2008 (7) TMI 23 - HC - Income Tax

Question was with regard to the bar of limitation in making an assessment order u/s 158 BC - search having been conducted on 29.08.96 /30.08.96, the assessment made on 31.10.1997, is barred by limitation in view of the provisions contained in Section 158 BE - impugned order having been passed beyond the period of one year from the end of the month in which the last authorization for search had been executed - no substantial question of law arises revenue s appeal is dismissed

Summary

Issues:
1. Bar of limitation in making an assessment order for the block period under Section 158 BC.

Analysis:
The appeal was filed by the revenue against the order passed by the Income Tax Appellate Tribunal concerning the block period from 01.04.1986 to 29.08.1996. The main issue raised by the assessee was the bar of limitation in making the assessment order under Section 158 BC. Section 158 BE (1) (a) of the Income Tax Act, 1961 prescribes that the order under Section 158 BC must be passed within one year from the end of the month in which the last authorization for search under Section 132 was executed. Explanation 2 clarifies that the authorization is deemed to be executed on the conclusion of the search as recorded in the last panchnama. The crucial date is the conclusion of the search as recorded in the panchnama.

In this case, there was only one panchnama prepared on 30.08.1996, clearly mentioning the date and time of the search commencement and closure. The panchnama recorded that the search started on 29.08.1996 at 8.45 pm and ended on 30.08.1996 at 3.45 pm. As per the provisions of Section 158BE and Explanation 2, the authorization was deemed executed on 30.08.1996 at 3.45 pm. The contention that the search continued after the restraint order was lifted on 17.10.1996 was rejected by the Tribunal. The Tribunal's decision was based on the factual position that the search concluded on 30.08.1996, as recorded in the panchnama, and no further material was found. Considering the clear legal provisions and factual findings, the Court found no substantial question of law for consideration and upheld the Tribunal's decision as not being perverse.

Therefore, the Court dismissed the appeal, affirming the Tribunal's decision regarding the bar of limitation in making the assessment order for the block period under Section 158 BC.