Block assessment limitation turns on the last valid panchnama, not an invalid later search document.

Limitation for a block assessment under section 158BE is computed from the conclusion of search as reflected in the last valid panchnama drawn under the warrant of authorisation. A later document does not extend limitation where the prohibitory order had not been validly extended and no lawful search or seizure took place on the later date. The recording of a statement on an intervening date does not change the statutory position, because the decisive factor remains the last valid panchnama evidencing completion of search. On the stated facts, the later panchnama was invalid and the assessment order was therefore time-barred.

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Issues: Whether the block assessment order was barred by limitation under section 158BE of the Income-tax Act, 1961, because the last valid panchnama was drawn on 19-2-1996 and the later panchnama dated 25-4-1996 was not a valid panchnama.

Analysis: The limitation under section 158BE is to be computed with reference to the conclusion of search as recorded in the last panchnama drawn in relation to the warrant of authorisation. Explanation 2 to section 158BE is clarificatory and links execution of the authorisation to the last panchnama. On the facts, the order under section 132(3) relating to the later proceedings had not been validly extended beyond sixty days under section 132(8A), no lawful search or seizure took place on 25-4-1996, and the document of that date did not constitute a valid panchnama. The statement recorded on 23-4-1996 did not alter the statutory position, as limitation is governed by the last valid panchnama and not by the date of recording of a statement. The search therefore stood concluded by the earlier panchnama dated 19-2-1996.

Conclusion: The assessment order was time-barred and the limitation objection succeeded in favour of the assessee.

Ratio Decidendi: For block assessment, limitation under section 158BE is computed from the last valid panchnama evidencing conclusion of search, and a later document drawn without a valid subsisting prohibitory order does not extend the period of limitation.

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