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of <h1>Tribunal Confirms Oversight on Search Activities & Assessment Orders u/s 158BC & Limitation Periods.</h1> <h3>C. Ramaiah Reddy. Versus Assistant Commissioner Of Income-Tax.</h3> C. Ramaiah Reddy. Versus Assistant Commissioner Of Income-Tax. - [2004] 268 ITR (A. T.) 49, [2003] 87 ITD 439, [2003] 81 TTJ 1044 Issues Involved:1. Tribunal's power to examine search activity and determine the conclusion of search.2. Interpretation of the term 'execution of the warrant' under section 158BE.3. Continuation and conclusion of search involving prohibitory orders.Summary:Issue 1: Tribunal's Power to Examine Search ActivityThe Tribunal has the power to examine the search activity from the beginning to determine whether the assessment made under section 158BC is within the limitation prescribed under section 158BE. This includes verifying the existence of a valid search warrant and the validity of the panchnama. However, the Tribunal cannot decide on the necessity or propriety of actions taken during the search, such as the issuance of prohibitory orders under section 132(3). The Tribunal's role is limited to ensuring that the assessment order is legally valid and within the prescribed time limit.Issue 2: Interpretation of 'Execution of the Warrant'The term 'execution of the warrant' under section 158BE should be interpreted to mean the conclusion of the search as recorded in the last panchnama. The limitation period for passing an order under section 158BC starts from the end of the month in which the last panchnama is drawn, indicating the conclusion of the search. The issuance of prohibitory orders and successive visits based on the initial authorization do not extend the commencement of the limitation period. The search is deemed to be continuing until all materials and valuables are either seized or released, and a final panchnama is prepared.Issue 3: Continuation and Conclusion of SearchA search involving the issuance of prohibitory orders under section 132(3) is considered continuing until the authorized officer declares the search concluded by issuing a panchnama. The search comes to a close only when the authorized officer states that he will no longer visit the premises. The Tribunal cannot question the administrative decision to issue prohibitory orders or the timing of their revocation. The limitation period for completing the assessment starts from the date of the last valid panchnama, regardless of whether the items under prohibitory orders were seized or not.Conclusion:The Tribunal has the authority to examine the search activity to determine the validity of the assessment order under section 158BC and whether it is within the limitation period prescribed under section 158BE. The term 'execution of the warrant' refers to the conclusion of the search as recorded in the last panchnama, and the search is considered continuing until the authorized officer declares it concluded. The Tribunal cannot question the necessity or propriety of actions taken during the search, such as the issuance of prohibitory orders.
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