Rajkumar B. Agrawal, Pune V. ACIT Cent. Cir.-1(1), Pune

ITA 49/PUN/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62749 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-06-2012
• Assessment Year: misc
• Appeal Filed On: 10-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR PRAYAG JHA
• Assessee Lawyers: R G NAHAR
• Keywords: Search and seizure; Loose papers; Period of limitation; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 49/PN/2007 ( BLOCK ASSTT. YEARS : 1997-98 TO 2003-04) RAMKUMAR B. AGA RWAL , ... APPELLANT C/O. KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, 1 ST FLOOR, ALANKAR CINEMA BLDG, PUNE 411 001 PAN : AABA6836B V/S ASSTT. COMMISSIONER OF INCOME TAX, RESPONDENT CENTRAL CIR 1(1), PUNE ITA NO. 123/PN/2007 ( BLOCK ASSTT. YEAR : 1997-98 TO 2003-04) ANIL R. AGARWAL APPELLANT C/O. KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, 1 ST FLOOR, ALANKAR CINEMA BLDG, PUNE 411 001 PAN : NOT AVAILABLE V/S ASSTT. COMMISSIONER OF INCOME TAX, RESPONDENT CENTRAL CIR 1(1), PUNE ITA NO. 124/PN/2007 ( BLOCK ASSTT. YEAR : 1997-98 TO 2003-04) SUNIL R. AGARWAL APPELLANT C/O. KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANTS, 1 ST FLOOR, ALANKAR CINEMA BLDG, PUNE 411 001 PAN : AAVPA6833F V/S ASSTT. COMMISSIONER OF INCOME TAX, RESPONDENT CENTRAL CIR 1(1), PUNE ITA NO. 330/PN/2007 (BLOCK ASSTT. YEAR : 1997-98 TO 2003-04) THE DY. COMMISSIONER OF INCOME TAX APPELLANT CENTRAL CIR-1(1), PUNE V/S SHRI SUNIL R. AGARWAL RESPONDENT SEIKO APARTMENTS, YERWADA, PUNE. ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 2 ITA NO. 331/PN/2007 (BLOCK ASSTT. YEAR : 1997-98 TO 2003-04) THE DY. COMMISSIONER OF INCOME TAX APPELLANT CENTRAL CIR- 1(1), PUNE V/S SHRI ANIL R. AGARWAL RESPONDENT SEIKO APARTMENTS, YERWADA, PUNE ASSESSEE BY : SHRI.R.G. NAHAR DEPARTMENT BY : DR. PRAYAG JHA, CIT DATE OF HEARING : 25/6/12 DATE OF PRONOUNCEMENT : 26-6-12 O R D E R PER R.S. PADVEKAR, JM IN THIS BATCH OF FIVE APPEALS, THREE APPEALS ARE BY THREE DIFFERENT ASSESSEES AND TWO APPEALS ARE FILED BY THE REVENUE AS CROSS APPEALS. THESE APPEALS ARE ARISING OUT OF THE BLOCK ASSESSMENT FRAMED U/S. 153BC (C) OF THE I.T. ACT 1961 IN CONSEQUENCE OF SEARCH AND SE IZURE OPERATION CONDUCTED AGAINST THESE ASSESSEES ON 5.9.2002. 2. WE FIRST TAKE THE APPEALS FILED BY THE ASSESSEES BEING ITA NO. 49, 123 AND 124/PN/2007. THE ASSESSEES HAVE CHALLENGED THE VALIDITY OF THE BLOCK ASSESSMENTS FRAMED BY THE A.O. U/S. 158 BC(C ) OF THE ACT BY RAISING THE LEGAL GROUND THAT THE ASSESSMENT FRAMED BY THE A.O ARE BEYOND THE PERIOD OF LIMITATION PRESCRIBED U/S. 158BE OF THE ACT AND HENCE, AS SESSMENT ORDERS IN THE CASES OF THESE ASSESSEES ARE