M/s Surya Vinyak Industries Ltd., New Delhi V. JCIT (OSD), New Delhi

CO 269/DEL/2011

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1445 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: SUMANGLA SAXENA ADVS; RAJIVE SAXENA
• Keywords: Search and seizure; Period of limitation; Retrospective amendment; Question of law; Difference of opinion; Accommodation entries; Block assessment; Right to appeal; Time period of passing order; Change of opinion
• Section: 143(3); 153A; 132; 92

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. A. T. VARKEY , JM ITA NO S . 3158 TO 3162/DEL/2011 ASSTT. YEAR S : 2001 - 0 2, 2002 - 03, 2004 - 05, 2006 - 07 & 2007 - 08 JT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI VS M/S SURYA VINAYAK INDUSTRIES LTD., E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDUSTRIAL AREA, DELHI - 110034 (APPELLANT) (RESPONDENT) CO NO S. 265 TO 269/DEL/2011 ASSTT. YEAR S : 2001 - 02, 2002 - 03, 2004 - 05, 2006 - 07 & 2007 - 08 M/S SURYA VINAYAK INDUSTRIES LTD., E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDUSTRIAL AREA, DELHI - 110034 VS JT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AABCS6369N ITA NO S. 3167 TO 3170 /DEL/2011 : ASSTT. YE AR S : 2003 - 04 TO 2006 - 0 7 JT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI VS M/S SURYA VINAYAK INDUSTRIES LTD. , ( AMALGAMATED COMPANY OF AMALGAMATING COMPANY M/S RIM ZIM VALLEY PRODUCTS PVT. LTD. ) , E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDUSTRIAL AREA, DELHI - 110034 (APPELLANT) (RESPONDENT) CO NOS. 270 TO 273/DEL/2011 : ASSTT. YEARS: 2003 - 04 TO 2006 - 0 7 M/S SURYA VINAYAK INDUSTRIES LTD., (AMALGAMATED COMPANY OF AMALGAMATING COMPANY M/S RIM ZIM VALLEY PRODUCTS PVT. LTD.), E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDUSTRIAL AREA, DELHI - 110034 VS JT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AABCR8598N ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 2 ITA NOS. 3173 TO 3177/DEL/2011 : A. YS. : 2001 - 02, 2004 - 05 TO 2007 - 08 JT. COMMISSIONER OF INCOME TA X, CENTRAL CIRCLE - 25, NEW DELHI VS M/S J. H. BUSINESS INDIA PVT. LTD., E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDUSTRIAL AREA, DELHI - 110034 (APPELLANT) (RESPONDENT) CO NOS . 282 TO 286 /DEL/2011 : A. YS. : 2001 - 02, 2004 - 05 TO 2007 - 08 M/S J. H. BUSINESS INDI A PVT. LTD., E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDUSTRIAL AREA, DELHI - 110034 VS JT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAACJ9513G ITA NO. 5325/DEL/2013 : ASSTT. YEAR : 2005 - 06 DY. COMMISSIONE R OF INCOME TAX, CENTRAL CIRCLE - 1, NEW DELHI VS SHRI SANJAY JAIN, I - 42, ASHOK VIHAR, PHASE - I, NEW DELHI - 110052 (APPELLANT) (RESPONDENT) CO NO. 1/DEL/2015 : ASSTT. YEAR : 2005 - 06 SHRI SANJAY JAIN, I - 42, ASHOK VIHAR, PHASE - I, NEW DELHI - 110052 VS DY. CO MMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAGPJ1372G ITA NO. 4753 /DEL/2011 : ASSTT. YEAR : 2007 - 08 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI - 110052 VS SHRI SANJAY JAIN, I - 42, ASHOK VIHA R, PHASE - I, NEW DELHI - 110052 (APPELLANT) (RESPONDENT) ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 3 CO NO. 227/DEL/2012 : ASSTT. YEAR : 2007 - 08 SHRI SANJAY JAIN, I - 42, ASHOK VIHAR, PHASE - I, NEW DELHI - 110052 VS ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI (APPELLANT) (RESPON DENT) PAN NO. AAGPJ1372G ITA NO S. 1682 & 1683/DEL/201 2 ASSTT. YEAR S : 2002 - 03 & 2006 - 07 M/S SURYA VINAYAK INDUSTRIES LTD. , ( AMALGAMATED COMPANY OF AMALGAMATING COMPANY M/S RIM ZIM VALLEY PRODUCTS PVT. LTD. ) , E - 3, 1 ST FLOOR, PHASE - II, MANGOLPURI INDU STRIAL AREA, DELHI - 110034 VS DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AABCR8598N ITA NOS. 5024 & 5025/DEL/2011 ASSTT. YEAR S : 2002 - 0 3 & 2001 - 02 SHRI SANJAY JAIN, I - 42, ASHOK VIHAR, PHASE - I, N EW DELHI - 110052 VS DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 25, NEW DELHI - 110052 (APPELLANT) (RESPONDENT) PAN NO. AAGPJ1372G ASSESSEE BY : SH. RAJIVE SAXENA & SMT. SUMANGLA SAXENA, ADVS. REVENUE BY : SH . RAMESH CHANDRA, CIT DR DATE OF HEARING : 08 . 07 .2015 DATE O F PRONOU NCEMENT : 06 .10 .2015 ORDER PER BENCH: THESE APPEALS BY THE DEPARTMENT AND THE APPEALS & CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A) - I, NEW DELHI AS PER F OLLOWING DETAILS: ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 4 APPEAL S FILED BY DEPARTMENT CROSS OBJECTIONS FILED BY ASSESSEE DATE OF CIT(A) S ORDER 3158 TO 3162/DEL/2011 265 TO 269/DEL/2011 31.03.2011 3167 TO 3170/DEL/2011 270 TO 273/DEL/2011 31.03.2011 3173 TO 3177/DEL/2011 282 TO 286/DEL/2011 2 5.03.2011 5325/DEL/2013 1/DEL/2015 10.07.2013 4753/DEL/2011 227/DEL/2012 25.08.2011 APPEALS FILED BY THE ASSESSEE DATE OF CIT(A) S ORDER 1682 & 1683 /DEL/2012 05.01.2012 5024 & 5025/DEL/2011 14.09.2011 & 02.09.2011 2. SINCE THE ISSUES INVOLVED IN THE SE APPEALS AND THE CROSS OBJECTIONS ARE SIMILAR WHICH WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. THE ASSESSEE S ALSO MOVED DIFFERENT APPLICATION S EACH DATED 13.05.2014 FOR ADMISSI ON OF ADDITIONAL GROUND OF THE CROSS OBJECTION S IN RESPECT OF THE DIFFERENT ASSESSMENT YEARS . 3. FIRST WE WILL DEAL WITH THE CROSS OBJECTION RELATING TO M/S SURYA VINAYAK INDUSTRIES LTD. IN CO NO. 265/DEL/2011. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS C ROSS OBJECTION: 1. WHETHER THE ASSESSMENT FRAMED UNDER SECTION 153A/143(3) OF THE INCOME TAX ACT, 1961 IS LEGAL, WHEN CONSEQUENT UPON ACTION TAKEN BY THE DEPARTMENT UNDER SECTION 132 OF THE ACT ON 21.03.2007 AGAINST THE ASSESSEE WAS CARRIED OUT AND NOTHI NG INCRIMINATORY WAS FOUND, AND RE - ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 5 VISITING THE ISSUES, WHICH HAVE BEEN SETTLED EARLIER, IS PERMISSIBLE. 2. BECAUSE THE ORDER PASSED BY THE ASSESSING OFFICER WAS SO VULNERABLE ON BOTH THE FACTS AS WELL AS LAW THAT THE LD. CIT(A) HAD NO OPTION BUT TO CORRE CT THE SAME IN THE INTEREST OF JUSTICE AND EQUITY. 3. THE APPEAL BY DEPARTMENT IS BAD IN LAW BECAUSE THE ISSUES WHICH HAVE BEEN DECIDED BY THE APEX COURT AND WHICH HAVE BECOME THE LAW OF LAND HAVE BEEN TOTALLY IGNORED BY THE DEPARTMENT. 4. THE APPEAL FIL ED BY THE DEPARTMENT IS BAD IN LAW BECAUSE THE LD. AO WHO WAS GIVEN THE COMPLETE WORKING OF INCOME FROM TRADING OPERATIONS, SEGREGATING THE INCOME FROM MANUFACTURING OPERATIONS, THAT WAS TOTALLY IGNORED BY HIM AND ARBITRARILY COMPUTING O F TRADING INCOME BY NOT APPORTIONING THE ADMINISTRATIVE EXPENSES ATTRIBUTABLE TO SUCH TRADING INCOME IS WHETHER JUSTIFIABLE AND PERMISSIBLE BY LAW. 5. BECAUSE THE LD. LOWER AUTHORITIES HAVE IGNORED THE FACTS AND EVIDENCES SUPPLIED TO THEM AND MADE THE ADDITION OF RS. 1,41,0 68/ - BEING THE INTEREST INCOME THAT WAS DERIVED FROM DEPOSITS MADE FOR OBTAINING BANK GUARANTEES IN FAVOUR OF GOVERNMENT AUTHORITIES, IS WHETHER PERMISSIBLE NOT TO BE INCLUDED IN MAKING COMPUTATION OF EXEMPTION U/S 80IA OF THE ACT AS THE LOWER AUTHORITIES AS WELL AS HON BLE CIT(A) HAS ERRED IN APPRECIATING THE FACTS. 