TMI Blog2017 (7) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... udhary, Sr.Standing Counsel with Ms.Lakshmi Gurung, Advocate For The Respondent : Mr. Shashwat Bajpai and Mr. Sharad Agarwal, Advocates JUDGMENT Dr. S. Muralidhar 1.These appeals by the Revenue under Section 260A of the Income Tax Act, 1961 ( the Act ) arise out of similar set of facts involving similar questions of law and are accordingly disposed of by this common judgment. 2. In five of these appeals i.e., ITA Nos. 605, 606, 607, 608 and 609 of 2016 for the Assessment Years ( AYs ) 2001-02, 2002-03, 2004-05, 2006-07 and 2007-08, respectively, the Respondent/Assessee is Surya Vinayak Industries. These appeals are directed against the common impugned order dated 6th October, 2015 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA Nos. 3158-3162/Del./2011. Questions urged 3. In ITA Nos. 605-608 of 2016, the questions of law that are sought to be urged by the Revenue are as under: (i) Whether the ITAT erred in law and on facts in holding that the assessment framed by the Assessing Officer (AO) under Section 153A is barred by limitation? (ii) Whether the order passed by the ITAT is perverse and not sustainable under law? In ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 153B (1) for assessment under section 153A ignoring the fact that the present case is related to Section 153C and the time limit for completion of Assessment is 31st December, 2009 which is within the time limit for the assessment order dated 24th December, 2009. Background facts 9. The background facts in these appeals are that on the basis of Authorization dated 20th March, 2007 issued under Section 132(1) of the Act, a search was commenced on 21st March, 2007 in the office premises of Rim Zim Valley Products Pvt. Ltd., J.H. Invest Pvt. Ltd., Aakriti International; M/s JH Business and Products Pvt. Ltd. and Surya Vinayak Industries Group. The Court has been shown two of the authorisations, both dated 20th March, 2007 in regard to the above entities which were to be searched. One authorisation was for the search to be undertaken at Zone H -4/5, Plot No. 53-55, Suvidha Kunj, Pitam Pura, Delhi-110034 (hereinafter referred to as Pitam Pura premises ) and the other for the premises at I-42, Ashok Vihar, Phase- I, New Delhi (hereinafter referred to as Ashok Vihar premises ). The authorisations and panchnamas 10. In the authorizations, both the premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port is placed on the record. 13. The Court has also been shown two other authorizations bearing E. Nos. 0070 and 0071 both dated 21st March, 2007. The authorization having E. No. 0070 pertains to the search of the Locker No. 71 (Key No. 40) with the Federal Bank at Pitam Pura in the name of Ms. Neena Jain. This has two panchnamas the first one dated 21st March, 2007 shows that the warrant was in the case of Sanjay Jain, Rajiv Jain and Neena Jain and that the raids commenced on 21st March, 2007 at 3:30 pm and concluded at 3:50 pm on the same date as temporarily concluded for the day to be commenced subsequently for which purposes four seals were placed on locker No. 71... The second panchnama is dated 15th May, 2007 which shows that the searches commenced at 1:55 pm on that date and were finally concluded at 2:25 pm on the same date. The second panchnama also bears the signatures of Ms. Neena Jain by way of acknowledgment of having received a copy thereof. 14. The Authorization bearing E. No. 0071 was for the search at Locker No. 344 (Key No. 24) with the Oriental Bank of Commerce, Pitam Pura in the name of Ms. Neena Jain, Mr. Rajiv Jain and Mr. Sanjay Jain. Here again, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisition under section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years 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: Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or one year 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: Provided further that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on or after the 1st day of April, 2004 but before the Ist day of April, 2010,- (i) The provisions of clause (a) or clause (b) of this sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en will) and so on. So a panchnama is a written record of what the panch has witnessed. In Mohan Lal v. Emperor: AIR 1941 Bombay 149, it was observed that the panchnama is merely a record of what a panch sees... Similarly, the Gujarat High Court in the case of Valibhai Omarji v. The State AIR 1963 Guj 145 noted that (a) panchnama is essentially a document recording certain things which occur in the presence of Panchas and which are seen and heard by them. Again, in The State of Maharashtra v. Kacharadas D. Bhalgar (1978) 80 Bom LR 396, a panchnama was stated to be a memorandum of what happens in the presence of the panchas as seen by them and of what they heard. We have examined the meaning of the word panchnama in some detail because it is used in Explanation 2(a) to Section 158BE of the said Act although it has not been defined in the Act. A panchnama, as we have seen is nothing but a document recording what has happened in the presence of the witnesses (panchas). A panchnama may document the search proceedings, with or without any seizure. A panchnama may also document the return of the seized articles or the removal of seals. But, the panchnama that is mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iously, nothing else could be found. All that was done on 03.01.2001, in the presence of the witnesses (panchas), was that the seals were removed from the cash box and the almirah and the keys were handed back to the assessee. Essentially, the revocation of the restraint order was given effect to. This is exactly what the Tribunal found as a fact and meant when it concluded that the panchnama dated 03.01.2001 was merely a release order and could not extend the period of limitation. 