BAD IN LAW AND VOID AB INITIO . IN ADDITION TO THESE LEGAL CONTENTIONS, THE ASSESSEES HAVE A LSO TAKEN THE GROUNDS ON MERIT. SO FAR AS THE LEGAL GROUND IS CONCERNE D, IT GOES TO THE ROOT OF THE MATTER, HENCE WE HEARD THE PARTIES ON THES E LEGAL GROUNDS. AFTER HEARING WAS CONCLUDED ON THE LEGAL GROUND, IT WAS MADE C LEAR TO BOTH THE ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 3 PARTIES THAT IN CASE THE ASSESSEES DO NOT SUCCEED ON THE LEGAL GROUND, THEN THESE APPEALS WILL BE RE-POSTED FOR HEARING ON GROUNDS TAKEN ON ME RIT. 3. THE FACTS PERTAINING TO SEARCH ACTION REVEAL FROM THE RECORD ARE AS UNDER. SHRI RAMKUMAR B. AGARWAL IS THE CHAIRMAN OF AGRASE N URBAN CO- OPERATIVE BANK LTD. AT THIS STAGE, IT IS NOT NECESSARY FOR US TO GO INTO THE REASONS AND BACKGROUND AS TO WHY THE SEARCH ACTION U /S 132(1) WAS TAKEN AGAINST THESE THREE ASSESSEES BY THE DEPARTMENT. IT IS SUFFICE TO STATE THAT ON THE INVESTIGATION IN CASE OF OTHER PERSON, IT WAS FOUND THAT FDRS WERE CREATED BY THE BANK ON THE FICTITIOUS NAMES AND AGAINST THOSE FDRS, THE LOANS WERE SANCTIONED. IN THE INVESTIGATION, IT WAS NOTICED THAT ASSESSEE NAMELY SHRI RAMKUMAR B. AGARWAL WHO WAS THE CHAIRMAN O F THE AGRASEN URBAN CO-OPERATIVE BANK LTD. WAS ALSO INVOLVED IN MAKING THE FIXED DEPOSITS ON THE FICTITIOUS NAMES. THE WARRANT OF AUTHORIZ ATION WAS EXECUTED ON 5.9.2002 COVERING THE RESIDENTIAL AND BUSINESS PREMISES OF THESE ASSESSEES. DURING THE COURSE OF SEARCH AND SEIZU RE OPERATION, ONE CUPBOARD WAS SEALED AND PROHIBITORY ORDER U/S. 132(3) WA S ISSUED ON 6.9.2002. AS PER THE PROHIBITORY ORDER ISSUED U/S. 132 (3), CERTAIN LOOSE PAPERS, NOTE BOOKS, FILES ETC. WERE KEPT IN THE CUPBOARD IN THE BED ROOM OF SHRI SUNIL AGARWAL. ON 1.11.2002, ANOTHER PANCHNAMA WAS DRAWN IN SHOWING SAME IN FURTHERANCE OF THE PROCEEDINGS HELD ON 6.9 .2002 AND THE SAID PANCHNAMA IS UNDER CHALLENGE IN THESE PROCEEDINGS. THE A.O. PASSED THE ASSESSMENT ORDER IN ALL THE THREE CASES U/S. 158BC (C) OF THE ACT ON 30 TH NOVEMBER 2004. THE CONTENTION OF THE ASSESSEE IS THAT THE WARRANT O F AUTHORIZATION WAS EXECUTED ON 5.9.2002 AND SEARCH WAS FINALLY CONCLUDED ON 6.9.2002/7.9.2002. THE ASSESSEES CONTENTION IS THAT T HE A.O. SHOULD HAVE PASSED THE ASSESSMENT ORDERS ON OR BEFORE 30 TH SEPTEMBER 2004 AS THE SEARCH ACTION WAS FINALLY CONCLUDED ON 6.9.2002 OR 7.9. 2002 AND FINAL THE PANCHNAMAS WERE DRAWN ON THOSE DATES. THE ASSES SEE RAISED THE ISSUE ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 4 BEFORE THE LD CIT(A) AND RELIED ON THE DECISION OF HONBLE H IGH COURT OF BOMBAY IN THE CASE OF CIT VS. MRS. SANDHYA P. NAIK, 253 ITR 534 (BOM) BUT ASSESSEES GROUND WAS DISMISSED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LD COUNSEL TOOK US THROUGH THE PAPER BOO K, PARTICULARLY PAGE NOS. 52 TO 58. HE SUBMITS THAT AS PER THE PANCHNAMA D ATED 5.9.2002, (PAGE NO. 52 OF P.B.