6. THE RESPONDENT CRAVES LEAVE FOR ADDITION, MODIFICATION, ALTERATION, AMENDMENT OF ANY OF THE CROSS OBJECTION. ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 6 4. THE ASSESSEE ALSO RAISED AN ADDITIONAL GROUND WHICH READS AS UNDER: THAT ASSESSMENT MADE U/S 153A IS BARRED BY LIMITATION AS THEY WERE REQUIRED TO BE COMPLETED BY 31.12.2008 AS PER SECTION 153B OF THE INCOME - TAX ACT WHILE THE SAME WAS MADE IN DECEMBER 2009. 5. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE REQ UESTED FOR ADMISSION OF THE ADDITIONAL GROUND BY STATING THAT IT IS A PURELY LEGAL GROUND AND NO FRESH INVESTIGATION IS REQUIRED, THEREFORE, THE SAME IS TO BE ADMITTED. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF NAT IONAL THERMAL POWER CO. LTD. VS CIT 229 ITR 383. THE LD. DR OPPOSED THE ADMISSION OF THE ADDITIONAL GROUND AND FURTHER SUBMITTED THAT THE ISSUE OF LIMITATION RAISED BY THE ASSESSEE IS NOT A PURE QUESTION OF LAW AND THIS GROUND WAS NEVER RAISED EARLIER BEFO RE THE AUTHORITIES BELOW, SO IT CANNOT BE SAID THAT THIS GROUND IS ARISING OUT OF THE ORDER OF THE FIRST APPELLATE AUTHORITY AND HENCE IT MAY BE REJECTED. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF INDIAN STEE L AND WIRE PRODUCTS LTD. VS CIT REPORTED AT 208 ITR 740. ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 7 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN OUR OPINION, THE ISSUE RAISED BY THE ASSESSEE VIDE ADDITIONAL GROUND IS PURELY A LEGAL ISSUE, IT GOES TO THE ROOT OF THE MATTER AND FOR ADJUDICATION OF THIS GROUND, NO FRESH MATERIAL OUTSIDE THE RECORD IS REQUIRED TO BE CONSIDERED. ON A SIMILAR ISSUE THE HON BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS C IT (SUPRA) HAS HELD AS UNDER: UNDOUBTEDLY, THE TRIBUNAL HAS THE DISCRETION TO ALLOW OR NOT TO ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER THE QUESTION OF LAW ARISING FROM FACTS WHICH ARE ON RECORD IN THE ASSESSMEN T PROCEEDINGS, THERE IS NO REASO N WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. 7. ON AN IDENTICAL ISSUE THE ITAT DELHI BENCH G , NEW DELHI IN THE CASE OF J. H. VINVEST PVT. LTD. IN CO NOS. 131 TO 137/DEL/2011 OBSERVED IN PARAS 4 TO 7 AS UNDER: 4. THE LD. AR SUBMITTED THAT THE ASSESSEE IS VERY MUCH ENTITLED TO RAISE AN ADDITIONAL GROUND ON A LEGAL ISSUE GOING TO THE ROOT OF THE MATTE R AND ADJUDICATION OF WHICH DOES NOT REQUIRE CONSIDERATION OF FRESH MATERIAL OUTSIDE THE RECORD. HE SUBMITTED THAT UNDER THE PROVISIONS OF SECTION 253(4) THE ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 8 MEMORANDUM OF CROSS - OBJECTION SHALL BE DISPOSED OF BY THE TRIBUNAL AS IF IT WERE AN APPEAL PRESEN TED WITHIN THE TIME SPECIFIED IN SUB - SECTION (3) OR SUB SECTION (3A) TO SECTION 253 OF THE ACT. THE ONLY DIFFERENCE BETWEEN THE CROSS OBJECTION AND THE APPEAL REMAINED THE PERIOD OF 30 DAYS FOR PREFERRING THE CROSS - OBJECTION AND WITHOUT MAKING ANY PAYMENT OF APPEAL FEE. FOR ALL OTHER PURPOSES CROSS - OBJECTION AND AN APPEAL SHALL BE TREATED AT PAR AND SO THERE IS NO DIFFERENCE IN SO FAR AS RAISING ADDITIONAL GROUND IS CONCERNED - TO BE TAKEN IN THE APPEAL OR IN THE CROSS - OBJECTION. IN THIS REGARD HE CITED FOLLO WING DECISIONS. - CIT VS. NEW INDIA ASSURANCE COMPANY LTD 141 ITR 367 (BOM.) CIT VS. PURVANCHAL BARIBAHAN GOSHTI 234 ITR 663 (CAL.) 4.1 THE LD. AR SUBMITTED FURTHER THAT WHEN QUESTION OF LAW ARISES EVEN THOUGH THE SAME WAS NOT RAISED BEFORE THE AUTHOR ITIES BELOW AND FOR THE FIRST TIME IT WAS RAISED BEFORE THE TRIBUNAL, THE TRIBUNAL IS EMPOWERED AND HAVE JURISDICTIONAL TO EXAMINE THE SAME. IN SUPPORT, HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: - NTPC LTD. VS. CIT 229 ITR 383 (SC) JUTE CORPORATION O F INDIA VS. 187 ITR 688(SC) 4.2 THE LD. AR SUBMITTED THAT IN THE PRESENT CASE AN ADDITIONAL GROUND HAS BEEN RAISED IN THE CROSS - OBJECTIONS ON THE PLEA OF LIMITATION AS THE ASSESSMENTS ARE BARRED BY LIMITATION. HE SUBMITTED THAT THE ISSUE PERTAINING TO LI MITATION IS A QUESTION WHICH CAN BE TAKEN AT ANY POINT OF TIME BEFORE THE BENCH DURING THE PENDENCY OF THE LITIGATION IN THIS REGARD. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: - ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 9 UNION OF INDIA VS. BRITISH INDIA CORPORATION LTD 268 ITR 481 (SC) CIT V S. MD. IQBAL 221 ITR 481 (MP) MAHINDRA & MAHINDRA LTD. VS. DCIT 313 ITR 263 ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 16 ITR (TRIB.) 380. 5. THE LD. DR OPPOSED THE APPLICATION. HE SUBMITTED THAT ADDITIONAL GROUND DOES NOT DISCLOSE AS TO ON WHICH SPECIFI C DATE THE ORDER WAS PASSED, WHICH GOES TO INDICATE THAT THE ASSESSEE HAS NOT APPROACHED THE TRIBUNAL WITH THE OPEN HEART AND CLEAN HANDS. HE CITED THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF INDIAN STEEL & WIRE PRODUCTS LTD. VS. CIT (1994) 2008 ITR 740 (CALCUTTA) HOLDING THAT THE TRIBUNAL IS TO DECIDE ONLY SUCH ISSUES WHICH WERE THE SUBJECT MATTER OF THE FIRST APPEAL, OTHERWISE THE TRIBUNAL WOULD BE REDUCED TO THE FIRST APPELLATE AUTHORITY. HE SUBMITTED THAT SINCE THE ADDITIONAL GROUND NOW R AISED WAS NEVER RAISED EARLIER BEFORE THE AUTHORITIES BELOW, IT CANNOT BE SAID TO BE ARISING OUT OF THE FIRST APPELLATE ORDER HENCE IT MAY BE REJECTED. HE SUBMITTED THAT SINCE THE ISSUE OF LIMITATION IS FIRSTLY NOT A PURE QUESTION OF LAW AND SECONDLY ON TH IS ISSUE ALL THE FACTS ARE NOT AVAILABLE ON THE RECORDS OF THE TRIBUNAL ORIGINALLY AND SUBSEQUENTLY, HENCE IT CANNOT BE ENTERTAINED NOW. EVEN BY VIRTUE OF HON'BLE SUPREME COURT JUDGMENT IN NTPC CASE, THE ADDITIONAL GROUND CANNOT BE ALLOWED TO BE RAKED UP N OW. THE LD. CIT DR SUBMITTED FURTHER THAT THE ADDITIONAL GROUND HAS BEEN NOW RAISED FOR THE SAKE OF RAISING BECAUSE AS THE FACTUAL MATRIX SHOWS THIS GROUND IS RAISED INCORRECTLY. 