend the limitation period. In the instant case, the undisputed fact remains that the search action including the search conducted for passing P.O were conducted under the Warrant of authorisation dated 14.10.1997. The discussions made in the preceding paragraph would show that certain unauthorised officials, i.e., officials who were not authorised under warrant of authorisation dated 14.10.1997, have conducted search on certain dates and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (100 ITD 191)) following the law laid down by the Hon ble jurisdictional High Court of Bombay in CIT vs. Mrs. Sandhya P. Naik Others (2002) 253 ITR 534(Bom), has decided the similar issue in favour of the assessee. In the said case 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(3) is an administrative act and it is the domain of the authorised officer to decide during the course of search if any prohibitory order is required to be passed or not. However, in order to determine whether the search has come to and or not, what is required to be seen whether the documents are valuable beings kept under have been appraised or not. Explanation 2 to section 158 BE does not mean that the time limitation will not start till the prohibitor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hnama 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 held that for the purpose of limitation for block year assessment, the date of limitation commences from the date of panchnama which reveal that a search was carried out on the day to which it relates. If it is found that the panchnama does not reveal that a search was at all carried out on the date to which it relates then it would not be a panchnama relating to a search and consequently, it would not be a panchnama, which finds mention in explanation-2 to section 158BE of the Act. It is this proposition which has been upheld by Hon ble Jurisdictional High Court in CIT vs. White White Minerals Pvt. Ltd.(supra). 13. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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