AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 397
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....tances of the case and in law, the Tribunal was legally correct in dismissing the revenue's appeal by completely ignoring Explanation 2 to Section 158BE of the Act inserted by the Finance (No 2) Act, 1998 with effect from 01.07.1995? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was in error in ignoring the fact that 2nd Explanation to Section 158BE, was clarificatory in nature and therefore upholding the annulment of the assessment order was going against the true reading of the provisions of the Act? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in ratifying the order of the CIT (A), where the latter had adjudicated on an administrative order namely the restraint order passed u/s 132(3) that is beyond the scope of Section 246A of the Act?" 4. From the above it is evident that the core issue in the appeal requiring adjudication is annulment of the assessment order for the block period under consideration passed under Section 158BC of the Act by holding the same to be beyond the limitation period prescribed under Section 158BE(b) of the Act. 5. It may be mentio....
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....ooks of account etc upon summons or notice or is in possession of any money etc. which has not been or would not be disclosed for the purpose of the Act. As per sub-section (3) the officer who is so authorized to carry out search and seizure where it is not practicable to seize any such books of accounts, other documents, money, bullion, jewellery or other valuable articles or thing, shall serve an order on the owner or on the person in immediate possession or control not to remove or part with or otherwise deal with it except with the the previous permission of such officer. As per the Explanation thereto, it is declared that serving of an order under sub-section (3) shall not be deemed to be seizure of such books of accounts, other documents, bullion, jewellery or other valuable articles or things in terms of sub-section (1) clause (iii). 12. The consequence of such search is to have assessment of undisclosed income as a result of such search which is provided in Section 158BA as per which the Assessing Officer shall proceed to assess the undisclosed income of such person for the related block period. 13. Block period is defined in Section 158BA to mean the period comprisin....
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....1998. 19. The first appellate authority also noted that though there were warrants of authorization on 15th September, 1998, 13th October, 1998 and 14th December, 1998, after 15th September, 1998 the authorized officer had nothing to search or seize and could not have lawfully conducted any search. Life term of search warrant issued on 14th September, 1998 came to an end on 15th September, 1998, when it was duly executed. It was noticed that back up copy of the CPU of the computer was taken by the authorized officer on 13th October, 1998 by passing prohibitory order. However, there was no purpose to keep or continue the same under prohibitory order. Therefore, what was done on 14th December, 1998 was final revocation of the order under Section 132(3) relating to the CPU of the computer and it was held that such final revocation of the order under Section 132(3) was wholly irrelevant for the purpose of determining limitation under Section 158BE. The first appellate authority accepted the contention of the respondent/assessee that search operation was completed on 15th September, 1998 and nothing connected with the search was done on subsequent dates. It was held as under:-....
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....ity by holding as under :- "4. We have heard the rival submissions and perused the material before us. It is found that while deciding the issue, special bench had specifically dealt with the question of retrospective amendment and decided that if nothing connected with the search was done on a particular day time limit for assessment will not extend to that date. In other words time limit available to the AO is upto the date of actual conduct of search. In the case under consideration FAA has given a finding of fact that search operations were over in the month of September, 1998 and after that only panchanamas were drawn. In these circumstances, we are of the opinion that there is no need to interfere with the orders of the FAA. So respectfully following the order of the Special bench delivered in the case of Shree Ram Lime Products Ltd.(supra), we uphold the order of the FAA. Grounds of appeal 1-3 are decided against the AO. As we have upheld the order of the FAA, who have annulled the block assessment order, so we are of the opinion that other rounds do not need any adjudication by us." 23. Explanation 2 was inserted in Section 158BE of the Act by the Finance (No.2)....
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....panchanama" as occurring in Explanation 2(a) to Section 158BE of the Act. Delhi High Court held that the word "panchanama" is not defined in the Act. However, panchanama which is mentioned in Explanation 2(a) to Section 158BE is nothing but a document recording what happened in the presence of the witnesses (panchas). It documents the conclusion of a search. 27. In Sandhya P. Naik (supra) this court held that by simply stating in the panchanama that a search is temporarily stopped, the authorized officer cannot keep the search in operation by passing a restraint order under Section 132(3). Action under Section 132(3) can be resorted to only if there is any practical difficulty in seizing the things which are likely to be seized. When there is no such practicable difficulty, the officer is left with no other alternative but to seize any item if he is of the view that it represented undisclosed income. This court categorically held that power under Section 132(3) cannot be exercised so as to circumvent the provisions of Section 132(3). Referring to the Explanation to Section 132(3), this court held that a restraint order does not amount to seizure. By passing a restraint order, th....