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TMI Blog2015 (5) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that due to his preoccupation he was unable to appear before the latter to record his deposition. When the case of the assessee is that the time prescribed for assessment had expired on 31st December, 2001, he should have raised the point in his letter dated 28th January, 2002 which he did not do. Therefore prolongation of the search did not cause any prejudice to the assessee not to talk of occasioning any failure of justice. It appears from the assessment order that the assessee was served with a notice u/s 131 to appear for recording his deposition. Time to do so was extended on four occasions. The assessee by his letter dated 28th January, 2002 evinced his intention not to appear. In those circumstances the assessment was completed on 31st January, 2002 which otherwise might have been completed on or before 31st December, 2001. For the aforesaid reasons, we are of the opinion that the period of limitation has to be reckoned from 31st January, 2000. Decided in favour of the Revenue. - ITA No. 11 of 2005 - - - Dated:- 12-5-2015 - Girish Chandra Gupta And Arindam Sinha,JJ. For the Petitioner : Mr R N Bajoria, Sr.Adv. and Mr A Gupta, Adv. For the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Road, Worli, Mumbai - 18. Notice u/s.158BC dt.23.6.2000 was issued and duly served on the assessee. In response to the above notice u/s 158BC, return for the Block Period for A.Y. 1990-91 to 1999-2000 was filed on 15.9.2000 declaring total undisclosed income at NIL. During the course of search, cash to the tune of ₹ 1,06,700/- was found, of which ₹ 80,000/- were seized. Jewellery and paintings worth ₹ 15,57,021/- and ₹ 29,07,000/- respectively were found and there was no seizure. Mr. Ramesh Kr. Patodia, FCA and A/R of the assessee started effective compliance only w.e.f. 14.12.01. Mr. Patodia was requested to file some details e.g. Cash found and explanation with reference to bank Statement, if any, paintings found, jewellery, silver utensils, value added tax with reference to letters dt.8.10.99 addressed to shop owner at Sandton City etc. As stated the compliance came and Mr. Patodia filed only part of the details as per the requisition. Meanwhile, in order to record deposition of Mr. Navin Agarwal, notice u/s/131 dt. 26.12.01 was issued and served on the assessee duly but this endeavour has not been successful inspite of repeated opportunities pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on expired on 31st December, 2001, whereas the assessment order was passed on 31st January, 2002 which is clearly out of the prescribed period of limitation. He in support of his submission relied upon a judgement in the case of CIT -Vs- S. K. Katyal reported in (2009) 308 ITR 168 (Delhi) wherein the question was whether the period of limitation is to be reckoned from 17th November, 2000 when the search took place or from 3rd January, 2001 when the keys were handed back to the assessee. The question was answered in the aforesaid case as follows:- what happened on January 3, 2001, as recorded in the panchnama of that date cannot be regarded as a search. There was no looking for, no quest for something hidden. All that was done was that the seals were inspected. After they were found to be intact, they were removed and the keys were handed back to the assessee. These circumstances clearly show that no search was conducted on January 3, 2001. For a search to conclude at a particular time and date, it must have continued till that time and date. Nothing was searched for after November 17, 2000. Thus, the search was concluded on that date. It did not continue any further and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the same date and continued till June 29, 2000, during which period various articles and documents were seized. The Tribunal has recorded a finding to the effect that there was no delay in executing the search inasmuch as various lockers and steel almirah and cupboard were required to be searched. There was, therefore, no artificial extension of the search proceedings as argued by the appellants. If that be so, the search would end only upon revocation of the order passed under Section 132(3) which, in the instant case, was revoked only on June 29; 2000. The period of limitation for making an assessment order under Section 158BC read with Section 158BE of the Act would, therefore, have to be reckoned from June 30, 2000 (being the end of the month in which the last panchnama was drawn) and would end on June 30, 2002. The assessment order, in the instant case, was however made on June 27, 2002, which was well within the outer limit of two years prescribed by law. The Tribunal was, in that view, justified in repelling the contention of the assessee that the order of assessment was beyond the period of limitation prescribed for the same. In the light of what has been stated ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only upon revocation of a restraint order under section 132(3). And, therefore, the search in the present appeal concluded on January 3, 2001, on which date the restraint order was revoked. This line of thought does not appeal to us. The illogicality of this submission is easily demonstrated by asking the simple question when would the search conclude in a case where there is no restraint order. Although the Division Bench posed the question, as to when a search would come to an end where there is no restraint order, but did not answer the same. An answer to that question is to be found in Explanation 