6. CONSIDERING THE ABOVE SUBMISSION, WE ARE OF THE VIEW THAT IT IS NOW A WE LL SETTLED PROPOSITION OF LAW THAT WHILE ADJUDICATING OBJECTIONS RAISED IN THE CROSS - OBJECTION, THE ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 10 SAME WILL BE DISPOSED OF AS AN APPEAL.. THUS, IT DOES NOT MAKE DIFFERENCE AS TO WHETHER AN ADDITIONAL GROUND IS RAISED IN THE APPEAL OR THE CROSS OBJECTION . THE ONLY REQUIREMENT FOR PERMITTING ADJUDICATION OF AN ADDITIONAL GROUND IS THAT THE ISSUE RAISED IS LEGAL IN NATURE IT GOES TO THE ROOT OF THE MATTER AND FOR ADJUDICATION OF WHICH NO FRESH MATERIAL OUTSIDE THE RECORD IS REQUIRED TO BE CONSIDERED. THE HO N'BLE SUPREME COURT IN THE CASE OF NTPC LTD. VS. CIT (SUPRA) HAS BEEN PLEASED TO DEAL WITH THE ISSUE IN DETAIL AND HAS COME TO THE FOLLOWING CONCLUSION: - 'WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD ON RESPECT OF THAT ITEM. WE DO NOT SEE ANY REASON TO RESTRICT THE POWER OF THE TRIBUNAL U/S 254 ONLY TO DECIDE THE GROUND WHICH ARISE FROM THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS - OBJECTIONS BEFORE THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDIN GS ALTHOUGH NO T RAISED EARLIER. ' 6.1 IN ITS EARLIER DECISION IN THE CASE OF JUTE CORPORATION OF INDIA LTD VS. CIT(SUPRA), THE HON'BLE SUPREME COURT HAS BEEN PLEASED TO HOLD AS UNDER: - THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEAL B EFORE THE COMMISSIONER OF INCOME - TAX (APPEALS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE TRIBUNAL (VIDE, E.G., CIT VS. ANAND PRASAD [1981] ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 11 128 ITR 388 (DELHI), CIT VS. KARAMCHAND PERMCHAND P. LTD. [1969] 74 ITR 254 (GUJ) AND CIT VS. CELLULOSE PRODUCTS OF INDIA LTD. [1985] 151 ITR 499 (GUJ) [FB]). UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH AR E NON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE'. 6.2. THE ISSUE PERTAINING TO L IMITATION IS A QUESTION OF LAW AFFECTING THE VERY JURISDICTION OF THE AO WHICH CAN BE TAKEN AT ANY POINT OF TIME BEFORE US DURING THE PENDENCY OF THE APPEAL. THIS VIEW IS WELL SUPPORTED BY THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. BRITISH INDIA CORPORATION LTD. (SUPRA) HOLDING THAT THE QUESTION OF LIMITATION AS A MANDATE TO THE FORUM AND IRRESPECTIVE OF THE FACT WHETHER IT WAS RAISED OR NOT, THE FORUM MUST CONSIDER AND APPLY IT, IF THERE IS NO DISPUTE ON FACTS. THE HON'BLE M.P HIGH COURT I N THE CASE OF CIT VS. MD. IQBAL (SUPRA) HAS BEEN PLEASED TO HOLD THAT THE QUESTION OF LIMITATION CAN BE RAISED AT ANY POINT OF TIME BECAUSE IT GOES TO THE ROOT OF THE MATTER. THEREFORE, IT IS WRONG TO CONTEND THAT THE TRIBUNAL SHOULD NOT HAVE PERMITTED THE ASSESSEE TO RAISE THE ADDITIONAL PLEA OF LIMITATION FOR THE FIRST TIME. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MAHINDRA & MAHINDRA LTD. VS. DCIT (SUPRA) HAS HELD AS UNDER: - 'BE THAT AS IT MAY WE FIND THAT THE QUESTION OF LIMITATION GOES TO THE VERY JURISDICTION OF THE MATTER. IF THE PROCEEDINGS ARE INITIATED OR COMPLETED BEYOND ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 12 THE PRESCRIBED TIME THEN SUCH PROCEEDINGS DESERVE TO BE QUASHED. IT IS THE SETTLED LEGAL POSITION THAT THERE CAN BE NO EMBARGO ON ANY PARTY TO RAISE A LEGAL GROUND FOR T HE FIRST TIME BEFORE THE TRIBUNAL PROVIDED THE RELEVANT MATERIAL FOR DECIDING THAT QUESTION ALREADY EXISTS ON RECORD AND NO FURTHER INVESTIGATION OF FACTS IS REQUIRED.' 7. CONSIDERING THESE MATERIAL ASPECT, WE ARE OF THE VIEW THAT THE ASSESSEE IS VERY MU CH ENTITLED TO RAISE THE ADDITIONAL GROUND IN QUESTION AND SINCE THE ISSUE OF ASSESSMENT BEING BARRED BY TIME LIMITATION, A LEGAL ISSUE GOES TO THE ROOT OF THE MATTER AND ADJUDICATION OF WHICH DOES NOT REQUIRE CONSIDERATION OF FRESH MATERIAL BEYOND RECORD, WE ALLOW THIS ADDITIONAL GROUND FOR THE ADJUDICATION OF THE BENCH. THE PARTIES WERE PERMITTED TO PROCEED ON MERITS OF THIS ADDITIONAL GROUND. 8 . WE, THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT AND THE DECISION OF THE CO - ORDINATE BENCH IN THE AFORESAID REFERRED TO ORDER, ADMIT THE ADDITIONAL GROUND VIDE WHICH THE ASSESSEE CONTENDED THAT THE ASSESSMENT MADE U/S 153A IS BARRED BY LIMITATION AS IT WAS REQUIRED TO BE COMPLETED BY 31.12.2008 AS PER SECTION 153B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WHILE THE SAME WAS FRAMED IN DECEMBER 2009. 9 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31.03.2003 DECLARING AN INCOME OF RS. ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 13 12,14,301/ - WHICH WAS PROCESSED U/S 14 3(1) OF THE ACT AT THE RETURNED INCOME. LATER ON, SEARCH & SEIZURE OPERATION WAS CONDUCTED U/S 132 OF THE ACT ON 21.03.2007 IN SUYRA VINAYAK GROUP OF CASES AND THE ASSESSEE IS ONE OF THE GROUP CO MPANIES WHICH IS HEADED BY SH. SANJAY JAIN AND HIS BROTHER SH . RAJIV JAI N, RESIDENT OF I - 42, ASHOK VIHAR, PHASE - I, NEW DELHI. THE MAIN ALLEGATION AGAINST THIS GROUP WAS THAT THEY HAVE TAKEN A LARGE NUMBER OF ACCOMMODATION ENTRIES IN VARIOUS GROUP COMPANIES BY PAYING CASH TO THE VARIOUS ENTRY OPERATORS. THE AO ISSUED THE NOTICE U/S 153A OF THE ACT ON 16.01.2008 TO THE ASSESSEE REQUIRING IT TO FILE THE RETURN OF INCOME IN THE PRESCRIBED FOR M. IN RESPONSE TO THE SAID NOTICE , THE ASSESSEE COMPANY VIDE LETTER DATED 13.03.2008 SUBMITTED THAT THE PREVIOUS RETURN DECLARING IN COME AT RS. 12,41,30 1/ - FILED ON 31.03.2003 MAY BE DEEMED AS THE RETURN OF INCOME SUBMITTED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. THE AO FRAMED THE ASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT ON 31.12.2009 AT AN INCOME OF RS. 2,57,89,450/ - BY MAK ING THE VARIOUS ADDITIONS. 10 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO ALLOWED A SUBSTANTIAL RELIEF TO THE ASSESSEE . NOW AGAINST THE RELIEF ALLOWED, T HE DEPARTMENT PREFERRED AN ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 14 APPEAL WHILE THE ASSESSEE HAD FILED THE CROSS OB JECTION AGAINST THE SUSTENANCE OF ADDITION AND ALSO CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER FRAMED U/S 153A/143(3) OF THE ACT BY STATING THAT THE SAME IS BARRED BY LIMITATION. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SEARCH WAS CON DUCTED AT THE OFFICE PREMISES ZONE H 4/5, PLOT N O. 53 - 55, SUVIDHA KUNJ, PITAMPURA , DELHI - 34 IN THE CASE OF SURYA VINAYAK GROUP OF CASES. IT WAS FURTHER SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH AND THE ASSESSMENT FRAMED U/S 1 53A WITHOUT ANY SEIZED MATERIAL AND DOCUMENTS FOUNDS DURING THE COURSE OF SEARCH WAS AGAINST THE PROVISION OF SECTION 153A OF THE ACT AND IT WAS MERELY CHANGE OF OPINION FROM THE EARLIER ORDER PASSED BY THE AO. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITT ED THAT THE SEARCH TOOK PLACE AT THE RESIDENCE OF SH. SANJAY JAIN AND SH. RAJIV JAIN, DIRECTORS OF THE ASSESSEE COMPANY AND AT THE BUSINESS PREMISES OF TH E ASSESSEE COMPANY ON 21.03.2007 AT 8:45 PM AND CONCLUDED AT 6 AM ON 22.03.2007 WHICH CLEARLY SHOWS TH AT WHOLE NIGHT SEARCH CONTINUED. IT WAS CONTENDED THAT SH. SANJAY JAIN WAS NOT IN HIS BEST OF HEALTH DUE TO WHICH THE PU NCHNAMA WAS SIGNED BY SH. ATUL SRIVASTAVA. IT WAS STATED THAT THE CERTAIN JEWELLARY VALUED ON ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 15 21.03.2007 BELONGING TO SMT. NEENA JAIN W/ O SH. SANJAY JAIN, PREETI JAIN W/O SH. RAJEEV JAIN AND SMT. SHAIL KUMARI JAIN WERE SEIZED AND ORDER U/S 132(3) OF THE ACT WAS PASSED . THEREFORE, THE ORDER WAS REQUIRED TO BE PASSED BY THE ASSESSING OFFICER ON OR BEFORE 31.12.2008 BUT THE ASSESSMENT ORDER H AS BEEN PASSED ON 24.12.2009 WHICH IS BARRED BY LIMITATION AND DESERVES TO BE QUASHED. IT WAS STATED THAT THE RESTRAINT ORDER PASSED ON 22.03.2007 WAS ONLY TO GAIN THE TIME BECAUSE WHEN THE SAID ORDER WAS REVOKED AND SEARCH ACTION TOOK PLACE ON 15.05.2007 , NO MATERIAL WAS SEIZED RATHER THE JEWELLARY ALREADY SEIZED ON 22.03.2007 WAS RELEASED. IT WAS SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 30.05.201 4 OF THIS BENCH OF THE TRIBUNAL IN ITA NOS. 1291 TO 1297/DEL/2011 AND CO NOS. 131 TO 137/DEL/2011 FOR THE ASSESSMENT YEARS 2001 - 02 TO 2007 - 08 IN THE CASE OF M/S J. H. FINVEST PVT. LTD. WHICH BELONGS TO THE SAME GROUP TO WHICH THE ASSESSEE BELONGS. COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD. IT WAS EMPHASIZED THAT ON 15.05.2007 PRACTICALLY NO FRESH SEARCH TOOK PLACE BECAUSE NOTHING WAS SEIZED EXCEPT ONE PART OF JEWELLARY OF SMT. NEENA JAIN WHICH WAS VALUED ON 21.03.2007 AND ALL OTHER JEWELLARIES WHICH WERE EARLIER SEIZED WERE RELEASED. THEREFORE, PRACTICALLY T HE SEARCH WAS ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 16 CONCLUDED ON 22.03.2007 WHEN THE PANCHNAMA WAS DRAWN. AS REGARDS TO THE OBJECTION OF THE LD. CIT DR THAT THE CROSS OBJECTIONS WERE NOT FILED WITHIN STIPULATED TIME. IT WAS SUBMITTED THAT AS PER THE PROVISION CONTAINED IN SUB - SECTION 4 OF SECT ION 253 OF THE ACT. IT IS SPECIFICALLY PROVIDED THAT THE CROSS OBJECTION CAN BE FILED WITHIN 30 DAYS AFTER RECEIVING THE MEMO OF APPEAL FILED BY THE OTHER PARTY. IT WAS STATED THAT THE CROSS OBJECTIONS WERE FILED WITHIN THE SPECIFIED PERIOD AND EVEN THE RE GISTRY HAS NOT RAISED ANY OBJECTION. THEREFORE, THE OBJECTION RAISED BY THE LD. CIT DR IS NOT MAINTAINABLE AS THE CROSS OBJECTIONS WERE FILED WITHIN TIME. IT WAS AGAIN REITERATED THAT AS PER THE PROVISIONS OF SECTION 153B OF THE ACT THE TIME LIMIT FOR PASS ING THE ASSESSMENT ORDER WAS UPTO 31.12.2008 BUT THE ASSESSMENT ORD ER HAS BEEN PASSED ON 24.12.2009 WHICH WAS BEYOND TIME AND DESERVES TO BE QUASHED AS PER THE AFORESAID REFERRED TO ORDER DATED 30.05.2014. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS : DCIT VS ADOLF PATRIC PINTO 284 ITR (A.T) 207 (SC). CIT VS DEEPAK AGARWAL 308 ITR 116 (DEL.) CI T VS WHITE AND WHITE MINERAL PVT. LTD. 330 ITR 172 (RAJ) CIT VS O.P MANDORA 94 DTR (RAJ). 209 ACI T VS SHRI RAM LIME PRODUCTS LTD. 2012 TIOL 329 ITAT JODHP UR ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 17 RAKESH SAREEN VS DCIT 2011 TIOL 185 HC - MAD - IT CIT VS PLASTICA ENTERPRISES ITA 1211 (2008) MUM. RAKESH KUAMR JAIN VS JCIT DATED 25/9/2012 (MAD.) TAX CASE 1240/06. 1 2 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS NOT COVERED BY THE EARLIER ORDER DATED 30.05.2014 PASSED BY THE ITAT IN THE CASE OF J. H. FINVEST PVT. LTD. WHICH BELONGS TO THE SAME GROUP TO WHICH THE ASSESSEE BELONGS AND EVEN THE BENCH IS NOT BOUND TO FOLLOW THE ORDER OF OTHER BENCH AND THAT THE EAR LIER DECISION MAY NOT BE TREATED AS PRECEDENCE BECAUSE THE FACTS OF EACH CASE ARE TO BE SEEN. IT WAS CONTENDED THAT IN THE DECISION RELIED BY THE LD. COUNSEL FOR THE ASSESSEE , THE ARGUMENTS ADVANCED ON BEHALF OF THE DEPARTMENT WERE NOT CONSIDERED AND APPRE CIATED IN RIGHT PROSPECTIVE . HOWEVER, WHEN A QUESTION WAS RAISED AS TO WHETHER ANY MISCELLANEOUS APPLICATION WAS FILED AGAINST THE SAID ORDER. THE LD. CIT DR ADMITTED THAT NO SUCH MISCELLANEOUS APPLICATION AGAINST THE SAID ORDER DATED 30.05.2014 WAS FILED BY THE DEPARTMENT. THE LD. CIT DR STATED THAT THE ASSESSEE DID NOT CHALLENGE THE ISSUE RELATING TO THE JURISDICTION BEFORE THE AO, THEREFORE, BY WAY OF ADDITIONAL GROUND IT SHOULD NOT BE RAISED BEFORE THE ITAT. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: SMT. SOHANI DEVI JAIN VS ITO 109 ITR 130 (GAU ) ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 18 RAJA BAHADUR KAMAKHYA NARAIN SINGH VS UNION OF INDIA 51 ITR 596 (PAT) RAI BAHADUR SETH TEOMAL VS CIT 36 ITR 09 (SC) 13 . THE LD. CIT DR FURTHER SUBMITTED THAT THE ISSUE RELATING TO THE JURISDICTIO N IS BASED ON THE FACTUAL ASPECT AND IT IS NOT A LEGAL ISSUE. HE POINTED OUT THAT IN EARLIER DECISION OF THE ITAT, THE PROVISIONS OF SECTION 124(3) WERE NOT CONSIDERED, W HICH PROVIDES THAT AFTER THE FINALIZATION OF THE ASSESSMENT PROCEEDINGS IT IS NOT OPEN TO THE ASSESSEE TO CHALLENGE THE JURISDICTION OF THE AO TO ASSESS IT. T HEREFORE, THE CASE RELIED BY THE LD. COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE ON FACTS. THE LD. CIT DR VEHEMENTLY ARGUED THAT THE ISSUE RELATING TO LIMITATION WAS NEITHER RAISED BEF ORE THE AO OR BEFORE THE LD. CIT(A). THEREFORE, IT CANNOT BE RAISED BY WAY OF ADDITIONAL GROUND PARTICULARLY WHEN THE GROUND WAS NOT TAKEN DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: SARDARA SINGH VS GULWANT KAUR AIR 1991 (NOC) I P&H DCIT VS SANDI P M. PATEL (2012) 22 TAXMAN.COM 288 (AHD.) JUTE CORPORATION OF INDIA VS CIT 187 ITR 688 (SC) CIT VS KANPUR COAL SYNDICATE 53 ITR 225 (SC) ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 19 ADL. CIT VS GURJARGRAVURES P. LTD. 111 ITR (SC ) SMT. SOHANI DEVI JAIN VS ITO 109 ITR 130 (FB GAU) UOI VS MAJOR BAHADUR SINGH (2006) 1 SCC 368 (SC) 14 . THE LD. CIT DR ALSO SUBMITTED THAT THE SEARCH WAS STOPPED ON 22.03.2007 BECAUSE ONE OF THE DIRECTOR SH. SANJEEV JAIN FELL ILL, SO IT WAS NOT THE FAULT OF THE DEPARTMENT AND THE SEARCH WAS TEMPORARILY CONCLUDED ON THE SAID DATE BY PASSING A RESTRAINT ORDER WHICH WAS LIFTED ON 15.05.2007 AND SEARCH STARTED AGAIN, THEREFORE, THE ORDER PASSED BY THE AO WAS NOT BELATED. THE RELIANCE WAS PLACED ON THE FOLLOWI NG CASE LAWS: BARODA DISTRIBUTORS P. LTD. 155 ITR 120 (SC) OMAR SALAY MOHMED SAIT 37 ITR 151 (SC) SMT. KRISHNA VERMA VS ACIT 113 ITD 655 (DEL) (SB) 15 . IN HIS REJOINDER THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS WRONG TO SAY THAT SEARCH WAS TE MPORARILY CONCLUDED BECAUSE IT CONTINUED EVEN WHEN SH. SANJAY JAIN AND SH. RAMESH SAREEN FELL ILL AND PRACTICALLY THE SEARCH WAS CONCLUDED ON 22.03.2007 WHEN PANCHNAMA WAS DRAWN AND JEWELLARY WAS SEIZED. IT WAS REITERATED THAT THE RESTRAINT ORDER WAS LIFTE D ON 15.05.2007 AT 4:25 PM , THE EARLIER JEWELLARY ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 20 SEIZED WAS RELEASED , ONLY A PART OF JEWELLARY BELONGING TO SMT. NEENA JAIN WHICH WAS VALUED ON 21.03.2007 WAS SEIZED AND THE SEARCH WAS CONCLUDE AT 6:45 PM. THEREFORE, PRACTICALLY THERE WAS NO SEARCH ON 15. 