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TMI Blog2015 (8) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... RDER PER J. S. REDDY, AM: These are cross appeals filed by revenue and the assessee against the order of Ld. CIT(A) I, New Delhi dated 14.01.2011 for the Assessment Year 2006-07. 2. The brief facts of the case are that the main allegation against this group was that they had taken a large number of accommodation entries in various group companies by paying cash to the various entry operators. After recording satisfaction note, a notice u/s 153C as issued on 24.11.2008 to the assessee requiring it to file the return of income in the prescribed form. In response the assessee company vide letter dated 30.12.2008 submitted that the previous return declaring income at ₹ 12,43,2201- filed on 30.03.2007 may kindly be deemed as the return of income submitted in response to notice 153C. Notice u/s 142(1) dated 15.11.2008 was issued to the assessee fixing the case for hearing on 8.12.2008. Further notice u/s 143(2) was issued on 15.09.2009 for 25.09.2009. On 25.09.2009 a questionnaire asking certain documents was issued fixing the case for 05.10.2009. A supplementary questionnaire along with notice u/s 142(1) was also issued on 6.11.2009 and the hearing was fixed hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 while the same was made on 24.12.2009. This ground relates to limitation of assessment hence it can be taken at any time during the pendency of appeal which is a settled law. 6. After hearing rival contentions, we admit this additional ground of cross objection by following the Delhi Bench G decision in the case of ACIT Vs J. H. Finvest Pvt. Ltd. in I.T.A. No. 1291-1297/Del/2011 and others order dated 30.05.2014 wherein, in para 6 7 it is held as under: 6. Considering the above submission, we are of the view that it is now a well settled proposition of law that while adjudicating objections raised in the cross- objection, the same will be disposed of as an appeal.. Thus, it does not make difference as to whether an additional ground is raised in the appeal or the cross objection. The only requirement for permitting adjudication of an additional ground is that the issue raised is legal in nature it goes to the root of the matter and for adjudication of which no fresh material outside the record is required to be considered. The Hon'ble Supreme Court in the case of NT PC Ltd. Vs. CIT (Supra) has been pleased to deal with the issue in detail and has come to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is wrong to contend that the Tribunal should not have permitted the assessee to raise the additional plea of limitation for the first time. The Special Bench of the Tribunal in the case of Mahindra Mahindra Ltd. Vs. DCIT (supra) has held as under:- Be that as it may we find that the question of limitation goes to the very jurisdiction of the matter. If the proceedings are initiated or completed beyond the prescribed time then such proceedings deserve to be quashed. It is the settled legal position that there can be no embargo on any party to raise a legal ground for the first time before the Tribunal provided the relevant material for deciding that question already exists on record and no further investigation of facts is required. 7. Considering these material aspect, we are of the view that the assessee is very much entitled to raise the additional ground in question and since the issue of assessment being barred by time limitation, a legal issue goes to the root of the matter and adjudication of which does not require consideration of fresh material beyond record, we allow this additional ground for the adjudication of the Bench. The parties were permitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es where last of the authorizations for search U/S 132 or for requisition U/S 132A was executed before 114/2004. Where such authorization has been executed on or after 1/4/2004, the period of limitation would be 21 months as per the second proviso. The third proviso provides the period of limitation as 3 months where (i) last of the authorization U/S 132 or 132 A was executed on or after 1/4/2005 and (ii) during the course of assessment proceedings a reference U/S 92C A_(a) was made before 11612007 but an order U/S 92 CA (3) was not made before such date or (b) is made on or after 1/6/2007. That means where order U/S 92CA(3) has been made before 1/6/2007, the period of limitation would be as per the main provisions of sub section (1) or the first or second proviso as the case may be. The forth proviso is applicable to the proceedings which were initiated with reference to, Section 153C and reference to U/S 92CA has been made as mentioned in the third proviso. In such cases, the period of limitation is 33 month from the end of the financial year in last of authorization U/S 1321132A was executed or 21 months from the end of the financial year in which books of accounts or documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then it must be duly inventorised in the presence of witnesses. Further, if any seizure is required to be made, then the same should also be made- in their presence. Once it is done, the same should be truly recorded in such panchnama. Search can be said to be concluded if all these transactions are complied with. In this regard we find strength from the contents of para 6 of the order of judicial member in the case of Nandlal Gandhi 115 ITD I (Mum). In the case of CIT Vs. Sandhya P Naik 253 ITR 534 (Born), the question was whether the prohibitory order U/S 132(3) would extend the period of limitation U/S 158 BE. The Court decided against the revenue by observing as under: Action U/S 132(3) of the Income-tax Act can be restored to only if there is any practical difficulty in seizing the item which is liable to be seized. When there is no such practical difficulty the officer is left with no other alternative but to seize the item, if he is of the view that it represented undisclosed income. Power U/S 132(3) of the Income-tax Act thus cannot be exercised so as to circumvent the provisions of section 132(3) read with section 132(5) of the Income-tax Act. The position h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nama would depend on the validity of the order U/S 132(3). In the case of Nand Lal Gandhi-Vs. ACIT 115 ITD l(Mum) (TM), search was conducted on 28/7/97 in the course of which certain incriminating materials including shares and jewellery were found which were inventorised. Valuation of jewellery was also made. A Panchnama was prepared in which it was mentioned that only books of account and documents were being seized and the search was stated to be temporarily concluded. A prohibitory order was issued U/S 132(3) in respect of the shares and jewellery which was lifted on 8/9/97. A panchnama was also prepared on that day which merely stated that search was concluded. The block assessment was concluded on 30/9/99. The question before the Tribunal was whether assessment was time barred. The Tribunal, by majority opinion, held that panchnama dated 8/9/97 as well as restraint orders were invalid and therefore, the period of limitation was to be counted from the end of the month of July 97. Hence, the assessment was time barred. The reason given by the Tribunal as that every act of search was completed on 28/7/97 and nothing remained to be done with reference to the shares jewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 112/96 was issued on three dated i.e. 17112/96, 23112/96 and 3011/97, the case of revenue was that period of limitation would commence from the end of the month of January 97 while the case of assessee was that it would commence from the end of the month of December 96. The Tribunal agreed with the contention of assessee-by observing as under: 16. From 'bare reading of Section 158BE it is clear that the assessment has to be concluded U/S 158BC, in cases where the search is initiated after 30/611996 but before 1/6/1997, within one year from the end of the month in which the last of the authorizations for the search U/S l32 was executed. The Explanation 2 of Section 158BC was inserted by Finance (No.2) Act, 1998 with retrospective effect from 11711995, which makes it clear that the authorization referred to sub-section (1) of Section 158BE shall be deemed to have been executed on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorization has been issued. The said Explanation is with regard to authorization referred to sub-section (1) which refers to lat of the authorizations. Which means that the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06. 10.5 In view of above decisions when we examine the facts of the present case, we find that in all the cases before us assessments u/s 153A and 153C have been framed in pursuance to search made on 211312007 and concluded on 23/J/2007 on the authorization dated 20.3.2007. Thereafter no search relating to the aforesaid assessees was made, only prohibitory orders have been revoked that too relating to assets of Smt. Neena Jain inventory of which was already made on 21/3/2007. Thus, the assessments in question were required to be framed by 31112/2008 while the same have been framed in December, 2009. We also note that in the authorization letter dated 20/3/2007 names and address of the assessees 'in question have not been mentioned but in Panchnama dated 15/5/2007 drawn in pursuance to the execution of the said authorization letter dated 2013/2007 names of all these asses sees have been mentioned. Panchnama also shows that on 15/5/2007 search at residential premises started at 4.25 pm and concluded on 6:45 pm and in this search nothing related to the assessee's in question was seized. We thus find substance in the contention of the Ld. AR fu'1d fully concur with h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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