-I), CASH OF RS. 21,510/- WAS FOUND BUT NOT SEIZED. HE SUBMITS THAT THE SAID PANCHNAMA IS A COMMON PANCHNA MA IN THE CASE OF THESE THREE ASSESSEES. AS PER THE SAID PANCHNAMA, THE WARRANT OF AUTHORIZATION DATED 4.9.2002 WAS EXECUTED ON 5.9.2002 AT 11 A.M AND PROCEEDINGS WERE CLOSED ON 5.9.2002 AT 9.30 PM SHOWN AS TEMPORARILY CONCLUDED. HE SUBMITTED THAT IN CASE OF COPIES OF OTHER PANCHNAMAS I.E. IN RESPECT OF M/S. AGARWAL STONE COMPANY, CERTAIN BOOKS OF A CCOUNT AND LOOSE PAPERS WERE SEIZED. IT WAS ALSO SHOWN IN THE PANCHNAM A THAT CASH OF RS.2,150/- WAS FOUND BUT NOT SEIZED. HE SUBMITS THAT PR OHIBITORY ORDER IN RESPECT OF ONE CUPBOARD KEPT IN THE RESIDENCE OF SHRI SU NIL AGARWAL WAS ISSUED ON 6.9.2002 U/S. 132(3). THEREAFTER, ONE MORE PANCHN AMA WAS DRAWN ON 1.11.2002 (PAGE NO. 58 OF THE P.B-I) AND THE SA ID PANCHNAMA WAS DRAWN ONLY FOR GETTING THE EXTENSION OF TIME LIMIT. HE SU BMITS THAT NOTHING WAS SEIZED AND EVEN THERE IS NO MENTION OF VERIFICATION OF A LLEGED RECORD IN THE SEALED CUPBOARD. NOTHING IS MENTIONED IN THE PANCHNA MA WHETHER PROHIBITORY ORDER PASSED U/S. 132(3) WAS LIFTED. HE, THEREFOR E, PLEADED THAT ON 1.11.2002, NOTHING HAPPENED BUT ON THAT DAY, IT WAS SHOWN AS SEARCH AND SEIZURE WAS FINALLY CONCLUDED. LD COUNSEL RELIED ON TH E FOLLOWING DECISIONS : 1) CIT VS. PLASTICA ENTERPRISES, 180 TAXMAN 293 (BOM.) 2) ACIT, CC 2, JODHPUR VS. SHREERAM LIME PRODUCTSLTD, IT (SS) A. NO.27/JD/2006 DATED 11.6.2012 ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 5 HE PLEADED FOR CANCELLING THE ASSESSMENT ORDERS. PER CO NTRA, THE LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. THE CORE ISSUE IN CONTROVERSY IS WHETHER THE ASSES SMENT ORDERS PASSED IN THE CASE OF THESE ASSESSEES U/S. 158BC (C) O F THE ACT DATED 30 TH NOVEMBER 2004 ARE TIME BARRED BEING BEYOND THE PERIOD OF LIMITATION PROVIDE U/S. 158BE OF THE ACT? PRIOR TO 1.6.2003, THE ASS ESSMENTS FRAMED IN CONSEQUENCE OF SEARCH AND SEIZURE OPERATION, CARRIED O UT U/S. 132(1) WERE GOVERNED UNDER CHAPTER XIV-A OF THE ACT. THE TIM E LIMIT IS PRESCRIBED FOR COMPLETION OF THE BLOCK ASSESSMENT AS PER CLAUSE (A) AN D CLAUSE (B) TO SEC. 158BE(1) OF THE ACT. SO FAR AS THE PRESENT CASES A RE CONCERNED, CLAUSE (B) TO SUB-SECTION OF SEC. 158BE IS APPLICABLE. AS PER THE SAID CLAUSE, THE A.O HAS TO PASS THE ASSESSMENT ORDERS U/S. 158BC WITHIN 2 YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORIZ ATION FOR SEARCH U/S. 132 WAS EXECUTED. IN THE PRESENT CASE, AS PER THE