Block assessment limitation turns on the last valid search authorisation; later panchnamas under a prohibitory order do not extend time.

Block assessment limitation under Section 158BE runs from the end of the month in which the last search authorisation is executed. A later visit only to inspect materials covered by a prohibitory order does not amount to a fresh search, and later panchnamas cannot extend the limitation period. On the facts, the search was concluded when the search party left the premises, so the later panchnamas could not shift the starting point of limitation. The block assessment order was therefore held time-barred and set aside in favour of the assessee.

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Issues: Whether the block assessment was barred by limitation under Section 158BE of the Income-tax Act, 1961, where the search had ended with the first panchnama and later panchnamas were drawn only in connection with prohibitory orders.

Analysis: The period for completion of block assessment runs from the end of the month in which the last authorisation for search is executed. A subsequent visit to inspect materials covered by a prohibitory order does not amount to a fresh search requiring the limitation period to be extended on the basis of later panchnamas. Once the search party had completed the search and left the premises, the search stood concluded for limitation purposes. The later panchnamas drawn on 08.02.2002 and 15.02.2002 could not postpone the starting point of limitation from 13.12.2001.

Conclusion: The block assessment order dated 27.02.2004 was time-barred and liable to be set aside. The issue was decided in favour of the assessee.

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