TaxTMI 
TaxTMI 
2012 (12) TMI 164
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....the warrant was mechanically extended without any justification? 3. Whether the Tribunal was right in holding that the sum of Rs.40 lakhs constituted undisclosed income as per the provisions of Chapter XIV B of the Income Tax Act, 1961 which is a code by itself? 4. Whether the Tribunal exercised the discretion in a judicial manner while refusing to entertain additional evidence as though it is an afterthought failing to appreciate that Income tax litigation is not adversarial in nature? 5. Whether the Tribunal was right in holding that the bad debt claim cannot be allowed while computing the undisclosed income in a block assessment when there cannot be any books of account that can be maintained?" 2. The assessment herein relates to one under Chapter XIV-B of the Income Tax Act, 1961 (hereinafter called as the "Act"). The facts are not in dispute. The Revenue herein conducted search initiation operation on 12.12.2001. A Prohibitory order was issued on 13.12.2001. Based on the search authorisation dated 03.12.2001, the search at the assessee's premises commenced on 12.12.2001 at 10.30 a.m., noting that the "search continues", the proceedings was closed on 13.12.20....
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....05 and 1128 of 2010 dated 21.06.2012 (Commissioner of Income Tax IV, Chennai and P.Balaji Vs. P.Shanthi and the Deputy Commissioner of Income Tax, Chennai) as well as T.C.Nos.1470 to 1473, 1483 and 1484 of 2005 dated 21.06.2012 (Commissioner of Income Tax-IX, Chennai Vs. Usha Agarwal and others ), wherein, this Court had agreed with the view of the Karnataka High Court in the case of C.Ramaiah Reddy Vs. Assistant Commissioner of Income-Tax (IMV) reported in (2011) 339 ITR 210 as well as the Delhi High Court decision in the case of Commissioner of Income-Tax Vs. Anil Minda reported in (2010) 328 ITR 320 that going by Explanation 1 to sub-clause (1) of Section 158BE of the Act, the limitation has to be looked at from the last of the Panchanama drawn indicating the conclusion of the search conducted as per their authorisation. 8. Learned counsel appearing for the assessee submitted that even though the said decisions are cases of multiple warrants of authorisation, yet, the decision of the Karnataka High Court would answer the issue raised herein. He further pointed out that considering the fact that the appeal order of the Tribunal rested on the decision of the Special Benc....
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.... the person, in whose case authorisation was issued. But, could the Explanation be extended to a case of single authorisation issued but with panchanamas of more than one drawn ? 12. We do not subscribe to the view of the Revenue based on the Explanation that several of the authorisations drawn and executed on different dates and the several panchanamas drawn would have bearing to a case of single authorisation for search, but showing several panchanamas. In this connection, reasoning of the Karnataka High Court in the case of C.Ramaiah Reddy (cited supra) in paragraph 77 would be of relevance. " The panchnama referred to in Explanation 2 to the said section specifically refers to search under Section 132 and Section 132 specifically refers to authorisation to enter and search and it has no reference to entering and searching the premises which are the subject-matter of prohibitory order or restraint order. No authorisation is required to enter the premises and inspect the materials which are the subject-matter of prohibitory order or restraint order. The said order itself acts as an authorisation to enter the premises and inspect the materials which are the subject-ma....
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....ne panchnama as reasoned out by the Karnataka High Court. 14. Referring to the Kerala High Court decision in the case of Dr.C.Balakrishnan Nair Vs. CIT reported in (1999) 237 ITR 70 (Ker), the Karnataka High Court held that there is no provision in the Criminal Procedure Code or in the Income Tax Act therein, for postponing the search for such a long period. It is worthwhile to extract the decision of the Karnataka High Court, which in clear terms brings out the concept of search and validity of the authorisation issued for the search. " Similarly, in circumstances not covered under those provisions, it is open for him to pass a prohibitory order under sub-section (3) not amounting to seizure which order will be in force for a period of 60 days after securing the possession of the materials, articles etc., in the aforesaid manner. Action under Section 132(3) of the Income Tax Act can be resorted to only if there is any practical difficulty in seizing the item which is liable to be seized. When there is no such practical difficulty the officer is left with no other alternative but to seize the item, if he is of the view that it represented undisclosed income. Powe....