COPIES OF THE PANCHN AMA PLACED BEFORE US, WARRANT OF AUTHORIZATION AGAINST THE ASS ESSEE WAS DATED 4.9.2002 WHICH WAS EXECUTED ON 5.9.2002. AS PER THE PAN CHNAMAS DATED 5.9.2006 AND 6.9.2006, THE SEARCH WAS SHOWN TEMPORARILY CONCLUDED. THE SEARCH PARTY ISSUED THE PROHIBITORY ORDER U/S. 132(3) OF T HE ACT ON 06.09.02 IN RESPECT OF A CUPBOARD IN THE RESIDENTIAL PREMISES OF ON E OF THE ASSESSEES I.E. SUNIL AGARWAL. IT IS MENTIONED IN THE PROHIBITORY ORDER THAT LOOSE PAPERS, NOTE BOOKS, FILES ETC., KEPT IN THE CUPBOARD IN THE BEDROOM OF SHRI SUNIL AGARWAL ON 3 RD FLOOR (PAGE NO. 60 OF THE PAPER BOOK). ON 1.11.2002, AS PER PANCHNAMA OF THE SAME DATE (COPY PLACED AT PA GE NO. 58 OF THE PAPER BOOK), IT WAS SHOWN THAT THE SEARCH COMMENCED ON 1.11.2002 AT 8.30 A.M. AND THE PROCEEDINGS WERE CONCLUDED ON SAME DATE AT 10.10. AS PER COLUMN (8) OF THE PANCHNAMA, IT IS SHOWN AS FINALLY CONCLUDED. AS PER THE ADMITTED POSITION, THERE WAS NO ANOTHER WARRANT OF AUTHORIZATIO N IN THE CASE OF ALL THE THREE ASSESSEES. AS PER COLUMN 5, THE DETAILS O F THE DOCUMENTS ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 6 SEIZED ARE TO BE MENTIONED. IF THE PROHIBITORY ORDER WA S LIFTED ON 1.11.2002, THEN THE SEARCH OFFICIALS SHOULD HAVE MENTIONED IN THE PANCHNAMA WHICH DOCUMENTS THEY HAVE SEIZED, WHICH DOC UMENT THEY HAVE SEIZED AND WHICH WERE ALLEGEDLY KEPT IN THE CUPBOARD IN THE RESIDENCE OF SHRI SUNIL AGARWAL. COL. NO.5 IS BLANK THOUGH IT IS SHOWN THAT ON 1.11.2002, SOME ACTION WAS TAKEN IN CONTINUATION OF THE EXE CUTION OF THE FIRST WARRANT OF AUTHORIZATION AND PROHIBITORY ORDER ISSUED SHOWING SOME DOCUMENTS IN SAID CUPBOARD. 6. NOW THE QUESTION BEFORE US, CAN THE SECOND SO-CALLED P ANCHNAMA GIVES THE BENEFIT TO THE A.O. FOR THE FURTHER PERIOD OF 2 M ONTHS WHEN ADMITTEDLY AS PER CLAUSE (B) TO SECTION 158(1) THE A.O WAS UNDER STATUTORY OBLIGATION TO PASS THE ASSESSMENT ORDER ON OR BEFORE 30 TH SEPTEMBER 2004. 7. IDENTICAL SITUATION HAS BEEN CONSIDERED BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF M/S. PLASTICA ENTERPRISES (SUPRA). IT IS WORTH TO REPRODUCE HERE THE RELEVANT PARAGRAPHS FROM THE SAID JUDGMENT : 2. THE LEARNED COUNSEL FOR THE RESPONDENT PRODUCED BEFORE US THE XEROX COPY OF THE PANCHANAMA DATED 5 TH AUGUST, 2000, WHICH CATEGORICALLY MENTIONS THAT THE STOCK VALUED AT RS.1,61 ,55,035/- WAS SEIZED ON THAT DAY. IT APPEARS THAT THE DEPARTMENT IS SEEKING TO RELY ON THE SUBSEQUENT PANCHANAMA DATED 20 TH SEPTEMBER, 2000 WHICH ONLY MENTIONS THAT THE INVENTORY OF STOCK VALUED AT RS.1,6 1,55,035/- AS PER THE INVENTORY MADE ON 4/5 TH AUGUST, 2000. IN FACT, ON 20 TH SEPTEMBER, 2000 NOTHING HAS BEEN DONE BY THE REVENUE . THE