20.6 The Court in CIT v. S.K. Katyal (supra) then undertook a detailed discussion of the law on the subject including the decisions in G.M. Agadi v. The Commercial Tax Officer, Belgaum [1973] 32 STC 243 (Kar.); C. Balakrishnan Nair (Dr.) v. CIT (1999) 237 ITR 70 (Ker); CIT v. Mrs Sandhya P. Naik (2002) 253 ITR 534 (Bom); CIT v. Sarb Consulate Marine Products P. Ltd. (2007) 294 ITR 444; CIT v. Deepak Aggarwal (2009) 308 ITR 116 (Del.) as well as VLS Finance Ltd v. CIT (2007)289 ITR 286 (Del). The conclusions drawn by the Court in CIT v. S.K. Katyal (supra) were as under: 26. These decisions clearly establish (i) a search is essentially an invasion of the privacy of the person whose property or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 30, 33, 35 and on person items were released . Therefore, all that happened on 15th May, 2007 was that the factum of valuation reports having been prepared already on the previous date i.e., 21st March, 2007 was noted and the jewellery items were released. Under paragraph 5(a) under the title The following were found and seized , under sub-clause (iv) it is stated that jewellery, ornaments etc. which have been inventoried separately for each place from where recovered as per Annexure-J (4 sheets vide valuation report dated 21st March, 2007 Item Nos. 1, 2, 3, 4, 5, 8, 11, 13, 15, 16, 18, 19, 20, 25, 26, 31, 32, 34, 36 and 37 seized. In fact, there was no seizure because nothing new was found. All the other items which were already valued on 21st March, 2007 and for which valuation report was already prepared were shown as seized but in fact were not seized. The net result is that on 15th May, 2007 nothing was found which had not already been found by the Department on the first day i.e., 21st March, 2007. 24. The Court is not prepared to accept the plea of the Revenue that merely because a panchnama was drawn up on 15th May, 2007 showing that the search was finally conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the various courts in this country and the law point is well settled. 25.2 The Court in C. Ramaiah Reddy v. Assistant Commissioner of Income Tax (supra) then proceeded to discuss the case law and held as under: The law does not contemplate the authorised officer to set out in any of the Panchnamas that he has finally concluded the search. If for any reason the authorised officer wants to search the premises again, it could be done by obtaining a fresh authorisation. There is no prohibition in respect of the same premises. It is open to the empowered authority to issue authorisation, but when the authorisation is issued once, the authorised officer cannot go on visiting the premises under the guise of search. Therefore, it is clear once in pursuance of an authorization issued the search commences, it comes to an end with the drawing of a Panchnama. When the authorized officer enters the premises, normally, the Panchnama is written when he comes out of premises after completing the job entrusted to him. Even if after such search he visits the premises again for investigation or inspection of the subject-matter of restraint order or prohibitory order, if a Panchnama is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re pending. Since the word, execute , also means to complete one has to wait for conclusion of the proceedings under Section 132 (3) for the purpose of computation of limitation under Section 158BE (1) and the period of the one year has to be computed from the end of the month in which the proceedings under Section 132 (3) are concluded. If there is more than one warrant, limitation will be counted from the execution of the last one. A contrary view is as much possible if one were to consider the spirit of the scheme which envisages expeditious disposal of the search cases and it would be reasonable to interpret that execution of warrant is not tantamount to completion of proceedings under Section 132 or 132A. The period during which the proceedings under Section 132 (3) remained pending has to be excluded for the purpose of counting limitation of one or two years under Section 158BE. Otherwise, it may lead to absurd results as it may take several years before restraint under Section 132 (3) is lifted and it may, thus, extend the period of one or two years by all those years during which proceedings under Section 132 (3) remained pending. It may be agreed against this view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 21st March, 2007 in respect of three of three entities, namely, J.H. Finvest Pvt. Ltd., Texefx Marble Industries (formerly known as J.H. Business Products Pvt. Ltd.) and SVIL Mines Ltd., dismissed the appeal of the Revenue. He, accordingly, submitted that the above order should automatically result in the dismissal of the present appeals as well. However, the above order of this Court was sought to be distinguished by Mr. Chaudhary appearing for the Revenue by pointing out that the said decision did not take note of the fact that there were two authorizations for two premises: at Ashok Vihar and at Pitam Pura and that the second panchnama dated 15th May, 2007 was in fact in relation to the Ashok Vihar premises. As already discussed hereinbefore, the above distinction is to no avail as far as the case of the Revenue is concerned. 28. Finally, it was contended by Mr Chaudhary that the decision in VLS Finance Ltd. v CIT (supra) supports the case of the Revenue and, therefore, the period of limitation for passing the assessment order should be calculated from 15th May, 2007. In its order in the case of CIT v. JH Invest Pvt. Ltd. (supra), this Court took note of the above decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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