TaxTMI 
TaxTMI 
2008 (4) TMI 343
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....ice premises situated at 78/3, Janpath, New Delhi, as well as at its factory premises situated at Paonta Sahib, Himachal Pradesh. The residential premises of the directors of the assessee-company were also covered simultaneously in the said operation. During the course of the said operation, some documents were found and seized and a notice under section 158BC was issued by the Assessing Officer on August 1, 2001, consequent to the said operation. In response to the said notice, a return was filed by the assessee-company on March 31, 2002, declaring its undisclosed income for the block period at Rs. 1,49,660. During the course of block assessment proceedings, the documents found during the course of search were confronted by the Assessing Officer to the assessee-company and its explanation was called for regarding the entries found recorded therein. Accordingly, submissions were made on behalf of the assessee-company from time to time during the course of hearing before the Assessing Officer offering its explanation as sought by the Assessing Officer. The said explanation, however, was not found to be fully satisfactory by the Assessing Officer and after analysing the contents of t....
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....ner of Income-tax (Appeals), the assessee as well as the Revenue are in appeal before the Tribunal. 4. In ground Nos. 1 and 2 of its appeal, the assessee-company has challenged the action of the learned Commissioner of Income-tax (Appeals) in confirming the validity of assessment made by the Assessing Officer under section 158BC for the block period. 5. Learned counsel for the assessee, at the outset, invited our attention to the copy of panchnama drawn on September 15, 2000, placed at page Nos. 56 to 59 of his paper book and pointed out that the search and seizure operation as mentioned therein had commenced on September 14,2000, at 8.30 a.m. and was temporarily concluded on September 15, 2000, at 6.15 a.m. He submitted that the main reason for concluding the said operation temporarily and not finally as indicated in the said panchnama was that a prohibitory order was passed. He invited our attention to the copy of the said prohibitory order passed under section 132(3) on September 15, 2000, placed at page No. 93 of his paper book and submitted that the same was issued in the case of M/s. Mahaan Dairies Ltd. only. According to him, even though copy of the said prohibitory order ....
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....ings pending by passing an order under section 132(3). He contended that the prohibitory order can be issued by invoking the provisions of section 132(3) only when it is not practicable to seize any record or valuables and the onus is on the Department to justify the issuance of order under section 132(3) by explaining the reasons to keep the search and seizure operation incomplete. He also contended that the powers under section 132(3) cannot be exercised merely to circumvent the time limit and if the said powers are sought to be used with such a collateral intention, the same cannot be permitted. In support of this contention, he relied on the decision of the hon'ble Bombay High Court in the case of CIT v. Mrs. Sandhya P. Naik [2002] 253 ITR 534. 7. The learned Departmental representative on the other hand, submitted that both the concerns i.e., the assessee-company and M/s. Mahaan Dairies Ltd. belonged to the same group and as is evident from the copy of panchnama placed at page Nos. 94 to 97 of the assessee's paper book, the same were operating from the same premises where the search operation was conducted. He submitted that the search and seizure operation commenced ....
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....ed to the Department as alleged by learned counsel for the assessee. 8. As regards the prohibitory order passed under section 132(3), the learned Departmental representative submitted that two such orders were simultaneously passed out of which one was clearly marked to the assessee-company. He submitted that since the name of the assessee-company was clearly mentioned in the said orders, it cannot be said that the said order was not issued in its name. He also submitted that a warrant of authorisation in this case was apparently issued in the joint name of the assessee-company and M/s. Mahaan Dairies Ltd. as is evident from the panchnama drawn on September 15, 2000, and since there was a clear mention in the said panchnama about temporary conclusion of the search operation and issuance of order under section 132(3), it cannot be said that the said prohibitory order was issued only in the case of M/s. Mahaan Dairies Ltd. and not in the case of the assessee-company. As regards the judicial pronouncements cited by learned counsel for the assessee in support of the assessee's case on this issue, he submitted that the facts involved in the said cases were entirely different from t....
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....revious permission. Details of articles: Steel safe lying in the records room in the accounts section of make 'Venus' and the old records lying in the above record room of account section of M/s. Mahaan Dairies Ltd., Vill. Kunja, Ponta Sahib, HP for which four (4) seals have been placed on the safe and one (1) seals have been placed on the door of the record room. (Total No. of seals placed: 4 + 1 = 5 (Five) seals). Dated: 15/9/2000 Copy to: Sh. Pardeep Sharma, Accounts manager, Mahaan Foods Ltd., Vill. Kunja, Ponta Sahib, H.P. (Sd.)................. Sanjay Agarwal, Signature of the Authorised Officer, Deputy CIT, Circle, Dehradun, UP". 10. Learned counsel for the assessee has raised before us mainly two objections challenging the aforesaid order passed under section 132(3). First of all, he has contended that the said order was not issued in the name of the assessee but the same was issued only in the name of M/s. Mahaan Dairies Ltd. and merely a copy thereof was marked to the assessee. He has contended that the said order thus was not issued in the case of the assessee and in the absence of any such order issued under section 132(3) in the ....
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....he view that there was a sufficient ground making it impracticable to the search team to complete the seizure and conclude the search on September 15, 2000, and the situation warranting issue of a prohibitory order as contemplated under section 132(3) was clearly obtained. 13. We also find it very difficult to agree with the contention of learned counsel for the assessee that the order dated September 15, 2000, passed under section 132(3) was not in the case of the assessee since the same contained the name of M/s. Mahaan Dairies Ltd. and merely a copy thereof was issued to the assessee. A perusal of the provisions of section 132(3) clearly shows that subject to the conditions mentioned therein, a prohibitory order under the said provisions is required to be served on the owner or the person who is in immediate possession or control of the relevant material/document. As is evident from the order dated September 15, 2000, passed under section 132(3) in the present case, the contents of which are extracted above, the relevant steel safe in respect of which the restraint order was passed had been lying along with the other old records in the record room of accounts section of M/s. Ma....
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....ally concluded on the date on which the said panchnama was drawn, i.e., October 4, 2000, as per Explanation 2(a) to section 158BE. The block assessment completed by the Assessing Officer on October 31, 2002, i.e., within a period of two years from the month in which the warrant of authorisation had been executed thus was well within the time limit and the same was not barred by limitation. The case laws relied upon by learned counsel for the assessee in this regard are clearly distinguishable on facts as rightly pointed out by the learned Departmental representative and the same, therefore, are of no help to support the assessee's case on this issue. For instance, in the case of B.K. Nowlakha v. Union of India [1991] 192 ITR 436, the restraint order passed under section 132(3) was cancelled and renewed from time to time beyond 60 days without any justification and that too without obtaining the approval of the Commissioner under section 132(8A). There was thus no prohibitory order validly in existence when the seizure was finally made and panchnama was drawn. Moreover, no case was made out by the Department therein to show how it was not practicable to effect seizure of stocks ....