Limitation for block assessment depends on the last real search panchnama; lifting a restraint order does not extend time.

Section 158BE limitation runs from the end of the month in which the last valid search authorisation is executed, as reflected by the last panchnama evidencing completion of the search. Where the residential search had already concluded on 19-6-1998 and the later panchnama on 1-8-1998 merely lifted a section 132(3) restraint order and re-inventoried the same articles, no fresh search took place and limitation did not restart. On that basis, the block assessment completed on 28-8-2000 was time-barred, and the assessee succeeded on the limitation point.

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Issues: Whether the block assessment was barred by limitation under section 158BE of the Income-tax Act, 1961 because the last authorization for search under section 132 was executed on 19-6-1998 and not on 1-8-1998.

Analysis: Section 158BE makes the period of limitation run from the end of the month in which the last authorization for search under section 132 is executed, and Explanation 2 deems execution to occur on the conclusion of search as recorded in the last panchnama. The search at the residential premises was first completed on 19-6-1998 when the shares and debentures were inventoried and placed under a prohibitory order under section 132(3). The later panchnama dated 1-8-1998 only lifted the prohibitory order and re-inventoried the same articles with distinctive numbers; no fresh search action was undertaken on that date. A restraint order under section 132(3) does not keep the search alive for limitation purposes once the items found have already been appraised and the search has otherwise concluded.

Conclusion: The last authorization was executed on 19-6-1998, the assessment completed on 28-8-2000 was time-barred, and the assessee succeeded on the limitation issue.

Final Conclusion: The block assessment was quashed as barred by time limitation, and the Revenue's appeal was dismissed.

Ratio Decidendi: For section 158BE, limitation begins from the last panchnama evidencing completion of a real search, and a subsequent panchnama merely lifting a restraint order under section 132(3) does not extend the search or postpone commencement of limitation.

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