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TMI Blog2013 (11) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... by Explanation 2 with retrospective effect from 1.07.1995, the contention of the assessee cannot be accepted. Thus, with every panchanama drawn, the search team leaving the premises, the search conducted on 28.03.2003 came to an end as far as that authorisation was concerned. However the second search was admittedly on a fresh authorisation. Thus, in respect of search conducted on 27.03.2003 and 28.03.2003, panchanama was drawn with observation "search continues", thus, considering the fact that the second search was to be carried on the different premises and materials to be seized, in fitness of things, fresh authorisation was issued by the Department on 27.08.2003 and as such under Section 158BE of the Act, limitation has to be worked out from that date, i.e., the end of the month of 28.08.2003 and not with reference to the first search i.e., 27.03.2003 and 28.03.2003 – Decided in favor of Revenue. - Writ Appeal No.874 of 2011 and M.P.No.1 of 2011 and Writ Petition.Nos.21071 and 21072 of 2010 and M.P.Nos.1 and 2 of 2010 - - - Dated:- 24-9-2013 - Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Appellants : Mr. T. Pramod Kumar Chopda JUDGMENT (The Order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the order of assessment is beyond the period of limitation and therefore has to be quashed. 5. In the affidavit filed in support of the writ petition (W.P.No.25078/2005), the assessee states that as against the order of assessment dated 30.06.2005, which was impugned in the writ petition, he had filed the statutory appeal before the Commissioner of Income Tax (Appeals). As the assessee had raised question of limitation before this Court, the writ petition was preferred. 6. The Department resisted the writ petition by contending that the writ petition was not maintainable on the ground that the assessee had already filed appeal before the Commissioner of Income Tax (Appeals), who by order dated 04.01.2007 decided the appeal in favour of the assessee and against the said order, the Revenue has preferred appeal before the Income Tax Appellate Tribunal and the same was pending at that point of time. Further, the contention raised regarding the limitation was denied in the counter affidavit contending that on 26.03.2003, the residential premises of the assessee was searched and on the same date, the office premises was also searched; on 17.06.2003, various SB Accounts, FD, RD he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the Kerala High Court reported in (1999) 237 ITR 158 in the case of Dr.C.Balakrishnan Nair and another Vs. Commissioner of Income Tax and another and the unreported decision of the Delhi High Court in Commissioner of Income Tax, Delhi Vs. Deepak Aggarwal, learned Single Judge allowed the writ petition. Thus, learned Single Judge held that the impugned assessment order dated 30.06.2005 was barred by limitation. Challenging the same, the Revenue is on appeal before this Court. 8. Learned Standing counsel appearing for the Revenue contended that the last panchanama is dated 28.08.2003, therefore, the commencement of time limit of two years for the completion of assessment must be reckoned from the date of last panchanama i.e., dated 28.08.2003 and the assessment order dated 30.06.2005 passed within the period of limitation as referred to in Explanation 2(a) under Section 158BE of the Act. Learned Standing counsel appearing for the Revenue further contended that as per Section 158BE(b) read with Explanation 2(a) of the Act, the date of the last of the panchanamas should be taken for reckoning the commencement of time limit of two years for the completion of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that falls for consideration is as to whether the order of assessment dated 30.06.2005, which is impugned in the writ petition is well within the jurisdiction on the ground that it is passed beyond the period of limitation. 12. In order to appreciate the said contention, it is necessary to refer the statutory provision. Section 158BA along with Section 158BE read as under:- "Assessment of undisclosed income as a result of search. 158BA(1). Notwithstanding anything contained in any other provisions of this Act, where after the 30th day of June, 1995 a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person, then, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter. (2) The total undisclosed income relating to the block period shall be charged to tax, at the rate specified in Section 113, as income of the block period irrespective of the previous year or years to which such income relates and irrespective of the fact whether regular assessment for any one or more of the relevant assessment years is pending or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the end of the month in which the notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. Explanation 1- In computing the period of limitation for the purposes of this section,- (i) the period during which the assessment proceeding is stated by an order or injunction of any court ; or (ii) the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section; or (iii) the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee to be re-heard under the proviso to section 129 ; or (iv) in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bank, in which the assessee held his account and lockers. Pursuant to such authorisation, a panchanama was drawn on 28.08.2003, wherein, search was commenced on 28.08.2003 at 11.15 a.m., and concluded on 29.08.2003 at 12.05 p.m. In terms of the panchanama, the search concluded on 29.08.2003. In an unreported decision in Tax Case (Appeal).No.1240 of 2006, by order dated 25.09.2012 (A.Rakesh Kumar Jain Vs. The Joint Commissioner of Income Tax, Central Range IV, Chennai-600 034), this Court considered the similar question on limitation under Section 158 BE of the Act. 14. A reading of the decision of the Karnataka High Court reported in (2011) 339 ITR 210 (Karn) in the case of C.Ramaiah Reddy Vs. Assistant Commissioner of Income-Tax (IMV), wherein, heavy reliance was placed by the assessee clearly point out that the limitation in the case, where, the prohibitory order was issued following the search and panchanama was drawn, the same could be worked out not with reference to the date of the prohibitory order, but with reference to the panchanama drawn in proof of conclusion of search, as defined in Explanation 2 to Section 158BE of the Act. Applying the said decision of the Karn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 and 28.03.2003. 17. In the background of this, we do not accept the plea of the assessee to uphold the order of learned Single Judge that the assessment is barred by limitation. Consequently, the Writ Appeal is allowed, the order of learned Single Judge is set aside. Thus, the Revenue succeeds on the aspect of limitation as regards the assessment made in this case. 18. As regards the writ petitions filed in W.P.Nos.21071 and 21072 of 2011, we find that the same are filed challenging the recovery order made. The petitioner is the daughter of the defaulter. Placing reliance on the settlement deed made in her favour, the present writ petitions have been filed. 19. Considering the fact that the Act provides effective and sufficient forum for any aggrieved party to work out their remedy, we do not find any ground for this Court to interfere with the recovery proceedings at this stage to go into the questions of fact. In the circumstances, it is open to the petitioner to work out her remedy in accordance with law. 20. In the result, Writ Appeal No.874 of 2011 is allowed. M.P.No.1 of 2011 stands closed. No costs. Writ Petition.Nos.21071 and 21072 of 2010 are dismissed. No c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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