2(a) quoted above. Ordinarily an authorization for search is valid until the same has been executed. In order to avoid any controversy as to when was the authorization executed the legislature has provided in the aforesaid explanation that the authorization shall be deemed to have been executed on conclusion of search as recorded in the last panchnama. Therefore, the law insists upon a panchnama for the purpose of formal recording that the search is at an end. Without such recording the search once initiated does not come to an end. We are unable to find any justification for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablish (i) a search is essentially an invasion of the privacy of the person whose property or person is subject to search; (ii) normally, a search must be continuous; (iii) if it cannot be continuous for some plausible reason, the hiatus in the search must be explained; (iv) if no cogent or plausible reason is shown for the hiatus in the search, the second or resumed search would be illegal; (v) by merely mentioning in the panchnama that a search has been temporarily suspended does not, ipso facto, continue the search. It would have to be seen as a fact as to whether the search continued or had concluded; (vi) merely because a panchnama is drawn up on a particular date, it does not mean that a search was conducted and/or concluded on that date; (vii) the panchnama must be a record of a search or seizure for it to qualify as the panchnama mentioned in Explanation 2(a) to section 158BE of the said Act. The basis for the aforesaid views has not been disclosed. It is, though, true that a search is an invasion of privacy. But such invasion is permissible in appropriate cases. The legality of search was not in question either in the case of S. K. Katyal or before us. Therefore any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows:- As the object of all rules of procedure is to ensure a fair trial so that justice may be done, the section in terms says that any violation of the provisions to the extent narrated therein not resulting in a failure of justice does not render a trial void. The scope of clause (b) could be best understood, if a brief historical background necessitating the amendment was noticed. The Judicial Committee in Subrahmanya Ayyar v. King emperor, ILR 25 Mad 61: 28 Ind App 257 (PC) held that the disregard of an express provision of law as to the mode of trial was not a mere irregularity such as could be remedied by S.537 of the Criminal Procedure Code. There the trial was held in contravention of the provisions of Ss.233 and 234 of the Code of Criminal Procedure which provide that every separate offence shall be charged and tried separately except that the three offences of the same kind may be tried together in one charge if committed within a period of one year. It was held that the mis-joinder of charges was not an irregularity but an illegality and therefore the trial having been conducted in a manner prohibited by law was held to be altogether illegal. The Judicial Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egree rather than of kind. It will be seen from the said observations that the Judicial Committee left to the courts to ascertain in each case whether an infringement of a provision of a Code is an illegality or an irregularity. There was a marked cleavage of opinion in India whether the later decisions of the Privy Council modified the rigour of the rule laid down in Subrahmanya Ayyar s case, ILR 25 Mad 61:28 Ind App 957 and a view was expressed in several decisions that a mere mis-joinder of charges did not necessarily vitiate the trial unless there was a failure of justice, while other decisions took a contrary view. This Court in Janardan Reddy v. State of Hyderabad, 1951 SCR 344 : (AIR 1951 SC 217) left open the question for future decision. In this state of law, the Parliament has intervened to set at rest the conflict by passing Act XXVI of 1955 making a separate provision in respect of errors, omissions or irregularities in a charge and also enlarging the meaning of the expression such errors etc. so as to include a mis-joinder of charges. After the amendment there is no scope for contending that mis-joinder of charges is not saved by S.537 of the Criminal Procedure Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 2000 it appears that at 15:30 hours the search finally concluded. The admitted fact that the keys were made over and the restraint order under Section 132(3) was lifted corroborates the fact that the search finally came to an end. The search could not have been at an end on any day prior to 31st January, 2000. The object of withholding the keys was to resume the search if and when it was felt necessary. The return of the keys manifested the intention that the search was at an end. Since the law required formal recording of conclusion of search the panchnama dated 31st January 2000 was drawn up and the business transacted on the day was recorded. It is to be noticed that the period of limitation for the purposes of Income Tax Act under Section 158BE is dependent on the conclusion of search and not on the conclusion of the investigation. Investigation includes examination of witnesses which can be done under Section 131 of the Income Tax Act. The Assessing Officer wanted to examine the assessee but he did not turn up after the conclusion of the search as would appear from the assessment order quoted above. Another pertinent question in accordance with Section 465(2) of CRPC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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