TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 622
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.... Section 158BE (b) of the Act? II) Whether on a true and proper interpretation of Section 132(3) of the Act the prohibitory order made under Section 132(3) in respect of jewelleries which have been found in the course of search and which has been valued by the departmental valuer on the very day in the course of search when the authorized officer has not recorded any reasons as to why same cannot be seized under the second proviso to Section 132(1) of the Act, in the absence of any finding or reason the order under Section 132(3) of the Act is illegal, invalid and without jurisdiction? III) Whether when the order under Section 132(3) is operative and the appellant is prohibited from removal or otherwise dealing with jewelleries covered under Section 132(3) of the Act the authorized officer has any competence or jurisdiction or authority to conduct any search in respect of said very articles in respect of which the prohibitory order is still operative? IV) Whether in view of the authorization dated 2nd December, 1999 and in the absence of any further authorization the order passed under Section 158BC (c) on 31st January, 2002 is barred by limitation and is therefore illegal, inva....
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.... an appeal preferred by the assessee, the CIT held that the assessment was barred by time. In an appeal preferred by the Revenue, the learned Tribunal reversed the order of the CIT and held that the assessment order was passed within the time limit prescribed under Section 158BE of the Income Tax Act, and the matter was restored to the file of the CIT (A) with the direction to decide the matter on merits. Challenging the aforesaid order the present appeal was preferred by the assessee. Mr. Bajoria, learned Senior advocate has confined his arguments to the sole question as to whether the assessment order dated 31st January, 2002 is barred by limitation? He contended that on 31st January, 2000 nothing really took place. The reference to 25th January, 2000 in the assessment order is an inadvertent mistake. The Assessing Officer intended to refer to the visit dated 31st January 2000. The search, according to him, was completed on 8th December, 1999. The restraint order imposed on 8th December, 1999 was vacated on 31st January, 2000. The search party drew the panchnama dated 31st January, 2000 stating that the search commenced at 15:20 hours and was closed at 15:30 hours. According to....
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....tion 2 which are relevant for our purposes may be extracted: "158BE. (1) The order under Section 158BC shall be passed, within two years from the end of the month in which the last of authorisations for search under section 132 or for requisition under Section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. Explanation 2. ---- For the removal of doubts, it is hereby declared that the authorisation referred to in sub-section (1) shall be deemed to have been executed,- (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer. " From a plain reading of Explanation 2(a), it is evident that an authorisation referred to in sub-section (1) is deemed to have been executed on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose ca....
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....ion that the respondents did not complete the search on June 22, 1998, as alleged by the petitioners, nor did they unduly prolong it. The search concluded on August 5, 1998, and so in terms of Explanation 2 to section 158BE of the Act the period of limitation would begin from the end of August, 1998, that is, August 31, 1998 onwards. The second issue raised by learned counsel for the petitioners would stand answered accordingly. " In the case of CIT -Vs- S. K. Katyal (supra) the Division Bench distinguished judgement in the case M. B. Lal on the ground that in that case there was no unexplained break in the search, whereas the judgement in the case VLS Finance Ltd. was distinguished on the ground that there were as many as 16 panchnamas. There was a mass of documents and the Court found that the search was concluded on 5th August, 1998. It was held that where search was, in fact, conducted on the day when the last panchnama was drawn is distinguishable from a panchnama which was prepared solely for the purpose of removing the seals and making over the keys. Another reason, advanced by the Division Bench for the purpose of distinguishing both the judgements in the case of M. B. Lal....
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....elled by the Court which issued it, or until it is executed." Section 70 relates to a warrant of arrest but Section 70 is also applicable to a search warrant as would appear from Section 99 of the Code of Criminal Procedure which provides as follows:- "99. Direction, etc., of search-warrants.- The provisions of Sections 38, 70, 72, 74, 77, 78 and 79 shall, so far as may be, apply to all search-warrants issued under section 93, section 94, section 95 or section 97." Sub-section 13 of Section 132 makes all the provisions relating to search and seizure contained in the Code of Criminal Procedure to the searches and seizures under Sub-section (1) or Sub-Section (1A) of Section 132 of the Income Tax Act. To be precise Sub-section 13 of Section 132 of the Income Tax Act provides as follows:- "(13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under sub-section (1) or sub-section (1A)" A restraint order under Section 132(3) is in aid of search and is valid for sixty days u/s. 132(8A) unless revoked earlier. During continuance of the restraint order the search itself cannot be....
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....f competent jurisdiction shall be reversed or altered by a Court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution, unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby. (2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings." There can be no denial that by virtue of Section 132(13) quoted above the provisions contained in Section 465 of the Code of Criminal Procedure shall also become applicable. Reference may also be made to Section 461 of the Code which provides, inter alia, that if a search warrant is issued by a Magistrate in good faith though not empowered by law to do so, the proceedings shall ....
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....anya Ayyar's case, ILR 25 Mad 61: 28 Ind App 257 (PC) or Abdul Rehman's case, ILR 5 Rang 53, 54 Ind App 96: (AIR 1927 PC 44). The Board did not think it was necessary to discuss the precise scope of what was decided in Subrahmanya Ayyar's case, ILR 25 Mad 61: 28 Ind App 257 because in their understanding of S.239 (d) of the Code that question did not arise in that case. The point was again mooted by the Board in Pulukuri Kotayya v. Emperor, ILR (1948) Mad 1: (AIR 1947 PC 67). In that case there had been a breach of the proviso to S.162 of the Code. It was held that in the circumstances of the case the said breach did not prejudice the accused and therefore the trial was saved by S.537 thereof. Sir John Beaumont speaking for the Board observed at page 12 (of ILR Mad): (at pp.69-70 of AIR): "When a trial is conducted in a manner different from that prescribed by the Code, as in ILR 25 Mad 61: 28 Ind App 957 (PC), the trial is bad, and no question of curing an irregularity arises, but if the trial is conducted substantially in the manner prescribed by the Code, but some irregularity occurs in the course of such conduct, the irregularity can be cured under S. 537, and none-the-less so....
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....e the accused before a Magistrate for trial and if so taking the necessary steps for the same by the filing of a charge-sheet under Section 173." A restraint order under Section 132 (3) is undoubtedly in aid of the investigation and has been conceived as a substitute, not amounting to seizure, where it is not practicable to exercise the power of seizure as would appear from Sub-section 3 of Section 132 which reads as follows:- "The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, [for reasons other than those mentioned in the second proviso to subsection (1),] serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. [Explanation.- For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this subsection shall not be deemed to be seizure of such books of account, other documents, m....