2012 (9) TMI 937 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) regarding assessment barred by limitation u/s 158 BC(c) of the Income-tax Act, 1961.

Summary:
The Department filed an appeal against the order of CIT(A) regarding the assessment being barred by limitation u/s 158 BC(c) of the Income-tax Act, 1961. The search and seizure operation u/s 132 of the Act was conducted at the assessee's residential premises on 3.2.1999. The Assessing Officer framed the assessment at an income of Rs. 33,22,690/- on 27.4.2001. The assessee challenged the validity of the assessment order, contending that the search was concluded on 3.2.1999, and the assessment made on 27.4.2001 was time-barred. The CIT(A) observed that the search was effectively concluded on 3.2.1999, and the block assessment order should have been passed by 28.2.2001. The CIT(A) treated the block assessment order as time-barred based on the facts and relevant case laws.

The Department contended that the time available for completing the assessment was up to 30.4.2001, and the assessment order passed on 27.4.2001 was within the time limit. However, the Tribunal noted that the search was conducted on 3.2.1999, and the prohibitory order u/s 132(3) was lifted on 13.4.1999 without anything being seized from the sealed almirah. No statement was recorded on 13.4.1999, and the proceedings were concluded within half an hour. Citing relevant case law, the Tribunal held that the actions on 13.4.1999 did not extend the time limit for passing the block assessment order. Therefore, the Tribunal upheld the CIT(A)'s decision that the assessment order was time-barred.

In conclusion, the Tribunal dismissed the appeal of the Revenue, affirming the decision that the block assessment order was time-barred based on the completion of the search on 3.2.1999 and the lack of substantive actions on 13.4.1999.