05.2007 AND IN FACT THE SEARCH WAS ALREADY CONCLUDED ON 22.03.2007 AT 6 AM. IT WAS FURTHER STATED THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS INVOLVED IN THE CASE OF M/S J. H. FINVEST PVT. LTD. VS ACIT IN CO NOS. 131 TO 137/DEL/2011 ORDER DATED 30.05.2014. THEREFORE, THE CONSISTENCY IS TO BE MAINTAINED AND THE ASSESSMENT ORDER FRAMED BY THE AO WHICH WAS BARRED BY LIMITATION DESERVES TO BE DISMISSED. 16 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILA BLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE SEARCH TOOK PLACE AT THE RESIDENT IAL PREMISES OF THE DIRECTORS AND THE OFFICE PREMISES OF THE ASSESSEE COMPANY ON 21.03.2007. IT WAS CONCLUDED AT 6 AM ON 22.03.2007 AND PANCHNAMA WAS D RAWN. ON THE SAID DATE A RESTRAINT ORDER U/S 132(3) OF THE ACT WAS PASSED WHICH WAS REVOKED ON 15.05.2007. HOWEVER, ON 15.05.2007 NO INCRIMINATING DOCUMENT OR ANY OTHER ASSET WAS FOUND OR SEIZED. ON THE SAID DATE THE EARLIER JEWELLARY BELONGING TO SMT. NEE NA JAIN WAS RELEASED AND A PART OF ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 21 JEWELLARY WHICH WAS VALUED ON 21.03.2007 WAS SEIZED, SO PRACTICALLY IT CAN BE SAID THAT THE SEARCH CONCLUDED ON 22.03.2007 BECAUSE ON 15.05.2007 NOTHING WAS FOUND WHEN RESTRAINT ORDER WAS REVOKED AND PANCHNAMA WAS DRAWN. AS REGARD S TO THE TIME LIMIT FOR COMPLETION OF ASSESSMENT U/S 153A OF THE ACT, THE RELEVANT PROVISION S CONTAINED U /S 153B ARE RELEVANT WHICH READ AS UNDER : 153B. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 153, THE ASSESSING OFFICER SHALL MAKE AN O RDER OF ASSESSMENT OR REASSESSMENT, ( A ) IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE ( B ) OF [SUB - SECTION (1) OF] SECTION 153A, WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LA ST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED; ( B ) IN RESPECT OF THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTI ON 132A , WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED : [ PROVIDED THAT IN CASE OF OTHER PERSON REFERRED TO IN SECTIO N 153C , THE PERIOD OF LIMITATION FOR MAKING THE ASSESSMENT OR REASSESSMENT SHALL BE THE PERIOD ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 22 AS REFERRED TO IN CLAUSE ( A ) OR CLAUSE ( B ) OF THIS SUB - SECTION OR ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SE IZED OR REQUISITIONED ARE HANDED OVER UNDER SECTION 153C TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, WHICHEVER IS LATER:] [ PROVIDED FURTHER THAT IN THE CASE WHERE THE LAST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED DURING THE FINANCIAL YEAR COMMENCING [ON OR AFTER THE 1ST DAY OF APRIL, 2004 BUT BEFORE THE 1ST DAY OF APRIL, 2010], ( I ) THE PROVISIONS OF CLAUSE (A) OR CLAUSE (B) OF THIS SUB - SECTION SHALL HAVE EFFECT AS IF FO R THE WORDS 'TWO YEARS' THE WORDS 'TWENTY - ONE MONTHS' HAD BEEN SUBSTITUTED; ( II ) THE PERIOD OF LIMITATION FOR MAKING THE ASSESSMENT OR REASSESSMENT IN CASE OF OTHER PERSON REFERRED TO IN SECTION 153C , SHALL BE THE PERIOD OF TWENTY - ONE MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED OR NINE MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUI SITIONED ARE HANDED OVER UNDER SECTION 153C TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, WHICHEVER IS LATER:] ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 23 17 . IN OUR OPINION, THE PROVISIONS CONTAINED IN THE ABOVE SECOND PROVISO TO SECTION 153B OF THE ACT ARE APPLICABLE TO T HE FACTS OF THE PRESENT CASE WHICH CLEARLY PROVIDES THAT THE ASSESSMENT U/S 153A IS REQUIRED TO BE COMPLETED WITHIN 21 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH LAST OF THE AUTHORIZATION FOR SEARCH U/S 132 OF THE ACT WAS EXECUTED. IN THE PRESENT C ASE, THE AUTHORIZATION FOR SEARCH WAS EXECUTED ON 21.03.2007, THE PANCHNAMA WAS DRAWN ON 22.03.2007 AFTER COMPLETION OF THE SEARCH, AS SUCH THE FINANCIAL YEAR ENDS ON 31.03.2007 AND 21 MONTHS PERIOD ENDS ON 31.12.2008. THEREFORE, THE ASSESSMENT WAS REQUIRE D TO BE FRAMED U/S 153A OF THE ACT ON OR BEFORE 31.12.2008. HOWEVER, IN THE PRESENT CASE, THE ASSESSMENT HAS BEEN FRAMED ON 24.12.2009, THEREFORE THE ASSESSMENT FRAMED WAS BARRED BY LIMITATION AND DESERVES TO BE QUASHED AS INVALID. FOR THE AFORESAID VIEW, WE ARE ALSO FORTIFIED BY THE DECISION DATED 30.05.2014 OF THE ITAT DELHI BENCH G , NEW DELHI IN COS NO. 131 TO 137/DEL/2011 FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 IN THE CASE OF J. H. FINVEST PVT. LTD. VS ACIT. THE SAID COMPANY ALSO BELONGS TO THE SA ME GROUP TO WHICH THE ASSESSEE BELONGS . I N THE SAID ORDER DATED 30.05.2014. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 10 TO 10.5 WHICH READ AS UNDER: ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 24 CONSIDERING THE ABOVE SUBMISSION IF THE DATE 23/3/2007 IS TAKEN AS THE DATE OF AUTHORIZATION, EXECU TED AS PER SECTION 153B OF THE ACT THEN THE AO WAS REQUIRED TO FRAME THE ASSESSMENT WITHIN 21 MONTHS FROM THE DATE FROM THE END OF THE FINANCIAL YEAR IN WHICH LAST OF THE AUTHORIZATION WAS EXECUTED AS PER SECTION 153B. AS PER THIS PROVISION, THE AO HAD TO COMPLETE THE ASSESSMENT BY 31/12/2008 IN THE PRESENT CASE, H OWEVER, THE ASSESSMENT U/S 153A/ 153C HAVE BEEN COMPLETED ON 24 - 12 - 2009/ 31/12/2009. IT IS THUS APPARENT THAT THE ASSESSMENT U/S 153A OR 153C ON 24/12/2009 OR 31/12/2009 HAVE BEEN FRAMED BEYOND 21 MONTHS FROM THE DATE FROM THE END OF THE FINANCIAL YEAR IN WHICH LAST OF THE AUTHORIZATION WAS EXECUTED AS PER SECTION 153B. 10.1. HAVING GONE THROUGH THE RELEVANT PROVISIONS OF THE I.T ACT, IT IS PERTINENT TO MENTION OVER HERE THAT ASSESSMENT/REASSESSME NT IN SEARCH CASES IS REQUIRED TO BE MADE WITHIN THE TIME SPECIFIED U/S 153B OF THE ACT. THE ASSESSMENT/REASSESSMENT IN RESPECT OF SIX ASSESSMENT YEARS SPECIFIED IN SECTION 153A (1) (B) AS WELL AS THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED U/S 132 OR REQUISITION IS MADE U/S 132A HAS TO BE MADE WITHIN THE PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEARS IN WHICH LAST OF THE AUTHORIZATIONS FOR SEARCH U/S 132 OR REQUISITE U/S 132A WAS EXECUTED. 