TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 1134
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....d to purchase milk under the name of M/s. Ghanshyam Dairy Products, from Miraj where the assessee had full-fledged processing unit, a chilling plant, cold storage and business premises. 2.1 A search and seizure action was carried out in the business premises of the assessee at 48, Nath, Madhav Park, C.P.Tank, Mumbai and Miraj on 15/12/1997. During the course of search some cash and incriminating documents were seized from the residence and business premises of the assessee. As alleged, the assessee used to sell milk and milk products outside the regular books of account and for that purpose the assessee had maintained separate records. The assessee used to deposit the undisclosed earning in the bank accounts of the assessee and his family members. 2.2. Accordingly, on 15/10/98 notice u/s 158BC was issued and the assessee was directed to file return of income for block period within 16 days from the receipt of the notice. In response thereof the assessee filed return of income for the block period on 02/12/98 declaring the total income of Rs. 55,00,000/- in respect of M/s. Paliwal Dairy Farm, prop. Shri. Jamnalal N. Purohit and NIL income in the respect of M/s. Ghanshyam Dairy Pro....
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....31/01/2000. 3.1. Before us the Ld. Counsel for the assessee submitted that the block assessment order passed by the Assessing Officer u/s 158BC of the Act is invalid and bad in law being barred by the limitation under section 158BE of the Act. In support of his contention, the appellant invited our attention to the relevant provisions of the law and the material placed before the tribunal. We noticed that in the present case, search u/s 132 was carried out and concluded on 15/12/1997, on the basis of warrant of authorisation for the search dated 14/12/1997. Prohibitory order under section 132(3) in respect of bank accounts etc. was made on 15/12/1997. Order vacating/lifting the prohibitory order was made/prepared on 06/01/1998. The Ld. AR submitted that section 158BE prescribes a time limit of two years from the end of the month in which last of the authorization for search was executed and in the present case last authorization was executed on 15/12/97, therefore, the assessment order ought to have passed by 31/12/1999. But in this case block assessment order has been passed after expiry of limitation period i.e., on 31/01/2000. In support of his contention, the Ld. Counsel relie....
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....Mumbai) following the law laid down by the Hon'ble jurisdictional High Court of Bombay in CIT vs. Mrs. Sandhya P. Naik & Others (2002) 253 ITR 534(Bom), has decided the similar issue in favour of the assessee. In the said case the Hon'ble court has held that by passing a restraint order under section 132(3) the time limit available for framing block assessment order cannot be extended. Similarly, by simply stating in panchnama that the search is temporary the suspended the authorised officer cannot keep the search proceeding in operation by passing a restraint order under section 132(3). The coordinate bench in Adolf Patrick Pinto's case (supra) has held as under;- " The passing of prohibitory order under section 132(3) is an administrative act and it is the domain of the authorised officer to decide during the course of search if any prohibitory order is required to be passed or not. However, in order to determine whether the search has come to and or not, what is required to be seen whether the documents are valuable beings kept under have been appraised or not. Explanation 2 to section 158 BE does not mean that the time limitation will not start till the prohibitory order pas....
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.... drawing of the panchnama noting conclusion of the search, the limitation period begins." Block Assessment period: 1988-89 to 1998-99 8. The co-ordinate Benches of ITAT, Mumbai as well as the other Benches of ITAT have held that for the purpose of limitation for block year assessment, the date of limitation commences from the date of panchnama which reveal that a search was carried out on the day to which it relates. If it is found that the panchnama does not reveal that a search was at all carried out on the date to which it relates then it would not be a panchnama relating to a search and consequently, it would not be a panchnama, which finds mention in explanation-2 to section 158BE of the Act. It is this proposition which has been upheld by Hon'ble Jurisdictional High Court in CIT vs. White & White Minerals Pvt. Ltd.(supra). The so-called panchnama prepared in the present case on 06/01/1998 only mentions that search was commenced at 1.30 PM and concluded at 2.00PM and was finally concluded. In view of the settled position of law panchnama dated 06/01/1998 cannot be treated as the last panchnama drawn within the meaning of explanation 2 to section 158BE of the Act. 9. In the....