REVENUE HAS MERELY INSPECTED THE PREMISES AND FOUND THE SEA L TO BE IN-TACT. PARAGRAPH NO. 2 OF THE SAID PANACHANAMA DATED 20 TH SEPTEMBER, 2000 MENTIONS THAT, 2. AS TODAYS SEARCH WAS IN CONTINUANCE OF THE PROC EEDINGS ON 31 ST AUGUST, 2000, WE ALONG WITH THE AFORESAID AUTHORIZED OFFICERS BEFORE THE COMMENCEMENT OF PROCEEDING TODA Y, INSPECTED ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 7 THE SEALS WHICH HAD BEEN PLACED ON THAT DATE AND FOU ND THEM TO BE INTACT/TAMPERED WITH AS NARRATED IN THE ENCLOSURES. ANNEXURE-2 OF THE SAID PANCHANAMA DATED 20 TH SEPTEMBER, 2008 MENTIONS THAT; STOCK VALUED AT RS.1,61,55,035/- (RUPEES ONE CRORE SIXTY ONE LAKHS, FIFTY FIVE THOUSAND AND THIRTY FIVE) AS PER I NVENTORY MADE ON 4/5.08.2000. 3. IT IS APPARENT THAT THE PANCHANAMA DATED 20 TH SEPTEMBER, 2000 AND THE VISIT OF THE REVENUE TO THE PREMISES APPEARS TO HAVE BEEN MADE ONLY TO GET OVER THE LIMITATION ISSUE. 8. IN THE CASE OF M/S. SHREE RAM LIME PRODUCTS LTD., (SUP RA), THE ASSESSEE CONTENDED THAT THE LAST PANCHNAMA DATED 31 .1.2003 IS NOT A VALID PANCHNAMA IN THE EYES OF LAW AS SAME HAD BEEN EXECUTED FOR THE PURPOSE OF REVOCATION OF THE ORDER PASSED U/S. 132(3) OF THE ACT. AFT ER EXAMINING THE RELEVANT PANCHNAMA, THE HONBLE SPECIAL BENCH OF THE TR IBUNAL HAS HELD AS UNDER : 27. THEREFORE, TO DETERMINE THE REAL NATURE OF PANCHN AMA DRAWN ON 31.1.2003 IT WILL BE NECESSARY TO GO INTO THE FACTS RE CORDED IN THE SAID PANCHNAMA. A COPY OF THE SAID PANCHNAMA HAS BEEN P LACED ON RECORD BY BOTH THE PARTIES AND REFERENCE CAN BE MADE TO PA GES 38-40 OF PAPER BOOK FILED BY LD AR OF THE ASSESSEE. IT IS OBSERVED FROM THE SAID PANCHNAMA THAT SHRI S.S. MANTRI, DIT (INV.I), JODHPUR IS THE AUTHORIZED OFFICER WHO WAS ASSISTED BY SHRI PN MATHEW, INSPECT OR, SHRI RL RATHI, INSPECTOR AND SHRI PAWAN KUMAR, STAFF CAR DRIVER. IT STARTED AT 5.50 P.M. AND IT IS IN RESPECT OF AUTHORIZATION DATED 17 TH DECEMBER, 2002. IT IS MENTIONED THAT THE SEARCH WAS IN CONTINUATION OF THE PROCEEDINGS ON 21 ST DECEMBER, 2002 AND THE SEARCH PARTY HAD INSPECTED THE SEAL WHICH WERE PLACED ON 21 ST DECEMBER, 2002 AND IT WAS FOUND THAT THE SEALS WERE INTACT AS NARRATED IN THE ORDER PASSED U/ S 132(3) DATED 3.1.2003. IN THE COLUMN RELATING TO ASSETS OR DOCUMEN TS SEIZED, ALL THE COLUMNS ARE FILLED AS NIL. NO STATEMENT OF ANY PERSON W AS RECORDED ON THAT DATE. IT IS MENTIONED THAT ON 3.1.2003, THE PROC EEDINGS WERE STARTED AT 5.50 PM AND THE PROCEEDINGS WERE CLOSED ON 3.1.2003 AT ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 8 6.20 PM AND ALL OTHER COLUMNS ARE NIL. THE PERUSAL OF TH E PANCHNAMA WILL REVEAL THAT EXCEPT FROM PASSING THE REVOCATION OR DER U/S 