10.2 HOWEVER, THE FIR ST PROVISO TO SECTION 153B PROVIDES THAT ASSESSMENT/REASSESSMENT IN RESPECT OF PERSON REFERRED TO IN SECTION 153C HAS TO BE MADE WITHIN THE PERIOD OF TWO YEARS AS MENTIONED IN THE PRECEDING PARAGRAPH OR ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITION ARE HANDED OVER U/S 153C TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSONS, WHICHEVER IS LATER. HOWEVER, THE PERIOD ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 25 SPECIFIED UNDER VARIOUS CLAUSES OF THE EXPLANATION TO SECTION 153B WILL H AVE TO BE EXCLUDED WHILE COMPUTING PERIOD OF LIMITATION U/S 153B. THIS LIMITATION PERIOD IS APPLICABLE TO THOSE CASES WHERE LAST OF THE AUTHORIZATIONS FOR SEARCH U/S 132 OR FOR REQUISITION U/S 132A WAS EXECUTED BEFORE 1/4/2004. WHERE SUCH AUTHORIZATION HAS BEEN EXECUTED ON OR AFTER 1/4/2004, THE PERIOD OF LIMITATION WOULD BE 21 MONTHS AS PER THE SECOND PROVISO. THE THIRD PROVISO PROVIDES THE PERIOD OF LIMITATION AS 33 MONTHS WHERE (I) LAST OF THE AUTHORIZATION U/S 132 OR 132 A WAS EXECUTED ON OR AFTER 1/4/2 005 AND (II) DURING THE COURSE OF ASSESSMENT PROCEEDINGS A REFERENCE U/S 92CA(A) WAS MADE BEFORE 1/6/2007 BUT AN ORDER U/S 92 CA (3) WAS NOT MADE BEFORE SUCH DATE OR (B) IS MADE ON OR AFTER 1/6/2007. THAT MEANS WHERE ORDER U/S 92CA(3) HAS BEEN MADE BEFORE 1/ 6/2007, THE PERIOD OF LIMITATION WOULD BE AS PER THE MAIN PROVISIONS OF SUB SECTION (1) OR THE FIRST OR SECOND PROVISO AS THE CASE MAY BE. THE FORTH PROVISO IS APPLICABLE TO THE PROCEEDINGS WHICH WERE INITIATED WITH REFERENCE TO, SECTION 153C ,AND REFERE NCE TO U/S 92CA HAS BEEN MADE AS MENTIONED IN THE THIRD PROVISO. IN SUCH CASES, THE PERIOD OF LIMITATION IS 33 MONTHS FROM THE END OF THE FINANCIAL YEAR IN LAST OF AUTHORIZATION U/S 132/132A WAS EXECUTED OR 21 MONTHS FROM THE END OF THE FINANCIAL YEAR IN W HICH BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITE ARE HANDED OVER U/S 153C TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON, WHICHEVER IS LATER. 10.3. THE 'AUTHORIZATION' MENTIONED IN SECTION 153B SHALL BE DEEMED TO HAVE BEEN EXECUTED WHEN THE LAST PANCHNAMA IS DRAWN IN THE CASE OF SEARCH OR ON THE DATE WHEN THE BOOKS OF ACCOUNTS/ OTHER DOCUMENTS/ ASSETS ARE ACTUALLY RECEIVED IN THE CASE OF REQUISITE U/S 132A AS PER EXPLANATION (2) TO SECTION 153B. THE PROVISIONS OF SECTION 153B ARE MO RE OR ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 26 LESS SIMILAR TO THE PROVISIONS OF SECTION 158 BE OF THE ACT. THEREFORE, THE DECISIONS RENDERED WITH REFERENCE TO THE PROVISIONS OF SECTION 158 BE WOULD BE RELEVANT WHILE DECIDING THE ISSUE OF LIMITATION U/S 153B. IT WOULD BE ALSO IMPORTANT TO UNDERST AND THE SCOPE OF THE EXPRESSION 'PANCHNAMA'. PANCHNAMA HAS NOT BEEN DEFINED IN THE ACT. THE PROVISIONS OF THE CODE OF CRIMINAL PROCEDURE, 1973 ('CR. PC') RELATING TO SEARCH A ND SEIZURE HAVE B EEN MADE APPLICABLE TO THE SEARCHES AND SEIZURE UNDER SUB - SECTION (1) AND SUB - SECTION (1A) OF SECTION 132 OF THE ACT BY VIRTUE OF SUB - SECTION (13) OF SECTION 132. EVEN THE RELEVANT PROVISIONS RELATING TO SEARCHES AND SEIZURE IN CR.P.C DO NOT DEFINE THE WORD 'PANCHNAMA'. ONLY A FORMAT IS PROVIDED IN WHICH PANCHNAMA IS TO BE PREPARED. THE SAID FORMAT HAS BEEN ADOPTED BY THE INCOME - TAX DEPARTMENT FOR PREPARING THE PANCHNAMA. 'PANCHNAMA' IS ALSO NOT A WORD OF ENGLISH LANGUAGE. HOWEVER, IN INDIA, 'PANCHNAMA' IS A WORD OF JUDICIAL RECOGNITION. 'PANCHNAMA' COMPRISES OF TWO INDI AN WORKS 'PANCH' AND 'NAMA' MEAN - 'WITNESS' WHILE 'NAMA' IS USED TO REPRESENT 'DOCUMENT'. THUS, 'PANCHNAMA' IN COMMON PARLANCE AS WELL AS IN JUDICIAL CIRCLE IS UNDERSTOOD AS A DOCUMENT PREPARED IN RESPECT OF ANY PROCEEDING IN THE PRESENCE OF WITNESSES. THE CONCEPT OF 'PANCHNAMA' HAS BEEN BROUGHT OR INTRODUCED VIS - A - VIS THE SEARCH AND SEIZURE PROCEEDINGS IN ORDER TO SAFEGUARD THE INTEREST OF THE PERSON WHERE PREMISES HAVE BEEN SEARCHED AND TO CURB THE MISUSE OF THE POWERS OF SEARCH PARTY. THAT MEANS THE REQUI REMENT OF THE PRESENCE OF WITNESSES IS A SINE QUA NON FOR CONDUCTING OF A VALID SEARCH IN RESPECT OF WHICH PANCHNAMA IS TO BE PREPARED. FURTHER, THE OBJECT BEHIND THIS REQUIREMENT IS THAT, ANYTHING FOUND AND SEIZED IS TRULY RECORDED IN THE PANCHNAMA. IF NO THING IS FOUND, THEN SUCH FACT MUST BE MENTIONED IN THE PANCHANMA. ON THE OTHER HAND, IF SOMETHING IS FOUND, THEN IT MUST BE DULY INVENTORISED IN THE ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 27 PRESENCE OF WITNESSES. FURTHER, IF ANY SEIZURE IS REQUIRED TO BE MADE, THEN THE SAME SHOULD ALSO BE MADE I N THEIR PRESENCE. ONCE IT IS DONE, THE SAME SHOULD BE TRULY RECORDED IN SUCH PANCHNAMA. SEARCH CAN BE SAID TO BE CONCLUDED IF ALL THESE TRANSACTIONS ARE COMPLIED WITH. IN THIS REGARD WE FIND STRENGTH FROM THE CONTENTS OF PARA 6 OF THE ORDER OF JUDICIAL MEM BER IN THE CASE OF NANDLAL GANDHI 115 ITD 1 (MUM). IN THE CASE OF CIT VS. SANDHYA P NAIK 253 ITR 534 (BOM), THE QUESTION WAS WHETHER THE PROHIBITORY ORDER U/S 132(3) WOULD EXTEND THE PERIOD OF LIMITATION U/S 158 BE. THE COURT DECIDED AGAINST THE REVENUE BY OBSERVING AS UNDER: 'ACTION U/S 132(3) OF THE INCOME - TAX ACT CAN BE RESTORED TO ONLY IF THERE IS A PRACTICAL DIFFICULTY IN SEIZING THE ITEM WHICH IS LIABLE TO BE SEIZED. WHEN THERE IS NO SUCH PRACTICAL DIFFICULTY THE OFFICER IS LEFT WITH NO OTHER ALTE RNATIVE BUT TO SEIZE THE ITEM, IF HE IS OF THE VIEW THAT IT REPRESENTED UNDISCLOSED INCOME. POWER U/S 132(3) OF THE INCOME - TAX ACT THUS CANNOT BE EXERCISED SO AS TO CIRCUMVENT THE PROVISIONS OF SECTION 132(3) READ WITH SECTION 132(5) OF THE INCOME - TAX ACT. THE POSITION HAS BECOME MUCH MORE CLEAR AFTER THE INSERTION OF THE EXPLANATION TO SECTION 132(3) EFFECTIVE FROM 1/7/1995, THAT A RESTRAINT ORDER DOES NOT AMOUNT TO SEIZURE. THEREFORE, BY PASSING A RESTRAINT ORDER, THE TIME - LIMIT AVAILABLE FOR FRAMING OF T HE ORDER CANNOT BE EXTENDED.' IN THE CASE OF B. K. NOWLAKHA & ORS VS. UOI 192 ITR 436 ( DEL ) , THE SEARCH WAS CONDUCTED ON 11/2/91 IN THE COURSE OF WHICH CERTAIN UNEXPLAINED ASSETS INCLUDING ANTIQUE PIECES WERE FOUND. NO SEIZURE WAS MADE ON THAT DATE BUT O RDER OF RESTRAINT WAS PASSED U/S 132(3) OF THE ACT WHICH WAS LIFTED ON 9/4/91. THE QUESTION BEFORE THE COURT WAS WHETHER SUCH ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 28 ORDER WAS VALID ONE SO THAT PERIOD OF LIMITATION COULD BE EXTENDED FOR THE PURPOSE OF SECTION 132(5) OF THE ACT. THE HON'BLE COURT ANSWERED THE QUESTION IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 'COMING TO THE FACTS OF THE PRESENT CASE, WE FIND THAT THE RESTRAINT ORDERS WHICH HAVE BEEN ISSUED U/S 132(3), FROM TIME TO TIME, SUFFER FROM TWO INFIRMITIES, FIRSTLY, FOR THE REASON S STATED IN THE REPLY AFFIDAVIT, WHICH ARE ALSO BORNE OUT FROM THE DEPARTMENT' RECORD, IT CANNOT BE SAID THAT IT WAS NOT PRACTICABLE TO EFFECT SEIZURE. IN OTHER WORDS, THE CONDITIONS NECESSARY FOR THE EXERCISE OF THE JURISDICTION U/S 132(3) DID NOT EXIST. SECONDLY, WE FIND THAT THE RESTRAINT ORDERS HAVE BEEN CANCELLED AND RENEWED FROM TIME TO TIME AND, IN THE PRESENT CIRCUMSTANCES, WE DO NOT THINK THAT THIS WAS VALIDLY DONE.' 