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TMI Blog2006 (2) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... s were not appraised by the Search Party on 19-6-1998. No search proceedings as envisaged u/s 132(1) took place on 1-8-1998 only another inventory was prepared and the shares and debentures were release. The passing of prohibitory order u/s 132(3) is an administrative act and it is the domain of the authorized officer to decide during the course of search if any PO is required to be passed or not. However, in order to determine whether the search as come to end or not, what is required to be seen whether the documents or valuables being kept under PO have been appraised or not. The Explanation 2 of section 158BE does not mean that the time limitation will not start till PO passed u/s 132(3) is in operation. This view also finds support from the order of Special Bench in the case of C. Ramaiah Reddy v. Asstt. CIT [ 2003 (7) TMI 260 - ITAT BANGALORE] . We are of the view that the last of the authorization was executed on 19-6-1998 and the Panchnama prepared on 1-8-1998 was only for the purpose of lifting of PO and cannot be treated as execution of the search warrants. Having held so we hold that the assessment order passed u/s 153BC on 28-8-2000 was barred by time limitation as provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation for completion of block assessment as provided under section 158BE of the Income-tax Act, 1961. 6. The relevant facts as stated are that the first Panchnama was drawn at Office No. 922B, 9th Floor, Dalai Street, at Stock Exchange Building, Mumbai on 18-6-1998 which is placed on pages 175 and 176 of the paper book and it was mentioned that the search is temporarily concluded. 7. The second Panchnama was drawn which is placed at page 181-182 of paper book, at House No. 23, 2nd Floor, Atmaram Building, Francis Xavier Lane, Mumbai on 19-6-1998 and it was mentioned that the search is temporarily concluded. On this date certain shares and debentures were found and inventorised as per the Annexure-I of the said Panchnama and were kept in the Steel cupboard in the bed-room and prohibitory order under section 132(3) was passed. 8. Another Panchnama was drawn at Office No. 922B, 9th Floor, Dalai Street, Mumbai on 24-6-1998 at pages 187 and 189 of the paper book and it was stated that the search is temporarily concluded. Two computer servers and computer's floppies were kept in the right side of the wooden cabinet at the same premises and prohibitory order under section 132(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iety v. Asstt. CIT [2002] 76 TTJ (Bang.) 948. (vi) M. Sivaramakrishnaiah Co. v. Asstt. CIT [2005] 93 TTJ (Visakhapatnam) 1035. 13. On the other hand, the learned DR Shri Ashwin Kumar stated that the last authorization was executed on 1-8-1998 as the shares and the debentures were required to be identified as the distinctive numbers were not mentioned at the time of preparation of the inventory on 19-6-1998 and he drew our attention to pages 298 to 302 which is the inventory of shares and debentures found during the search at House No. 23, Second Floor, Atmaram Building, Francis Xavier Lane, Mumbai which was prepared and signed on 19-6-1998 on which the distinctive numbers have not been mentioned. He also drew our attention to page No. 200C, which is the list of shares and debentures prepared on 1-8-1998 at the said premises mentioning the same shares along with their distinctive numbers. He further stated that it was a valid search and the block assessment has been completed within the prescribed time as provided in Chapter-XIV-B. He further stated that in the case of Mrs. Sandhya P. Naik, the block assessment was held to be invalid on account of various irregularities noted by Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(3). Once all the materials and valuables, which are found during the search, are appraised the search will come to an end. The warrant under section 132(1) is issued in the name of particular officer or officers who authorized to do any one as all the actions which are mentioned in the section 132(1). The relevant provision is reproduced hereunder for ready reference:- 132.(1) Where the Director General or Director or the Chief Commissioner or Commissioner or any such Joint Director or Joint Commissioner as may be empowered in this behalf by the Board, in consequence of information in his possession, has reason to believe that- (a) to (c) * * * then,- (A) the Director General or Director or the Chief Commissioner or Commissioner, as the case may he, may authorise any Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddy v. Asstt. CIT [2003] 87 ITD 439 (Bang.) the relevant para 7.3 of the said judgment is reproduced as under:- 7.3 An interesting argument was taken up to say that a Prohibitory Order under section 132(3) which is not valid after a period of sixty days can be extended beyond such period as prescribed under section 132(8A). As per proviso to section 132(8A) the period of validity of order under section 132(3) gets extended even beyond completion of assessment proceedings. Hence even if search is not concluded, and time-limit has not commenced, assessment can be made which will in other words imply that there will not be any other time-limit even though prescribed under section 158BE. In our opinion, the interpretation of section 132(3) and 132(8A) as made is not correct. What the Explanation to section 158BE(1) says is that time-limit will start from last of the panchnama and it cannot be interpreted to mean that the time-limit will not commence till order under section 132(3) is in operation. An order under section 132(3) can be passed restraining a person in possession of books or valuables to deal with same. However, once all the materials and valuables are appraised the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; 16, 1996, and October 20, 1996, and which expired thus on October 20, 1996. The warrant was issued on October 7, 1996, and the search was conducted continuously between October 16, 1996 and October 20, 1996. In between, the search was suspended only during the late hours of the night. On October 20, 1996, having seized all the relevant materials and valuables, the search party obviously had come to the conclusion that there was no further material to be seized and no more search operation to continue. The search comes to an end when the search party leaves the premises after carrying with it the seized material and thus authorization for search is fully implemented and execution is complete. For this proposition, the income-tax Appellate Tribunal Bench, Pune, took support of the decision of the Bangalore Bench in the case of Kirloskar Investments and Finance Ltd. v. Asstt. CIT [1998] 67 ITD 504. In the present case at hand, the cupboard in which 45 kgs. of silver articles were kept was sealed by making an order under section 132(3) of the Income-tax Act. The authorized officers were obviously very much aware of the contents of the cupboard and the nature of articles in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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