TaxTMI 
TaxTMI 
2019 (3) TMI 76
X X X X Extracts X X X X
X X X X Extracts X X X X
....was not raised before the search party or before the Assessing Officer? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in not cancelling the assessment in the light of the order of the co-ordinate Bench of the Tribunal which order was affirmed by this Hon'ble Court? 3. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal ought to have found that by virtue of the newly introduced section 153A by Finance Act, 2003 and in view of the impact thereto as held in 241 CTR 108 in the case of M.D. Overseas Limited v. Director General of Income Tax, the order passed is illegal and without authority of law in view of the absence of the panchas ? 4. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessment is not barred by limitation without dealing with the undisputed postal records produced; more so when the onus was on the department to prove the service as held in 166 CTR 461 in the case of Venkat Naicken Trust and another v. Income Tax Officer ? 5. Whether on the facts and in the circumstances of the case, the Tribunal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the order having been dispatched on the last day. With respect to the additions, the First Appellate Authority reduced it to five times of the turnover returned for each year. The assessee and Department were in appeal. The Tribunal interfered with the First Appellate Authority's order insofar as modifying the addition to six times the returned turnover. The Tribunal found that the appellate authorities could examine the validity of a search, but on facts refused to accept the contention of the assessee. The Department appeals were hence allowed partly and assessee's appeals were rejected. The assessee is before us challenging the order of the Tribunal on the questions of law herein above extracted. 4. Sri. Ramesh Cherian John at the outset points out that the Appellate Authorities being not competent to look into the validity of the search proceedings as stated in Pooran Mal v. Director of Inspection [(1974) 93 ITR 505] stands substantially altered after the amendment to Finance Act, 1995 by introduction of a block assessment and later introduction of Section 153 A by Finance Act, 2003. It is contended that the validity of the search is the most important issue insofar a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mahazar or at least before the Assessing Authority, it cannot be taken up later in first appeal. Sri. Jose Joseph does not seriously oppose the contention that the appellate proceedings are a continuation of the assessment proceedings. However, such continuation could be inferred only for the grounds taken up before the Assessing Authority, especially in the context of the absence of panchas who are independent third parties. The decisions relied on by the assessee would not be applicable in the present case; is the argument. The assessee having not taken up the contention at the first stage and having taken up such a contention at the appellate stage for the first time indicates that the assessee had, by then, won over the panchas. If such contentions are allowed to be taken at a later stage in appeals provided under the statute, it would lead to chaos and no proceedings could be sustained since individuals retract at their sweet will. The additions according to the learned Standing Counsel has been substantially reduced by the appellate authority and slightly modified by the Tribunal. 6. The learned Counsel for the assessee also relies on the judgment of this Court produced alon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vernment may be retained and what should be returned to the assessee may be immediately returned to him. Even with regard to the books of account and documents seized, their return is guaranteed after a reasonable time. In the meantime the person from whose custody they are seized is permitted to make copies and take extracts. Sixthly, where money, bullion, etc. is seized, it can also be immediately returned to the person concerned after he makes appropriate provision for the payment of the estimated tax dues under sub-section (5) and lastly, and this is most important, the provisions of the Criminal Procedure Code relating to search and seizure apply, as far as they may be, to all searches and seizures under Section 132. Rule 112 provides for the actual search and seizure being made after observing normal decencies of behaviour. The person in charge of the premises searched is immediately given a copy of the list of articles seized. One copy is forwarded to the authorising officer. Provision for the safe custody of the articles after seizure is also made in Rule 112. In our opinion, the safeguards are adequate to render the provisions of search and seizure as less onerous and rest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered. The authorisation issued for conducting a search under Section 132 is one sourced to the Department and the chances of it being manipulated, in favour of the assessee, are remote. Likewise the department official's cross examination could be taken up at any stage as there can be no assumption that the officer would be won over to depose in favour of the assessee. The decisions cited does not at all contemplate, the fact situation as arising in this case; of the absence of panchas during the search proceedings, preparation of mahazar and its acknowledgment, which contention was not taken up at the first instance. 10. The search itself was conducted on 09.04.2008. The assessee is not a new dealer and had been carrying on the business for long. The argument of the learned Counsel for the assessee before us, is that the search proceedings, preparation of mahazar as also recording of statements under oath, were carried out in the presence of Police and without any panchas. After such proceedings were carried out two persons were called from the outside and forced to sign the mahazar. If that was the case, we agree with the Counsel that probably, the assessee could not have ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....und to be distinguishable. The decision of the Tribunal was in the case of ACIT v. George Philip Modayil (ITA No.389(Coch)/98 & others)which the Tribunal noticed was a case in which at the first stage itself the plea of absence of panchas was raised. The questions numbered as 1 to 3 are answered in favour of the revenue and against the assessee. 13. The next question is on limitation. Admittedly, the order was dispatched on 31.12.2010 which was the last date of limitation under Section 153B. The only contention taken up is that the order was dispatched after the office hours. The requirement as noticed by the Tribunal from the judgment of this Court in Cochin Plantations Ltd. v. State of Kerala. (1997) 227 ITR 38 is to ensure that by the last day of limitation, the order is beyond the control of the authority concerned; ensuring that no changes or modifications are made after the expiry of limitation period. Hence if a conscientious officer passed the order on the last day of limitation and dispatched it after office hours, it cannot be said to be a factor vitiating the order or enabling the limitation period to be applied to find a bar for issuing the said order. The question of ....