132(3) OF THE PROHIBITORY ORDER PASSED ON 21 ST DECEMBER, 2002 NO OTHER ACTIVITY HAD TAKEN PLACE. THEREFORE, FROM THE PERUSAL OF THE P ANCHNAMA IT IS CLEAR THAT THERE WAS NO CONCLUSION OF SEARCH. WHATEVE R MATERIAL WAS REQUIRED TO BE SEIZED OR IMPOUNDED WAS ALREADY SEIZE D/IMPOUNDED BY THE DEPARTMENT. THE PROCEEDINGS ON 3.1.2003 ARE ONLY A FORMALITY COMPLETED WITHIN A VERY SHORT SPAN OF TIME AND WAS ON LY TO LIFT THE PROHIBITORY ORDER. THE SAME WAS THE FACTUAL CONDITION IN THE CASE OF WHITE & WHITE MINERALS PVT. LTD. (SUPRA). THE SEARCH ITS ELF IN THE PRESENT CASE WAS COMPLETED ON 21 ST DECEMBER, 2002. THE DETAILS OF PROCEEDINGS HAPPENED ON 03.01.2003 AND ALREADY DESCRIB ED IN THE DETAILS SUBMITTED BY THE LD AR WHICH HAVE BEEN REPROD UCED ABOVE. THE ABOVE CONCLUSION IS ALSO SUPPORTED BY THE DECISIO N OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V., SK KATYAL (SUPRA) WH ICH WAS LATER ON FOLLOWED BY HONBLE DELHI HIGH COURT IN THE CASE OF CI T V,. D.D. AXLES PVT. LTD. REPORTED AT 323 ITR 558 WHEREIN A SEARCH W AS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 29 TH AUGUST, 1996 WHICH WAS CONCLUDED ON 30 TH AUGUST, 1996. A PANCHNAMA WAS DRAWN ON 29 TH AUGUST, 1996 WHEN BOOKS OF ACCOUNTS AND OTHER DOCUM ENTS WERE SEIZED AND ON THE SAME DAY A RESTRAIN ORDER WAS ALSO PASSED WITH REGARD TO AN ALMIRAH THAT HAS BEEN SEIZED. THE RESTR AIN ORDER WAS EXTENDED TILL 18 TH NOVEMBER, 1996 ON WHICH DATE A PANCHNAMA WAS DRAWN AND NOTHING WAS SEIZED FROM THE PREMISES OF T HE ASSESSEE. ON 18 TH NOVEMBER, 1996 BY AN ORDER, THE RESTRAIN PLACED ON THE ALMIRAH WAS VACATED. THE ASSESSMENT WAS PASSED ON 28 TH NOVEMBER, 1997 AND ON THESE FACTS IT WAS HELD THAT THE SEARCH IN ITSE LF WAS COMPLETED ON 30 TH AUGUST, 1996 AND TILL 18 TH NOVEMBER, 1996 WHEN LAST PANCHNAMA WAS DRAWN AND THE RESTRAIN ORDER WAS VACAT ED, NOTHING ELSE WAS FOUND, AND, IN FACT, NO FURTHER SEARCH WAS CO NDUCTED. THEREFORE, THE LAST PANCHNAMA DATED 18.11.1996 WAS ME RELY A RELEASE ORDER AND COULD NOT EXTEND THE PERIOD OF LIMITED. 28. THE ABOVE PROPOSITION OF LAW HAS ALSO BEEN LAID DOW N BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF C. RAMAIAH REDDY (SUPRA), UPON WHICH LD. AR HAS PLACED RELIANCE. WHILE INTERPRETING THE WORD PANCHNAMA, THEIR LORDSHIPS IN PARA 48 HAVE OBSERVED THAT THE PANCHNAMA WHICH IS MENTIONED IN EXPLANATION 2 (A) TO SECTION 158BE IS A PANCHNAMA WHICH AUTHORIZE A C ONCLUSION OF THE ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 9 SEARCH. CLEARLY, IF A PANCHDNAMA DOES NOT, FROM THE FA CTS RECORDED THEREIN, REVEAL THAT A SEARCH WAS CARRIED OUT AT ALL ON THE DAY WHICH IT RELATES, THEN, IT WOULD NOT BE A PANCHNAMA RELATING TO