'SECTION U/S 132(3) CAN BE RESTORED TO IF THERE IS ANY PRACTICAL DIFFICULTY IN SEIZING THE ITEM WHICH IS LIABLE TO BE SEIZED. IF THERE IS NO PRACTICAL DIFFICULTY, THEN AN AUTHORIZED OFFICER HAS THE JURISDICTION AND DUTY TO SEIZE THE BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, VALUABLE ARTICLES, ETC., WHICH ARE FOUND AS A RESUL T OF THE SEARCH, IF NO EXPLANATION IS COMI NG FORWARD IN RESPECT THEREOF. THEREFORE, WHEN THE SEARCH WAS EFFECTED ON FEBRUARY 11, 1991, AND THE PETITIONERS WERE UNABLE TO GIVE ANY VALID EXPLANATION AS DEMANDED BY THE RESPONDENTS, THEN THE ONLY POWER WHICH COULD HAVE BEEN EXERCISED OR SHOULD HAVE BEEN EXERCISED BY THE AUTHORIZED OFFICER WAS TO EFFECT SEIZURE.' THOUGH THE ABOVE DECISION WAS RENDERED WITH REFERENCE TO LIMITATION U/S 132(5) OF THE ACT YET IT WOULD BE RELEVANT FOR DECIDING THE ISSUE OF LIMITAT ION U/S 132(3) WOULD AFFECT THE PERIOD OF LIMITATION IN AS MUCH THE VALIDITY OF LAST ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 29 PANCHNAMA WOULD DEPEND ON THE VALIDITY OF THE ORDER U/S 132(3). IN THE CASE OF NAND LAL GANDHI VS. ACIT 115 ITD L(MUM) (TM), SEARCH WAS CONDUCTED ON 28/7/97 IN THE COURS E OF WHICH CERTAIN INCRIMINATING MATERIALS INCLUDING SHARES AND JEWELLERY WE R E FOUND WHICH WERE INVENTORISED. VALUATION OF JEWELLERY WAS ALSO MADE. A PANCHNAMA WAS PREPARED IN WHICH IT WAS MENTIONED THAT ONLY BOOKS OF ACCOUNT AND DOCUMENTS WERE BEING SEIZE D AND THE SEARCH WAS STATED TO BE TEMPORARILY CONCLUDED. A PROHIBITORY ORDER WAS ISSUED U/S 132(3) IN RESPECT OF THE SHARES AND JEWELLERY WHICH WAS LIFTED ON 8/9/97. A PANCHNAMA WAS ALSO PREPARED ON THAT DAY WHICH MERELY STATED THAT SEARCH WAS CONCLUDED. T HE BLOCK ASSESSMENT WAS CONCLUDED ON 30/9/99. THE QUESTION BEFORE THE TRIBUNAL WAS WHETHER ASSESSMENT WAS TIME BARRED. THE TRIBUNAL, BY MAJORITY OPINION, HELD THAT PANCHNAMA DATED 8/9/97 AS WELL AS RESTRAINT ORDER WERE INVALID AND THEREFORE, THE PERIOD OF LIMITATION WAS TO BE COUNTED FROM THE END OF THE MONTH OF JULY 97. HENCE, THE ASSESSMENT WAS TIME BARRED. THE REASON GIVEN BY THE TRIBUNAL WAS THAT EVERY ACT OF SEARCH WAS COMPLETED ON 28/7/97 AND NOTHING REMAINED TO BE DONE WITH REFERENCE TO THE SHARES & JE WELLERY SINCE THE SAME HAD ALRE ADY BEEN INVENTORISED AND VALUED. FURTHER NOTHING WAS DONE ON 8/9/97 EXCEPT LIFTING THE ORDER. THEREFORE, THE ORDER U/S 132(3) WAS INVALID IN VIEW OF BOMBAY HIGH COURT JUDGMENT IN THE CASE OF SANDHYA NAIK (SUPRA). SIMILAR V IEW HAS BEEN TAKEN BY THE TRIBUNAL IN THE CASE OF DCIT VS. ADOLF PATRIC PINTO 100 ITD 191 (MUM), SARB CONSULATE MARINE PRODUCTS 97 ITD 333(DEL). IN THE CASE OF V. L. S. FINANCE LTD. VS CIT 289 ITR 286 (DEL), A SEARCH WARRANT WAS ISSUED AND SEARCH WAS ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 30 CON DUCTED ON 22/6/98. HOWEVER, DUE TO VOLUMINOUS RECORD, SEARCH HAD TO BE CONDUCTED AGAIN AND AGAIN TILL 5/8/98 WHEN THE LAST PANCHNAMA WAS PREPARED. THE BLOCK ASSESSMENT REMAINED PENDING TILL 29/6/2000 WHEN ORDER FOR SPECIAL AUDIT U/S 142(2A) WAS PASSED WHIC H WAS ALLEGEDLY NOT RECEIVED BY THE ASSESSEE BY 30/6/2000. THE ASSESSEE CHALLENGED THE SAID ORDER IN THE WRIT PETITION BEFORE THE HON'BLE DELHI HIGH COURT. LATER ON, THE PETITION WAS AMENDED TO CONTEND THAT ASSESSMENT PROCEEDINGS HAD BECOME TIME BARRED U/S 158BE OF THE ACT SINCE PERIOD OF LIMITATION SHOULD BE COUNTED FROM THE END OF THE MONTH OF JUNE 98 IN AS MUCH AS SEARCH COULD NOT BE VALIDLY CONTINUED TILL 5/8/98 ON THE BASIS OF SINGLE AUTHORIZATION. THE COURT FOUND THAT THE SAID AUTHORIZATION WAS REVALI DATED FROM TIME TO TIME AND THEREFORE SEARCH WAS VALIDLY CONTINUED TILL 5/8/98. CONSEQUENTLY, IT WAS HELD THAT THE PERIOD OF LIMITATION HAD TO BE COUNTED FROM THE END OF THE MONTH OF AUGUST 98 SINCE LAST PANCHNAMA WAS PREPARED ON 5/8/98. THE LEGAL POSITI ON EMERGING FROM THE ABOVE DECISIONS IS THAT IF ALL ACTIONS OF SEARCH ARE COMPLETED AND NOTHING IS LEFT TO BE DONE BY THE SEARCH PARTY THEN, THE ACTION OF THE AUTHORIZED OFFICER U/S 132(3) WOULD BE ILLEGAL AND CONSEQUENTLY ANY PANCHNAMA PREPARED ON THE DAT E OF LIFTING THE ORDER U/S 132(3) WOULD BE OF NO CONSEQUENCE FOR THE PURPOSE OF COMPUTING THE LIMITATION PERIOD U/S 153B. HOWEVER AN INTERESTING QUESTION AROSE ABOUT THE SCOPE OF THE EXPRESSION 'LAST OF THE AUTHORIZATIONS' MENTIONED IN SECTION 158BE BEFO RE THE TRIBUNAL IN THE CASE OF SHAH RUKH KHAN VS. ACIT 104 ITD 221 (MUM). IN THAT CASE, ONE AUTHORIZATION WAS ISSUED IN RESPECT OF RESIDENCE ON 17/12/96 WHILE TWO AUTHORIZATIONS WERE ISSUED ON 23/12/96 IN RESPECT OF TWO LOCKERS. IN RESPECT OF SEARCH OF LOC KERS, PANCHNAMAS ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 31 WERE PREPARED ON THE SAME DATE. HOWEVER, THE AUTHORIZATION DATED 17 /12/96 WAS ISSUED ON THREE DATES I.E. 17/12/96, 23/12/96 AND 30/1/97, THE CASE OF REVENUE WAS THAT PERIOD OF LIMITATION WOULD COMMENCE FROM THE END OF THE MONTH OF JANUARY 97 WHILE THE CASE OF ASSESSEE WAS THAT IT WOULD COMMENCE FROM THE END OF THE MONTH OF DECEMBER 96. THE TRIBUNAL AGREED WITH THE CONTENTION OF ASSESSEE BY OBSERVING AS UNDER: - '16. FROM BARE READING OF SECTION 158BE IT IS CLEAR THAT THE ASSESSMENT HAS TO BE CONCLUDED U/S 158BC, IN CASES WHERE THE SEARCH IS INITIAT ED AFTER 30/6/1996 BUT BEFORE 1/6/1 997, WITHIN ONE YEAR FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORIZATIONS FOR THE SEARCH U/S 132 WAS EXECUTED. THE EXPLANATION 2 OF SECTION 158BC W AS INSERTED BY FINANCE (NO.2) ACT, 1998 WITH RETROSPECTIVE EFFECT FROM 1/7/1995, WHICH MAKES IT CLEAR THAT THE AUTHORIZATION REFERRED TO IN SUB - SECTION (1) OF SECTION 158BE SHALL BE DEEMED TO HAVE BEEN EXECUTED ON THE CONCLUSION OF SEARCH AS RECORDED IN TH E LAST PANCHNAMA DRAWN IN RELATION TO ANY PE RSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED. THE SAID EXPLANATION IS WITH REGARD TO AUTHORIZATION REFERRED TO SUB - SECTION (1) WHICH REFERS TO LA S T OF THE AUTHORIZATIONS. WHICH MEANS THAT THE L AST OF THE PANCHNAMA HAS TO BE TAKEN INTO ACCOUNT IN RESPECT OF LAST OF THE AUTHORIZATIONS FOR SEARCH, AS THERE COULD BE MORE THAN ONE PANCHNAMAS IN RESPECT OF SAME AUTHORIZATION. THE CRUX OF THE MATTER REMAINS THAT THE LIMITATION SHALL START FROM THE END OF THE MONTH IN WHICH LAST OF THE AUTHORIZATION IS EXECUTED. WE DO NOT AGREE WITH THE CONTENTIONS OF THE LD. CIT DR THAT ALL THE AUTHORIZATIONS ARE TO BE TREATED AS COMMON KITTY AND THE LAST DATE OF ANY OF THE AUTHORIZATIONS SHOULD BE TAKEN AS ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 32 STARTING P OINT FOR THE PURPOSE OF LIMITATION. THE SECTION 158BE CLEARLY STATED THAT THE LIMITATION WILL START FROM THE END OF THE MONTH IN WHICH LAST OF THE AUTHORIZATIONS WAS EXECUTED. IT PRE - SUPPOSES THAT THERE CAN BE A SITUATION WHERE MORE THAN ONE AUTHORIZATIONS FOR SEARCH U/S 132 ARE ISSUED AND THE EXECUTION OF THE LAST OF THE SUCH AUTHORIZATIONS IS TO BE CONSIDERED AS THE STARTING POINT FOR THE PURPOSE OF LIMITATION. IT DEARLY REFERS TO THE LAST AUTHORIZATION IN CASE WHERE MORE THAN ONE AUTHORIZATIONS ARE ISSUE D. AS SUCH IT CANNOT BE HELD THAT ALL THE AUTHORIZATIONS ISSUED SHOULD BE TREATED AS A COMMON KITTY AND ANYONE OF THE AUTHORIZATION WHICH IS EXECUTED AT THE END SHOULD BE CONSIDERED FOR THE PURPOSE OF LIMITATION.' 10.4 IT WOULD, THUS, BE CLEAR THAT WHERE VARIOUS AUTHORIZATIONS ARE ISSUED AND VARIOUS PANCHNAMAS ARE PREPARED, IT IS NOT THE LAST PANCHNAMA OF ANY AUTHORIZATION BUT IT IS THE LAST PANCHNAMA PREPARED IN RESPECT OF LAST AUTHORIZATION WHICH IS THE RELEVANT FOR COMPUTING THE LIMITATION PERIOD. SI MILAR VIEW HAS BEEN EXPRESSED IN THE FOLLOWING CITED DECISIONS: - DCIT VS. ADOLF PATRIC PINTO 284 ITR (A.T) 207 AFFIRMED BY MUMBAI HIGH COURT (856 OF 2008 DATED 5/9/2008. SLP DISMISSED 322 ITR (ST) (SC). CIT VS. DEEPAK AGARWAL 308 ITR 116 (DEL.) SLP NO. 16360/2009 DATED 91712009 DISMISSED. CIT VS. WHITE AND WHITE MINERAL PVT. LTD 330 ITR 172 (RAJ) SLP DISMISSED CC 1138/2010 DATED 1/2/2010. CIT VS. O.P MANDORA 94 DTR (RAJ). 209 DATED 23/8/2013. ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 33 ACIT VS. SHRI RAM LIME PRODUCTS LTD. 2012 TIOL 329 ITAT JOD HPUR SPECIAL BENCH DATED 61612012. RAKESH SAREEN VS. DCIT 2011 TIOL 185 HC - MAD - IT CIT VS. PLASTICA ENTERPRISES ITA 1211 (2008) MUM. DATED 15/12/2008 RAKESH KUAMR JAIN VS. JCIT DATED 25/9/2012 (MAD.) TAX CASE 1240/06. 10.5. IN VIEW OF ABOVE DECISIONS W HEN WE EXAMINE THE FACTS OF THE PRESENT CASE, WE FIND THAT IN ALL THE CASES BEFORE US ASSESSMENTS U/S 153A AND 153C HAVE BEEN FRAMED IN PURSUANCE TO SEARCH MADE ON 21/3/2007 AND CONCLUDED ON 23/3/2007 ON THE AUTHORIZATION DATED 20.3.2007. THEREAFTER NO SEA RCH RELATING TO THE AFORESAID ASSESSEES WAS MADE, ONLY PROHIBITORY ORDERS HAVE BEEN REVOKED THAT TOO RELATING TO ASSETS OF SMT. NEENA JAIN INVENTORY OF WHICH WAS ALREADY MADE ON 21/3/2007. THUS, THE ASSESSMENTS IN QUESTION WERE REQUIRED TO BE FRAMED BY 31/ 12/2008 WHILE THE SAME HAVE BEEN FRAMED IN DECEMBER, 2009. WE ALSO NOTE THAT IN THE AUTHORIZATION LETTER DATED 20/3/2007 NAMES AND ADDRESS OF THE ASSESSEE IN QUESTION HAVE NOT BEEN MENTIONED BUT IN PANCHNAMA DATED 15/5/2007 DRAWN IN PURSUANCE TO THE EXECUT ION OF THE SAID AUTHORIZATION LETTER DATED 20/3/2007 NAMES OF ALL THESE ASSESSEES HAVE BEEN MENTIONED. PANCHNAMA ALSO SHOWS THAT ON 15/5/2007 SEARCH AT RESIDENTIAL PREMISES STARTED AT 4.25 PM AND CONCLUDED ON 6:45 PM AND IN THIS SEARCH NOTHING RELATED TO T HE ASSESSEES IN QUESTION WAS SEIZED. WE THUS FIND SUBSTANCE IN THE CONTENTION OF THE LD. AR AND FULLY CONCUR WITH HIM THAT THE ASSESSMENTS IN QUESTION ARE BARRED BY TIME LIMIT AND AS SUCH ARE BEING QUASHED AS INVALID. THE GROUND NO. 2 (ADDL. GROUND) IS THU S ALLOWED IN FAVOUR OF THE ASSESSEE. ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 34 18 . WE, THEREFORE, IN VIEW OF THE AFORESAID DISCUSSION AND RESPECTFULLY FOLLOWING THE ORDER DATED 30.05.2014 IN THE CASE OF J. H. FINEVEST P VT. LTD. VS ACIT (SUPRA) ALLOW THE ADDITIONAL GROUND OF THE CROSS OBJECTIO N IN ASSESSEE S FAVOUR. SINCE WE HAVE ALLOWED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE AND QUASHED THE ASSESSMENT FRAMED BY THE AO. THEREFORE, NO FINDINGS ARE BEING GIVEN ON OTHER ISSUES RAISED BY THE DEPARTMENT OR BY THE ASSESSEE ON MERIT. IN OTHER CO S I.E. CO NOS. 266 TO 269/DEL/2011, THE FACTS ARE SIMILAR THEREFORE OUR FINDING GIVEN IN CO NO. 265/DEL/2011 SHALL APPLY WITH THE SAME FORCE. ACCORDINGLY, THE APPEALS OF THE DEPARTMENT IN ITA NOS. 3158 TO 3162/DEL/2011 ARE DISMISSED AND THE CO NOS. 265 TO 26 9/DEL/2011 FILED BY THE ASSESSEE ARE ALLOWED. 1 9 . IN THE CASE OF M/S SURYA VINAYAK INDUSTRIES LTD. (AMALGAMATED COMPANY OF AMALGAMATING COMPANY M/S RIM ZIM VALLEY PRODUCTS PVT. LTD. IN ITA NOS. 3167 TO 3170/DEL/2011 PREFERRED BY THE D EPARTMENT AND CO NOS . 270 TO 272/DEL/2011 BY THE ASSESSEE, THE FACTS ARE SIMILAR , THE ASSESSEE ALSO MOVED APPEAL IN ITA NO. 1682/DEL/2012 FOR THE ASSESSMENT YEAR 2002 - 03 AND RAISED THE ADDITIONAL GROUND IN THE SIMILAR MANNER AS IN THE CO S, THEREFORE, THIS ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 35 APPEAL OF THE ASSES SEE ALONG WITH CO NOS. 270 TO 272/DEL/2011 ARE ALLOWED WHILE THE APPEAL OF THE DEPARTMENT IN ITA NOS. 3158 TO 3162/DEL/2011 ARE DISMISSED. FOR THE ASSESSMENT YEAR 2006 - 07, THE ASSESSEE HAS FILED THE APPEAL IN ITA NO. 1683/DEL/2012 AND RAISED THE ADDITIONAL GROUND CHALLENGING THE VALIDITY OF THE ASSESSMENT. THIS APPEAL OF THE ASSESSEE IS ALSO ALLOWED, HOWEVER, THE CO NO. 273/DEL/2011 FOR THE SAME ASSESSMENT YEAR IS TREATED AS INFRUCTUOUS. S IMILARLY I N ITA NOS. 3173 TO 3177/DEL/2011 FILED BY THE DEPARTMENT AN D CO NOS. 282 TO 286/DEL/2011 PREFERRED BY THE ASSESSEE IN THE CASE OF M/S J. H. BUSINESS INDIA PVT. LTD., T HE IDENTICAL FACTS ARE INVOLVED, THEREFORE THE APPEALS OF THE DEPARTMENT ARE DISMISSED AND CO S OF THE ASSESSEE ARE ALLOWED. AS REGARDS TO THE CASE OF SH. SANJAY JAIN, THE ASSESSEE RAISED THE SIMILAR ADDITIONAL GROUND IN ITA NOS. 5024 & 5025/DEL/2011 FOR THE ASSESSMENT YEAR S 2002 - 03 & 2001 - 02 RESPECTIVELY, SO THESE APPEALS ARE ALSO ALLOWED. THE DEPARTMENT HAS PREFERRED APPEALS IN ITA NOS. 5325/DEL/201 3 & 4753/DEL/2011 FOR THE ASSESSMENT YEARS 2005 - 06 & 2007 - 08 RESPECTIVELY WHILE THE ASSESSEE HAS FILED THE CROSS OBJECTION IN CO NOS. 1/DEL/2015 & 227/DEL/2012 FOR THE ASSESSMENT YEARS 2005 - 06 & 2007 - 0 8 RESPECTIVELY. THE ASSESSEE HAS RAISED SIMILAR ADDITIO NAL GROUND IN THE CROSS ITA NO S . 3158 TO 3162, 3167 TO 3170, 3173 TO 3177, 5024, 5025, 4753/DEL/2011, 1682 TO 1685/DEL/2012, 5325/DEL/2013& CO 265 TO 269, 270 TO 273, 282 TO 286/DEL/2011, 1/DEL/2015 & 227/DEL/2012 36 OBJECTIONS AS WER E RAISED BY THE OTHER ASSESSEES IN THEIR RESPECTIVE CROSS OBJECTIONS, THEREFORE, THE APPEALS OF THE DEPARTMENT FOR THE ASSESSMENT YEAR S 2005 - 06 & 2007 - 08 ARE DISMISSED WHILE THE CROS S OBJECTIONS OF THE ASSESSEE FOR SAME ASSESSMENT YEARS ARE ALLOWED. 20 . IN THE RESULT, APPEAL S OF THE DEPARTMENT ARE DISMISSED AND THE CROSS OBJECTIONS OF THE ASSESSEE S ARE ALLOWED AS INDICATED ABOVE . ( ORDER PRON OUNCED IN THE COURT ON 06 /10 / 2015) . SD/ - SD/ - (A. T. VARKEY ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 06 /10 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR