TaxTMI 
TaxTMI 
2007 (5) TMI 209
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....997-98 (up to November 6, 1996). 2. The assessee carries on fishing activities on the high seas and it appears that on the basis of some information available with the Revenue, a search operation in respect of the assessee was conducted under section 132 of the Income-tax Act, 1961 ("the Act") on November 6, 1996. During the search operation, some documents were seized and some fishing vessels/trawlers belonging to the assessee were searched and a restraint order under section 132(3) of the Act was passed in respect of those vessels and served upon the concerned persons. 3. The restraint order under section 132(3) of the Act was extended on March 30, 1997, up to September 30, 1997, when no further orders were passed. 4. On December....
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....der was passed in respect of the fishing vessels/trawlers under section 132(3) of the Act or whether the search and seizure operations concluded when a panchnama was drawn up on September 14, 1998. According to the assessee, all proceedings concluded on November 6, 1996, and the proceedings on September 14, 1998, were an eyewash intended only to extend the period of limitation. The Revenue, of course, justifies the drawing up of the panchnama on September 14, 1998, and canvassed that the period of limitation be calculated from that date. 9. We find that on November 6, 1996, some documents of the assessee were seized and a panchnama drawn up on the same day after an inventory was made. On the same day, three trawlers belonging to the asse....
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....r such a long period. Keeping the affected parties in a state of suspended animation about the probable continuation of search would be agonising. It was held that there must be some convincing reason for not resuming the search immediately and absent such convincing reasons, it was held that the second search was not legal or valid. 12. Similarly, in CIT v. Mrs. Sandhya P. Naik [2002] 253 ITR 534, it was held by the Bombay High Court that simply stating in the panchnama that the search is temporarily suspended does not entitle the authorised officer to keep the search proceedings alive by passing a restraint order under section 132(3) of the Act. In arriving at this conclusion, the Bombay High Court placed reliance upon Sriram Jaiswal v....
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.... formality since there was no prohibitory order in existence. The unarticulated suggestion in this letter is that the Revenue carried out the search on September 14, 1998, merely to extend the period of limitation and not because it was necessary to conduct a search for making any recovery or seizure. We agree with the conclusion of the Tribunal that this letter clearly suggests that the search and seizure operation had come to an end on November 6, 1996, and that on September 14, 1998, there was no restraint order in respect of the fishing trawlers of the assessee and, therefore, the search and panchnama drawn on September 14, 1998, were not in accordance with law. 16. This being the position, it cannot be said that the last panchnama d....
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....ion 132(3) of the Act shall not be deemed to be a seizure of such valuable article or thing. 19. It is obvious that the fishing trawlers could not be seized by reason of their volume or weight. Appropriately, therefore, an order could be passed by the authorised officer only of deemed seizure under section 132(1) of the Act. Passing an order under section 132(3) of the Act was not at all warranted given the nature of the articles, that is, fishing trawlers. 20. In B. K. Nowlakha v. Union of India [1991] 192 ITR 436, this court held that if a seizure is effected then an order is required to be made under section 132(5) of the Act but if there is no seizure and only an order of restraint is passed under section 132(3) of the Act, then o....