SEARCH AND, CONSEQUENTLY, IT WOULD NOT BE A PANCHNAMA OF THE TYPE WHICH FINDS MENTION IN EXPLANATION 2(A) TO SECTION 158BE. 29. IN VIEW OF ABOVE DISCUSSION, WE HOLD THAT IN THE P RESENT CASE PANCHNAMA DATED 3.1.2003 IS NOT A PANCHNAMA WHICH FI NDS MENTIONED IN EXPLANATION 2 TO SECTION 158BE. HENCE, THE LIMITATI ON CANNOT BE GOVERNED BY THE SAID PANCHNAMA. THE SEARCH ESSENTIA LLY WAS CONCLUDED AND COMPLETED VIDE PANCHNAMA DATED 21 ST DECEMBER, 2002, WHEN ORDER UNDER THE SECOND PROVISO TO SECTION 132 (1) WAS PASSED DEEMED SEIZURE OF STOCK OF GOODS OF RS. 25,43,500/-; STA TEMENT OF ONE PERSON WAS RECORDED AND A RESTRAIN ORDER U/S 132 WA S PASSED. PANCHNAMA DATED 21 ST DECEMBER, 2002 WAS THE LAST PANCHNAMA AS DESCRIBED IN EXPLANATION 2 TO SECTION 158BE AND, THE REFORE, THE LIMITATION HAS TO BE COMMENCED FROM THE SAID PANCHNA MA. IT IS AN UNDISPUTED POSITION THAT IF PANCHNAMA DATED 21 ST DECEMBER, 2002 IS CONSIDERED AS LAST PANCHNAMA THEN THE TIME LIMIT OF FR AME ASSESSMENT U/S 158BC WILL BE 31 ST DECEMBER, 2004. AS AGAINST THAT, THE IMPUGNED ASSESSMENT IS PASSED ON 31.1.2005 WHICH IS NOT PASSED WITHIN THE LIMITATION DESCRIBED IN SECTION 158BE. THE ASSESSMEN T, THEREFORE, IS BAD IN LAW AND HAS TO BE QUASHED. 9. CONSIDERING THE FACTS OF THE ASSESSEES CASE, MORE PA RTICULARLY AFTER CAREFULLY EXAMINING THE LAST PANCHNAMA DATED 1.11.2002, IN T HE BACKDROPS OF LEGAL PRINCIPLES LAID DOWN IN THE ABOVE TWO DECISIONS, WE HA VE TO HOLD THAT THE PANCHNAMA DATED 1.11.2002 CANNOT GIVE EXTENDED T IME TO THE A.O FOR FURTHER 2 MONTHS WHEN IN FACT, IN THE CASE OF THESE ASSES SEES, THE SEARCH WAS FINALLY CONCLUDED ON 6.9.2002. WE, THEREFORE, ALLOW THE G ROUND TAKEN BY THE ASSESSEE AND HOLD THAT THE ASSESSMENTS FRAME D BY THE A.O ARE TIME BARRED AND BAD IN LAW. WE, ACCORDINGLY, CANCEL THE ASSES SMENTS FRAMED BY THE A.O U/S. 158 BC(C ) IN CASES OF ALL THE THREE ASSESSEES. ITA . NOS.49,123,124, 330 & 331//PN/2007 SHRI RAMKUMAR B. AGARWAL, SHRI ANIL R. AGARWAL ETC.,, BLOCK A.Y. 1997-98 TO 2003-04 PAGE OF 10 10 10. SO FAR AS THE REVENUES APPEALS ARE CONCERNED, BOTH THE APPEALS DO NOT SURVIVE AS WE HAVE CANCELLED THE ASSESSMENT ORDERS FRAMED BY THE A.O. U/S. 158 BC(C ). 11. IN THE RESULT, ALL THE THREE APPEALS OF ASSESSEES AR E ALLOWED AND BOTH THE APPEALS OF REVENUE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 26TH JUNE 2012. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S. PADVEKAR) JUDICIAL MEMBER PUNE, DATED THE 26TH JUNE, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (CENTRAL), PUNE 4. THE CIT(A)-I, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE -TRUE COPY- BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE