PRAVIN SHANKAR PAKALE, Ratnagiri V. Jt.CIT, Kolhapur

ITA 643/PUN/2006

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1850 (ITAT-PUNE)
• Duration Of Justice: 9 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-05-2016
• Assessment Year: misc
• Appeal Filed On: 29-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Gift; Search and seizure; Period of limitation; Difference of opinion; Block assessment; Time period of passing order
• Section: 132

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM ITA NO.643/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 SHRI PRAVIN SHANKAR PAKALE, H.NO.363/364, KOSHTIWADI, A/P. NIWALI, TAL. CHIPLUN, DIST. RATNAGIRI PAN NO. AKBPP4290Q . / APPELLANT V/S JT.CIT (OSD), CENTRAL CIRCLE, TAKALA, KOLHAPUR . / RESPONDENT ITA NO.618/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 JT.CIT(OSD), CENTRAL CIRCLE, TAKALA KOLHAPUR . / APPELLANT V/S SHRI PRAVIN SHANKAR PAKALE, H.NO.363/364, KOSHTIWADI, A/P. NIWALI, TAL. CHIPLUN, DIST. RATNAGIRI PAN NO. AKBPP4290Q . / RESPONDENT ITA NO.616/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 JT.CIT(OSD), CENTRAL CIRCLE, KOLHAPUR, 1146/E, VIHAR, SYKES EXTENSION, KOLHAPUR . / APPELLANT V/S SHRI SUBHASH SHANKAR PAKALE, A/P. SAVARDE, OPP. POLICE STATION, TA. CHIPLUN, DIST. RATNAGIRI PAN NO. AHDPP2741B . / RESPONDENT 2 PAKALE GROUP ITA NO.641/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 SHRI SUBHASH SHANKAR PAKALE, H.NO.514, MUMBAI-GOA HIGHWAY, A/P. SAVARDE, OPP. POLICE STATION, TAL. CHIPLUN, DIST. RATNAGIRI, PAN NO.AHDPP2741B . / APPELLANT V/S JT.CIT, CENTRAL CIRCLE, TAKALA, KOLHAPUR . / RESPONDENT ITA NO.617/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 JT.CIT(OSD), CENTRAL CIRCLE, KOLHAPUR . / APPELLANT V/S SHRI VILAS SHANKAR PAKALE, 117, BATALEWADI, BEHIND HOTEL VIKRANT, AT KHERSHET, POST. ARAVALI, TAL. CHIPLUN, DIST. RATNAGIRI PAN NO. ACLPP4853F . / RESPONDENT ITA NO.674/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 LATE SHRI VILAS SHANKAR PAKALE THROUGH LEGAL HEIRS PAN NO. ACLPP4853F 1. SWAROOP VILAS PAKALE (SON), AT POST DAHIWADI, TAL. CHIPLUN, DIST. RATNAGIRI. 2. SMT. PRAMILA VILAS PAKALE (WIFE) 3. SMITA VILAS PAKALE (DAUGHTER), (AFTER MARRIAGE MRS. SAKSHI RAKESH KADULKAR) 4. SNEHAL VILAS PAKALE (DAUGHTER) (AFTER MARRIAGE MRS. SNEHAL VIRESH KADULKAR) 5. SONAL VILAS PAKALE (DAUGHTER) . / APPELLANT V/S 3 PAKALE GROUP JT.CIT (OSD), CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT CO. NO.29/PN/2008 (ARISING OUT OF ITA NO.617/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 SHRI VILAS SHANKAR PAKALE, 117, BATALEWADI, BEHIND HOTEL VIKRANT, AT KHERSHET, POST. ARAVALI, TAL. CHIPLUN, DIST. RATNAGIRI PAN NO. ACLPP4853F . / APPELLANT V/S JT.CIT(OSD), CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT ITA NO.649/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 LATE SHRI SATISH SHANKAR PAKALE, THROUGH L/HEIRS 1. SMT. SAMEERA SATISH PAKALE (WIFE), AT DURGAWAD ROAD (COLONY), OPP. MARAI TEMPLE, AP. SAWARDE, TAL. CHIPLUN, DIST. RATNAGIRI 2. SMT. SAMEERA SATISH PAKALE, GUARDIAN OF HARSHAL SATISH PAKALE (MINOR SON) 3. SHARMILA SATISH PAKALE (DAUGHTER), (AFTER MARRIAGE MRS. SHARMILA SANDESH DHUMAL) 4. ANUPREETA SATISH PAKALE (DAUGHTER) (AFTER MARRIAGE MRS. SWARA SACHIN REPAL) . / APPELLANT V/S JT.CIT, CENTRAL CIRCLE, TAKALA, KOLHAPUR . / RESPONDENT ITA NO.656/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 SHRI RAMESH SHANKAR PAKALE, 1301, GIRABELA, NEAR POLICE LINE, A/P. SAWARDE, TAL. CHIPLUN, DIST. RATNAGIRI PAN NO.ABXPP7499Q . / APPELLANT V/S 4 PAKALE GROUP JT.CIT, CENTRAL CIRCLE, TAKALA, KOLHAPUR . / RESPONDENT ITA NO.677/PN/2006 BLOCK PERIOD 1998-99 TO 2004-05 JT.CIT, CENTRAL CIRCLE, TAKALA, KOLHAPUR . / APPELLANT V/S SHRI RAMESH SHANKAR PAKALE, 1301, GIRABELA, NEAR POLICE LINE, A/P. SAWARDE, TAL. CHIPLUN, DIST. RATNAGIRI PAN NO.ABXPP7499Q . / RESPONDENT / ASSESSEE BY : SHRI S.N. PURANIK / REVENUE BY : SHRI S.K. RASTOGI, CIT / ORDER PER R.K. PANDA, AM : THE ABOVE BATCH OF APPEALS FILED BY THE DIFFERENT ASSESSEES AND THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A) KOLHAPUR RELATING THE BLOCK PERIOD 1998-99 TO 2004-05. FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. ALL THESE APPEALS ARE RECALLED MATTERS. EARLIER THE APP EALS OF THE ASSESSEE WERE DISMISSED BY THE TRIBUNAL FOR WANT OF PROSECUTION AND THE APPEALS FILED THE REVENUE WERE ALLOWED. SUBSEQUENT LY, THE TRIBUNAL VIDE ORDER DATED 07-03-2013 RECALLED THE EARLIER ORDERS. HENCE, THESE ARE RECALLED MATTERS. / DATE OF HEARING :11.05.2016 / DATE OF PRONOUNCEMENT:13.05.2016 5 PAKALE GROUP 3. FIRST WE TAKE UP ITA NO.643/PN/2006 FILED BY THE ASSE SSEE & ITA NO.618/PN/2006 FILED BY THE REVENUE AS THE LEAD CASE . FACTS OF THE CASE, IN BRIEF, ARE THAT A SEARCH AND SEIZURE ACTION U /S.132 OF THE I.T. ACT WAS CARRIED OUT IN RESPECT OF PAKALE GROUP OF CA SES OF CHIPLUN, DIST. RATNAGIRI ON 24-04-2003. NOTICE U/S.158BC(C) W AS ISSUED ON 10-11-2003 AND WAS SERVED ON THE ASSESSEE ON 23-11- 2003 REQUIRING THE ASSESSEE TO FURNISH HIS BLOCK ASSESSME NT RETURN WITHIN 45 DAYS FROM THE RECEIPT OF THE NOTICE. THE ASSESSE E FILED HIS BLOCK ASSESSMENT RETURN IN FORM 2B DECLARING UNDISCLOSED INCOME OF RS.1,12,230/-. IT MAY BE PERTINENT TO NOTE HERE THAT TH E ASSESSEE WAS NOT ASSESSED TO INCOME-TAX EARLIER. THE AO NOTED F ROM THE EVIDENCES GATHERED AS A RESULT OF SEARCH ACTION THAT TH EY RELATE TO UNDISCLOSED INVESTMENTS MADE AND EXPENDITURE INCURRED BY THE ASSESSEE AND HIS FAMILY MEMBERS AND RELATIVES. EVIDENCES RELATED TO INCOME ARE NEGLIGIBLE. HE, THEREFORE, PROCEEDED TO DETERMINE THE UNDISCLOSED INCOME OF THE ASSESSEE KEEPING IN MIND THE UND ISCLOSED INVESTMENT/EXPENDITURE. 4. THE AO AFTER CONSIDERING THE VARIOUS SUBMISSIONS FILED BY THE ASSESSEE FROM TIME TO TIME DETERMINED THE UNDISCLOSED INCOME/INVESTMENT OF THE ASSESSEE AT RS.27,61,333/- ON AC COUNT OF THE FOLLOWING : SR. NO. PARTICULARS/NATURE OF U NDISCLOSED INVESTMENT PARA NO. AMOUNT (RS.) 1 UNDISCLOSED INVESTMENT IN STOCK - IN - TRADE 8.1 17,80,224 2 UNDISCLOSED INVESTMENT IN LAND 8.2 1,00,500 3 UNDISCLOSED INVESTMENT IN THE FORM OF CASH 8.3 64,870 4 UNDISCLOSED INVESTMENT IN THE FORM OF GOLD ORNAMENTS 8.4 24 ,30 0 5 UNDISCLOSED INVESTMENT IN PURCHASE OF VEHICLES 8.5 1,05,553 6 UNDISCLOSED INVESTMENT IN THE FORM OF LOANS & ADVANCES 8.6 56,500 7 UNDISCLOSED HOUSEHOLD EXPENDITURE 8.7 1,10,000 8 UNDISCLOSED ASSET IN THE FORM OF BANK BALANCES 8.8 22,572 6 PAKALE GROUP 9 UNDISCLOSED INVESTMENT IN THE FORM OF FDRS 8.9 4,96,794 TOTAL UNDISCLOSED INCOME/INVESTMENT DETERMINED 27,61,313 5. IN APPEAL THE LD.CIT(A) AFTER CONSIDERING THE VARIOUS SUBMISSIONS FILED BY THE ASSESSEE DIRECTED THE AO TO GIVE SET OFF OF AMOUNTS BORROWED BY THE ASSESSEE FROM BANK OF INDIA AN D NILVALI KRISHNI UTPANNA AUDYOGIC SOCIETY LTD. HE ALSO DELETED THE ADDITION ON ACCOUNT OF LOW WITHDRAWAL FOR HOUSEHOLD EXPENSES ON TH E GROUND THAT ASSESSEE WAS HAVING SUBSTANTIAL AGRICULTURAL INCOME. 6. BASED ON SUCH PART RELIEF GIVEN BY THE CIT(A) THE ASSE SSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US WITH THE FOLLO WING GROUNDS : GROUNDS BY ASSESSEE: 1. ASSESSING OFFICER ERRED IN ADDING RS.24,300/- AS UNDI SCLOSED INVESTMENT IN GOLD AND THEREFORE THE ADDITION OF RS.2 4,300/- BE DELETED. 2. ASSESSING OFFICER ERRED IN ADDING RS.1,05,553/- AS UND ISCLOSED INVESTMENT IN PURCHASE OF VEHICLE AND THEREFORE THE A DDITION OF RS.1,05,553/- BE DELETED. 3. ASSESSING OFFICER ERRED IN ADDING RS.56,500/- AS UNDIS CLOSED INVESTMENT IN LOANS/ADVANCES WITHOUT CONSIDERING ITS REC OVERY THEREOF AND THEREFORE THE ADDITION OF RS.56,500/- BE DELETED . 4. ASSESSING OFFICER ERRED IN ADDING INTEREST AS UNDISCLO SED INVESTMENT IN BANK FIXED DEPOSIT AND THEREFORE THE AD DITION BE DELETED. 5. ASSESSING OFFICER ERRED IN ADDING RS.22,572/- AS UNDIS CLOSED INVESTMENT IN BANK BALANCES AND THEREFORE THE ADDITIO N BE DELETED. 6. YOUR PETITIONER CRAVES LEAVE TO ADD, ALTER, AMEND , CLARIFY THE GROUNDS OF APPEAL AS AND WHEN OCCASION DEMANDS. 7. YOUR PETITIONER CRAVES TO LEAVE TO ADDUCE SUCH FUR THER EVIDENCE AS THE OCCASION MAY DEMAND. GROUNDS BY ASSESSEE: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE A.O. TO GIVE SET O FF OF AMOUNTS BORROWED BY THE ASSESSEE FROM BANK OF INDIA AND NIWALI V. KRISHI AUDYOGIK SOCIETY LTD. 7 PAKALE GROUP 2. IN ALLOWING THE ABOVE RELIEF THE CIT(A) HAS NOT C ONSIDERED THE FACT THAT IT HAD BEEN ADMITTED BY THE ASSESSEE IN HIS STATEMEN T RECORDED U/S.132(4) THAT NO BOOKS OF ACCOUNTS HAVE BEEN MAINTAI NED FOR THE PERIOD. 3. IN ALLOWING THE ABOVE RELIEF THE CIT(A) HAS IGNOR ED THE FACT THAT THE ASSESSEE COULD NOT CORRELATE THE AMOUNTS WITHDRAWN F ROM THE LOAN ACCOUNT WITH THE PURCHASE OF KATHA. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF LOW WI THDRAWALS FOR HOUSEHOLD EXPENSES AS THE ASSESSEE WAS STATED TO HAVE SUBSTA NTIAL AGRICULTURAL INCOME. 5. IN ALLOWING THE ABOVE RELIEF, THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RESTOR ED. 6. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR VAR Y ANY OF THE GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 6.1 THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND WHICH REA DS AS UNDER : BLOCK ASSESSMENT FRAMED U/S.158BC(C) DATED 31-05-2005 A RE BAD IN LAW, INFRUCTUOUS. 7. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE ADDIT IONAL GROUND SUBMITTED THAT THE SAID GROUND IS PURELY A LEGAL GROUND AND NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED. RELYING O N THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF NTPC LTD . REPORTED IN 229 ITR 383 AND IN THE CASE OF JUTE CORPORATION OF IND IA LTD. REPORTED IN 187 ITR 688 AND THE DECISION OF HONBLE BOM BAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY COMPANY REPOR TED IN 199 ITR 351 HE SUBMITTED THAT THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE BEING LEGAL IN NATURE SHOULD BE ADMITTED. 8. AFTER CONSIDERING THE ADDITIONAL GROUND RAISED BY THE AS SESSEE BEING LEGAL IN NATURE, THE SAME IS ADMITTED FOR ADJUDICATION. 8 PAKALE GROUP 9. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE SEARCH ACTION STARTED AT THE FACTORY PREMISES OF NIL WALI PALVAN ON 24-04-2003 AND COMPLETED ON 26-04-2003 AS PER PANCHA NAMA DATED 26-04-2003, A COPY OF WHICH IS PLACED AT PAGES 207 AND 208 OF THE PAPER BOOK. REFERRING TO PAGE 208 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO CLA USE 9 ACCORDING TO WHICH PROHIBITORY ORDER U/S.132(3) WAS PASSED . REFERRING TO PAGE 225 OF THE PAPER BOOK HE DREW THE AT TENTION OF THE BENCH TO THE ORDER U/S.132(3) OF THE I.T. ACT ACCORDING TO WHICH THE PROHIBITORY ORDER WAS ISSUED FOR ALL THE UNFINISHED /FINISHED G OODS OF KATH AT GROUND AND IST FLOORS OF THE HOUSE. 10. REFERRING TO THE PANCHANAMA DATED 26-04-2003 IN RE SPECT OF THE ASSESSEE FOR ITS RESIDENTIAL PREMISES HE SUBMITTED THA T THE SEARCH WAS STARTED ON 24-04-2003 AT 8.00 AM AND WERE CLOSED ON 26-04- 2003 AT 4.30 PM. 11. REFERRING TO THE COPY OF THE PANCHANAMA DATED 26-0 5-2003, A COPY OF WHICH IS PLACED AT PAPER BOOK PAGES 320 AND 330 AND ANOTHER COPY AT PAGES 337 AND 338 HE SUBMITTED THAT THE PANCHANAMAS WERE DRAWN IN FURTHERANCE OF PROCEEDINGS HE LD ON 24- 04-2003 TO 26-04-2003 BASICALLY FOR REVOKING THE PROHIBIT ORY ORDER PASSED U/S.132(3) ON 26-04-2003. HE SUBMITTED THAT IN TH ESE PANCHANAMAS NOTHING WAS FOUND OR SEIZED BY THE DEPART MENT ON 26- 05-2003 AND THE SEARCH IS STATED TO BE FINALLY CONCLUDED . NO ACTION WHATSOEVER WAS CARRIED OUT ON THE SAID DATE EXCEPT FO R OPENING OF SEAL AND REVOKING THE ORDER U/S.132(3). HE SUBMITTED THAT ON 26-04- 2003 THE ONLY DIFFERENCE OF OPINION WAS ARRIVED AT COST OF PRODUCTION FOR THE VALUATION OF STOCK. IN VIEW OF THE ABOVE FACTS HE SUBMITTED 9 PAKALE GROUP THAT THE SEARCH WAS CONCLUDED ON 26-04-2003 INCLUDING QUANTIFYING THE INVENTORY AND ACTION OF REVOCATION OF RESTRAINT ORDER U/S.132(3) ON 26-05-2003 AN D AGREEMENT ON COST OF PRODUCTION FOR VALUATION OF STOCK CA NNOT BE CONSIDERED AS CONCLUSION OF SEARCH. HE SUBMITTED THAT TH E PANCHANAMA DATED 26-05-2003 PROVES THE FACT THAT NOT HING WAS SEARCHED OR SEIZED ON THE SECOND VISIT. THERE IS NO JU STIFICATION IN SAYING THAT THE SEARCH WAS CONTINUED FOR VALUATION OF THE STOCK WH ICH COULD HAVE BEEN DONE ON THE VERY DAY OF THE SEARCH. U NDER THESE CIRCUMSTANCES THE BLOCK ASSESSMENT ORDER SHOULD HAVE B EEN PASSED ON OR BEFORE 30-04-2005 BEING WITHIN A PERIOD OF 2 YEARS FROM THE END OF THE MONTH IN WHICH THE SEARCH WAS COMPLETED WHIC H IS APRIL, 2003 IN THE INSTANT CASE. HOWEVER, THE ASSESSMENT ORDE R HAS BEEN PASSED ON 31-05-2005. THEREFORE, THE BLOCK ASSESSMENT ORDER IS BARRED BY LIMITATION. 12. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PLASTIKA ENTERPRISES REPORTED IN 180 TAX MANN 293 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT SEARCH HAVING BEEN COMPLETED ON 05-08-2000 AND P ANCHANAMA SEIZING STOCK PREPARED ON THAT DATE, SUBSEQUENT PANCHA NAMA DATED 20-09-2000 ON WHICH DATE THE AUTHORITIES ONLY INSPECT ED THE SEALS SEEMED TO HAVE BEEN PREPARED ONLY TO GET OVER THE LIM ITATION ISSUE. HENCE, THE APPEAL OF REVENUE AGAINST THE ORDER OF THE TR IBUNAL HOLDING BLOCK ASSESSMENT AS BARRED BY LIMITATION IS NOT MAINTAINABLE. 13. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MRS. SANDHYA P. NAIK REPORTED IN 253 ITR 534 HE 10 PAKALE GROUP SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT ACTION U/S.132(3) OF THE I.T. ACT, 1961 CAN BE RESORT ED TO, ONLY IF THERE IS ANY PRACTICAL DIFFICULTY IN SEIZING THE ITEM WHICH IS LIAB LE TO BE SEIZED. WHEN THERE IS NO SUCH PRACTICAL DIFFICULTY, THE OFFIC ER IS LEFT WITH NO OTHER ALTERNATIVE BUT TO SEIZE THE ITEM, IF HE IS OF THE VIEW THAT IT REPRESENTS UNDISCLOSED INCOME. POWER U/S.132(3) OF THE A CT CANNOT BE EXERCISED SO AS TO CIRCUMVENT THE PROVISIONS OF SECTION 132(3) R.W.S. 132(5) OF THE ACT. THE POSITION HAS BECOME MUC H MORE CLEAR AFTER THE INSERTION OF THE EXPLANATION TO SECTION 13 2(3) EFFECTIVE FROM 01-07-1995 THAT A RESTRAINT ORDER DOES NOT AMOUN T TO SEIZURE. THEREFORE, BY PASSING A RESTRAINT ORDER THE TIME LIMIT AVA ILABLE FOR FRAMING OF THE ORDER CANNOT BE EXTENDED. 14. REFERRING TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF BHARAT SEKHSARIA VS. DCIT REPORTED IN 60 TAXMANN.COM 476 HE SUBMITTED THAT THE TRIBUNAL FOLLOWING TH E DECISION OF HONBLE BOMBAY HIGH COURT AND VARIOUS OTHER D ECISION HAS ANNULLED THE BLOCK ASSESSMENT ORDER WHICH WAS PASSE D AFTER THE PERIOD OF LIMITATION PRESCRIBED UNDER THE ACT. HE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. RAMKUMAR B. AGARWAL AND OTHERS VS. ACIT, CENTRAL CIRCLE-1(1), PUNE ITA NO.49, 127,124,330 AND 331/PN/2007, ORD ER DATED 26-06- 2012 2. CIT VS. RAJHANS AROMATICS REPORTED IN (2011) 336 IT R 0068 3. ACIT VS. SHREE RAM LIME PRODUCTS LTD. REPORTED IN (2012) 22 TAXMANN.COM 122 (JODH.)(SB) 4. SHRI ATUL GULATI VS. DCIT ITA NO.148/DEL/2002 O RDER DATED 09- 12-2014. 11 PAKALE GROUP HE ACCORDINGLY SUBMITTED THAT SINCE IN THE SUBSEQUENT VISIT THERE WAS NO SEARCH OR SEIZURE AND NOTHING WAS FOUND AND ON LY REVOCATION OF PROHIBITORY ORDER U/S.132(3) WAS DONE, THEREFORE, IN VIEW O F THE ABOVE DECISIONS, THE ASSESSMENT ORDER PASSED BY THE AO DATED 31- 05-2005 IS BARRED BY LIMITATION. THEREFORE, THE ADDITIONAL G ROUND RAISED BY THE ASSESSEE SHOULD BE ALLOWED. ONCE THE ADDIT IONAL GROUND IS ALLOWED THE APPEAL FILED BY THE REVENUE BECOMES INFRUCTUOUS. 15. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND SUBMITTED THAT THE ASSESSMENT ORDER HAS BEEN PASSED WITHIN THE STATUTORY TIME AVAILABLE. REFERRING TO THE PROVISIONS OF SEC TION 158BE HE DREW THE ATTENTION OF THE BENCH TO EXPLANATION (2)(A) A ND SUBMITTED THAT THE PERIOD OF 2 YEARS WILL START FROM THE D ATE OF THE LAST PANCHANAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED. REFERRING TO TH E DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF VLS FINANCE LTD. AND ANOTHER VS. CIT REPORTED IN 289 ITR 286 HE SUBMITTED T HAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT A S EARCH U/S.132 OF THE I.T. ACT WILL CONCLUDE ON THE DATE ON WHICH THE LAST PANCHANAMA IS DRAWN. THE TIME LIMIT FOR MAKING OF AN ORDER U/S.158BC R.W.S 158 BE(1) WILL START FROM THE LAST OF PANCHAN AMA. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL MINDA REPORTED IN 328 ITR 320 HE SUBMITTED T HAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT THE PERIOD OF LIMITATION OF 2 YEARS STARTS FROM THE DATE WHEN THE LAST P ANCHANAMA IS DRAWN IN RESPECT OF ANOTHER WARRANT OF AUTHORIZATION, IF MORE THAN ONE WARRANTS OF AUTHORIZATION HAS BEEN ISSUED. 12 PAKALE GROUP 16. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDER SUBM ITTED THAT THE PROVISIONS OF SECTION 129 ARE NOT APPLICABLE TO T HE FACTS OF THE PRESENT CASE. FURTHER, SINCE THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JURISDICTION AL HIGH COURT, THEREFORE, THE SAME WILL PREVAIL. EVEN OTHERWISE ALSO WHEN TW O VIEWS ARE POSSIBLE ON THE SAME ISSUE, THE VIEW WHICH IS IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED. 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE SEARCH ACTION IN THE INSTANT CASE STARTED ON 24-04-200 3 AT THE FACTORY PREMISES OF THE ASSESSEE AS PER THE PANCHANAMA , COPY OF WHICH IS PLACED AT PAGES 207 AND 208 OF THE PAPER BOOK. IT WAS TEMPORARILY CONCLUDED ON 26-04-2003. AS PER CLAUSE 9 O F THE SAID PANCHANAMA PROHIBITORY ORDER U/S.132(3) WAS ALSO PASSED. AS PER COPY OF THE ORDER U/S.132(3) OF THE I.T. ACT, COPY OF WHICH IS PLACED AT PAGE 225 OF THE PAPER BOOK THE ARTICLES ON WHICH THE PR OHIBITORY ORDER WAS PASSED RELATES TO THE UNFINISHED/FINISHED STOCK OF KATH AT THE FACTORY PREMISES. SIMILARLY, THE SEARCH AT THE RESIDEN CE OF THE HOUSE ALSO STARTED ON 24-04-2003 AND FINALLY CONCLUDED O N 26-04- 2003 AS PER THE PANCHANAMA, COPY OF WHICH IS PLACED AT P AGES 227 AND 228 OF THE PAPER BOOK. FROM THE COPY OF THE PANC HANAMA PLACED AT PAGES 329 AND 330 OF THE PAPER BOOK, WE FIND T HE PROCEEDINGS WERE CLOSED AT THE FACTORY PREMISES ON 26-0 5-2003. IT IS ALSO CLEAR FROM THE SAID PANCHANAMAS THAT EXCEPT FOR OPE NING OF SEAL AND REVOKING OF ORDER U/S.132(3) NO OTHER ACTION WHATSOEV ER WAS CARRIED OUT ON THE SAID DATE. FROM THE DETAILS FURNISHED BY THE 13 PAKALE GROUP ASSESSEE IN THE PAPER BOOK, COPY OF WHICH IS PLACED AT PA GE 321 OF THE PAPER BOOK WE FIND NO NEW ASSETS WERE FOUND ON THA T DATE AND THE VALUATION OF STOCK WAS ONLY FINALIZED ON 27-05-2003. UNDER THESE CIRCUMSTANCES WE HAVE TO SEE THE PERIOD OF LIMITATIO N FOR COMPLETION OF THE BLOCK ASSESSMENT PROCEEDINGS. 18. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE TH AT SINCE NO NEW ASSETS WERE FOUND ON 27-05-2003 AND THE PANCHANA MA WAS DRAWN ONLY FOR THE PURPOSE OF LIFTING THE PROHIBITORY ORDER PASSED U/S.132(3), THEREFORE, THE SEARCH HAS CONCLUDED ON 26-04-2003 AND THEREFORE THE BLOCK ASSESSMENT ORDER S HOULD HAVE BEEN PASSED WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE RELEVANT MONTH IN WHICH THE SEARCH WAS COMPLETED. THEREFORE, THE ASSESSMENT ORDER OUGHT TO HAVE BEEN PASSED IN THE INS TANT CASE ON OR BEFORE 30-04-2005. HOWEVER, SINCE THE AO HAS PASSE D THE BLOCK ASSESSMENT ORDER ON 31-05-2005, THEREFORE, THE BLOCK AS SESSMENT ORDER PASSED BY THE AO IS BARRED BY LIMITATION. 19. IT IS THE CASE OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE PERIOD OF LIMITATION OF TWO YEARS STARTS FROM THE END OF THE DATE WHEN THE LAST PANCHANAMA IS DRAWN IN RESPECT OF ANY WARRANT OF AUTHORIZATION IF THERE ARE MORE THAN ONE WARRANTS OF AUT HORIZATION. SINCE IN THE INSTANT CASE THE LAST PANCHANAMA WAS DRAWN ON 27-05-2003, THEREFORE, THE LIMITATION PERIOD ENDS ON 31-05- 2005. SINCE THE ORDER HAS BEEN PASSED BY THE AO ON 31-05-2 005, THEREFORE, THE SAME IS NOT BARRED BY LIMITATION. 20. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE HONB LE BOMBAY HIGH COURT IN THE CASE OF PLASTIKA ENTERPRISES (SUP RA). IN 14 PAKALE GROUP THAT CASE THE PANCHANAMA DATED 05-08-2000 CATEGORICA LLY MENTIONS THAT THE STOCK VALUED AT RS.1,61,55,035/- WAS SEIZED ON T HAT DATE. THE DEPARTMENT RELIED ON THE SUBSEQUENT PANCHANAMA DA TED 20 TH SEPTEMBER 2000 WHICH ONLY MENTIONS THAT THE INVENTORY OF STOCK VALUED AT RS.1,61,55,035/- AS PER THE INVENTORY MADE ON 4 TH /5 TH AUGUST, 2000. ON 20-09-2000 NOTHING HAS BEEN DONE BY THE REVENUE AND THEY MERELY INSPECTED THE PREMISES AND FOU ND THE SEAL TO BE INTACT. UNDER THESE CIRCUMSTANCES THE HONBLE HIG H COURT UPHELD THE DECISION OF THE TRIBUNAL IN HOLDING THAT THE ASSE SSMENT COMPLETED BY THE AO WAS BARRED BY LIMITATION AND THE LAST PANCHANAMA DRAWN ON 20-08-2000 CANNOT BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF CALCULATION OF TIME LIMIT U/S.158BE FOR COMPLETIO N OF ASSESSMENT. 21. WE FIND THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE O F BHARAT SEKHSARIA (SUPRA) HAS HELD AS UNDER : 9. IN ORDER TO APPRECIATE THE RIVAL STANDS IT WOULD BE APPROPRIATE TO BRIEFLY TOUCH UPON THE LEGAL POSITION ON THE SUBJECT, MORE PRECISELY TO UNDERSTAND THE MEANING AND IMPORT OF THE EXPRESSION 'L AST PANCHNAMA' USED IN CLAUSE (A) OF EXPLANATION 2 BELOW SECTION 158 BE(1) OF THE ACT. ON THE SAID SUBJECT, THE LEARNED REPRESENTATIVE FOR TH E ASSESSEE RELIED UPON THE JUDGMENT OF THE HON'B1E DELHI HIGH COURT, IN THE CASE OF CIT VS. S.K. KATYAL [2009] 308 ITR 168/177 TAXMAN 380 TO JUSTIFY THAT PANCHNAMA DATED 6.2.1998 WAS NOT A PANCHNAMA RELEVAN T TO DECIDE THE CONCLUSION OF SEARCH FOR THE PURPOSES OF SECTION 158BE(1 ) OF THE ACT. IN THE CASE BEFORE THE HON'BLE DELHI HIGH COURT, THE ISSU E RELATED TO THE LIMITATION FOR FRAMING A BLOCK ASSESSMENT IN TERMS OF SEC TION 158BE OF THE ACT. THE REVENUE SOUGHT TO JUSTIFY THE PERIOD OF LIMITATION ON THE BASIS OF A PANCHNAMA WHICH WAS SAID TO BE THE 'LAST PANC HNAMA' WHICH CONCLUDED THE SEARCH. THE ASSESSEE ASSAILED THE SAID POSITIO N ON THE GROUND THAT SUCH 'LAST PANCHNAMA' DID NOT CONCLUDE TH E SEARCH, AS NO SEARCH WAS CARRIED OUT ON THE RELEVANT DAY, AND, RATH ER ONLY THE RESTRAINT ORDER PASSED ON AN EARLIER DATE U/S.132(3) OF THE ACT WAS MERELY REVOKED. IN THIS BACKGROUND, THE HON'BLE HIGH COURT CONSIDERED THE RELEVANT LEGAL POSITION AND HELD AS UNDER:- 'THESE PROVISIONS DEMONSTRATE THAT A SEARCH AND SEIZURE UNDER THE SAID ACT HAS TO BE CARRIED OUT IN THE PRESENCE OF AT LEAST TWO RESPECTABLE INHABITANTS OF THE LOCALITY WHERE THE SEAR CH AND 15 PAKALE GROUP SEIZURE IS CONDUCTED. THESE RESPECTABLE INHABITANTS ARE WITNESSES TO THE SEARCH AND SEIZURE AND ARE KNOWN AS 'PANCHAS'. THE DOCUMENTATION OF WHAT THEY WITNESS IS KNOWN AS PANCHNAM A. THE WORD 'NAMA', REFER TO A WRITTEN DOCUMENT. ITS TYPE I S USUALLY DETERMINED BY THE WORD WHICH IS COMBINED WITH IT AS A SUFFIX. EXAMPLES BEING, NIKAH-NAMA (THE WRITTEN MUSLIM MARRIA GE CONTRACT), HIBA - NAMA (GIFT DEED, THE WORD HIBA ME ANING - GIFT), WASIYAT NAMA (WRITTEN WILL) AND SO ON. SO A PANCHNAM A IS A WRITTEN RECORD OF WHAT THE PANCH HAS WITNESSED. IN MOH AN LAL V. EMPEROR: AIR 1941 BOMBAY 149 IT IS OBSERVED THAT 'TH E PANCHNAMA IS MERELY A RECORD OF WHAT A PANCH SEES. 'SI MILARLY, THE GUJARAT HIGH COURT IN THE CASE OF VALIBHAI OMAR JI V. THE STATE: AIR 1963 GUJ 145 NOTED THAT 'A PANCHNAMA IS ESSENTIALL Y A DOCUMENT RECORDING CERTAIN THINGS WHICH OCCUR IN THE PRESENCE OF PANCHAS AND WHICH ARE SEEN AND HEARD BY THEM.' AGAIN IN THE STATE OF MAHARASHTRA V. KACHARASDAS D. BHALGAR: (1978) 80 BOM LR 396, A PANCHNAMA WAS STATED TO BE 'A MEMORANDUM OF WHAT HAPPENS IN THE PRESENCE OF THE PANCHAS AS SEEN BY THEM AND OF WHAT THEY HEAR'. WE HAVE EXAMINED THE MEANING OF THE WORD PANCHNAMA IN SOME DETAIL BECAUSE IT IS USED IN EXPLANATION 2(A) TO SECTI ON 158BE OF THE SAID ACT ALTHOUGH IT HAS NOT BEEN DEFINED IN THE ACT. A PANCHNAMA, AS WE HAVE SEEN IS NOTHING BUT A DOCUMENT RECORDING WHAT HAS HAPPENED IN THE PRESENCE OF THE WITNESSES (PANC HAS). A PANCHNAMA MAY DOCUMENT THE SEARCH PROCEEDINGS, WITH OR WITHOUT ANY SEIZURE. A PANCHNAMA MAY ALSO DOCUMENT TH E RETURN OF THE SEIZED ARTICLES OR THE REMOVAL OF SEALS. BUT, TH E PANCHNAMA THAT IS MENTIONED IN EXPLANATION 2(A) TO SECTION 158 BE IS A PANCHNAMA WHICH DOCUMENTS THE CONCLUSION OF A SEARCH. CLEARLY, IF A PANCHNAMA DOES NOT FROM THE FACTS RECORDED THERE IN, REVEAL THAT A SEARCH WAS AT ALL CARRIED OUT ON THE DAY TO WH ICH IT RELATES, THEN IT WOULD NOT BE A PANCHNAMA RELATING TO A SEARC H AND, CONSEQUENTLY, IT WOULD NOT BE A PANCHNAMA OF THE TYP E WHICH FINDS MENTION IN THE SAID EXPLANATION 2(A) TO SECTION 158BE. THIS DISCUSSION LEADS US TO THE QUESTION - WAS THE PANCHNAM A OF 3.1.2001 OF THE TYPE MENTIONED IN THE SAID EXPLANATION 2 (A) ? FROM THE FACTS NARRATED ABOVE, IT IS CLEAR THAT THE PANCHNAMA OF 3.1.2001 ITSELF REVEALS THAT NOTHING WAS SEIZED ON THAT DATE. NOR WAS ANYTHING 'FOUND' ON THAT DATE. IN FACT, NO SEARCH WAS CONDUCTED. THE JEWELLERY THAT WAS PUT IN THE CASH BOX OF THE ALMIRAH HAD ALREADY BEEN SEARCHED, FOUND, INVENTORI ED AND VALUED BY THE DVO ON 17.11.2000 ITSELF. NOTHING REMA INED TO BE SEARCHED THEREAFTER. AND, IN FACT, NO FURTHER SEARCH WAS CONDUCTED AFTER 17.11.2000. OBVIOUSLY, NOTHING ELSE C OULD BE FOUND. ALL THAT WAS DONE ON 3.1.2001, IN THE PRESENCE OF THE WITNESSES (PANCHAS), WAS THAT THE SEALS WERE REMOVED FROM THE CASH BOX AND THE ALMIRAH AND THE KEYS WERE HANDED BA CK 0 THE ASSESSEE. ESSENTIALLY, THE REVOCATION OF THE RESTRAINT OR DER WAS GIVEN EFFECT TO. THIS IS EXACTLY WHAT THE TRIBUNAL FO UND AS A FACT AND MEANT WHEN IT CONCLUDED THAT THE PANCHNAMA DATE D 3.1.2001 WAS MERELY A RELEASE ORDER AND COULD NOT EXT END THE PERIOD OF LIMITATION.' 16 PAKALE GROUP 10. THE AFORESAID DISCUSSION BY THE HON. DELHI HIGH COURT I S A POINTER THAT THE PANCHNAMA OF THE TYPE MENTIONED IN THE EXPLANATION 2( A) TO SECTION 158 BE WOULD NOT INCLUDE WITHIN ITS FOLD A PANCHNAMA WHICH MERELY REVOKES AN EARLIER PLACED REST RAINT ORDER U/S.132(3) OF THE ACT, ESPECIALLY WHEN ON SUCH DATE, N O SEARCH WAS CARRIED OUT. THE AFORESAID LEGAL POSITION HAS BEEN FUR THER AFFIRMED BY HON. DELHI HIGH COURT IN A LATER JUDGMENT IN CIT V. RAJHANS AROMATICS [2011] 336 ITR 68/[2010] 187 TAXMAN 260 . TO THE SIMILAR EFFECT IS ALSO THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN TH E CASE OF CIT V. SANDHYA P. NAIK [2002] 253 ITR 534/124 TAXMAN 384 . 11. IN LIGHT OF THE AFORESAID DISCUSSION, WE MAY NOW EXAMIN E THE SEQUENCE OF EVENTS IN THE PRESENT CASE IN ORDER TO DETE RMINE WHETHER OR NOT THE PANCHNAMA OF 6.2.1998 IS OF THE TYPE MENT IONED IN THE EXPLANATION 2(A) TO SECTION 158BE(1) OF THE ACT. FR OM THE FACT SITUATION NOTED BY US IN THE EARLIER PARAGRAPHS, IT IS CLEAR THAT THE PANCHNAMA OF 6.2.1998 DOES NOT REVEAL THAT ANYTHING WAS SEIZED ON THAT DATE. IT ALSO REVEALS THAT NOTHING WAS FOUND ON T HAT DATE. IN FACT, THE ONLY EVENT THAT TOOK PLACE ON 06.02.1998 WAS REV OKING OF THE EARLIER PLACED RESTRAINT ORDER RELATING TO SHARE CERT IFICATES, TRANSFER DEEDS AND OTHER PAPERS KEPT IN THE WOODEN CABINET IN ROTUNDA BUILDING, WHICH HAD ALREADY BEEN SEARCHED, FOUND AND INVENTORIZED AT THE TIME OF DRAWING UP OF THE PANCHNAMA DATED L3 .1.1998. OSTENSIBLY, NO FURTHER SEARCH WAS CONDUCTED AFTER 13.1. 1998 IN THE ROTUNDA BUILDING, AND ALL THAT WAS DONE ON 6.2.1998 WAS THAT THE PROHIBITORY ORDER PASSED U/S.132(3) ON THE ACT ON L3. 1.1998 WAS VACATED. FACTUALLY SPEAKING, THE AFORESAID POSITION IS NOT IN DISPUTE. THESE CIRCUMSTANCES SHOWS THAT NO SEARCH WAS CARRIED OUT O N 6.2.1998, THEREFORE IT HAS TO BE UNDERSTOOD THAT THE PANCHNAMA DATED 6.2.1998 WOULD NOT REFLECT THE CONCLUSION OF SEARCH O R EXECUTION OF THE 'LAST OF THE AUTHORIZATIONS FOR SEARCH' DATED 8.12 .1997 WITHIN THE MEANING OF SECTION 158BE(1) OF THE ACT. IN FACT, IN THE PANCHNAMA DATED 13.1.1998, THOUGH IT IS MENTIONED THAT THE SEAR CH HAS BEEN ' . . . . . . . . TEMPORARILY CONCLUDED FOR THE DAY TO BE C OMMENCED . . . . . SUBSEQUENTLY, BUT THE SAME DOES NOT MAKE ANY DIFFERENCE BECAUSE FACTUALLY SPEAKING, NO FURTHER SEARCH WAS CONDUCTED AF TER 13.1.1998 AT THE ROTUNDA BUILDING THEREFORE, IT IS THE PANCHNA MA OF 13 .1.1998 WHICH IS RELATABLE TO THE CONCLUSION OF SEARCH AT THE ROTUNDA BUILDING AND NOT THE PANCHNAMA OF 6.2.1998. IN VIEW OF THE A FORESAID DISCUSSION, IT HAS TO BE INFERRED THAT THE PANCHNAMA OF 6.2.1998 CANNOT BE UNDERSTOOD AS A PANCHNAMA OF TYPE MENTIONED IN EXPLANATION 2(A) TO SECTION 158BE(1) OF THE ACT. A N ATURAL COLLORARY OF THE AFORESAID IS THAT THE PERIOD OF LIMITATION PRE SCRIBED IN SECTION 15 8BE(L) OF THE ACT FOR PASSING THE BLOCK ASSESSMENT ORD ER U/S. 158BC OF THE ACT IN THE PRESENT CASE CANNOT BE COMPU TED BY CONSIDERING THE PANCHNAMA OF 6.2.1998 AS EXECUTION O F THE LAST OF THE AUTHORIZATIONS FOR SEARCH INITIATED BY THE AUTHORIZAT ION U/S 132 DATED 8.12.1997. 12. APART FROM THE AFORESAID PROCEEDINGS, SEARCH OPERATION S WERE ALSO CARRIED OUT AT TWO OTHER PREMISES I.E. AT SONAWAL A BUILDING AND AT KRISHNA NIWAS. THE SEARCH OPERATIONS AT THESE PREMISES CAME TO AN END ON 16.1.1998 AND 8.1.1998 RESPECTIVELY AS IS RE VEALED BY THE PANCHNAMA'S ON RECORD. IN ANY CASE, ON THESE ASPECTS, THERE IS NO DISPUTE BETWEEN THE ASSESSEE AND THE REVENUE. THEREFORE , IT HAS TO BE HELD THAT THE LAST DAY WHEN THE AUTHORIZATION OF SEARCH DATED 8.12.1997 WAS FINALLY EXECUTED/CONCLUDED IS 16.1.1998 FOR THE 17 PAKALE GROUP PURPOSE OF SECTION 158BE(1)(B) OF THE ACT. CONSIDERED IN THE SAID LIGHT, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER O N 23.2.2000 IS BEYOND THE PERIOD OF LIMITATION PRESCRIB ED IN SECTION 158BE(1)(B) OF THE ACT. AS A CONSEQUENCE THE ASSESSMENT O RDER DATED 23.2.2000 IS UNTENABLE IN THE EYES OF THE LAW A ND IT IS HEREBY QUASHED. THUS, ASSESSEE SUCCEEDS IN ITS GROUND OF APPEAL NO. 3. 22. SINCE IN THE INSTANT CASE AS MENTIONED EARLIER, NO NEW ASSETS WERE FOUND ON THE DATE OF LAST PANCHANAMA DRAWN ON 26 -05-2003 AND IT WAS ONLY FOR THE PURPOSE OF LIFTING THE PROHIBITORY OR DER PASSED U/S.132(3) FOR THE KATH, THEREFORE, THE PERIOD OF LIMITATION OF TWO YEARS COMPLETED ON 30-04-2005 AND THE ORDER SHOULD HA VE BEEN PASSED ON OR BEFORE THAT DATE. HOWEVER, THE AO IN THE INSTANT CASE HAS PASSED THE BLOCK ASSESSMENT ORDER ON 31-05-2005. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS CITED (SUPRA) WE HO LD THAT THE ASSESSMENT ORDER PASSED BY THE AO IN THE INSTANT CASE ON 31- 05-2005 IS BARRED BY LIMITATION. SINCE THE BLOCK ASSESSMEN T ORDER IN THE INSTANT CASE SHOULD HAVE BEEN PASSED ON OR BEFOR E 30-04- 2005 AND SINCE THE SAME HAS BEEN PASSED ON 31-05-200 5, THEREFORE, THE BLOCK ASSESSMENT ORDER FRAMED U/S.158BC ON 31-05-2 005 IS BAD IN LAW AND INFRUCTUOUS. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 23. SINCE THE ASSESSEE SUCCEEDS ON THIS TECHNICAL GROUND , THE OTHER GROUNDS BEING ACADEMIC IN NATURE ARE NOT BEING AD JUDICATED. SINCE THE ASSESSMENT ORDER BECOMES BAD IN LAW AS A NULLIT Y, THEREFORE, THE GROUNDS RAISED BY THE REVENUE BECOME INFR UCTUOUS. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 18 PAKALE GROUP SHRI SUBASH SHANKAR PAKALE: ITA NO. 616/PN/2006 (BY REVENUE) ITA NO. 641/PN/2006 (BY ASSESSEE) - 24. THE ASSESSEE IN ITA NO.641/PN/2006 HAS ALSO TAKEN TH E ADDITIONAL GROUND THAT THE BLOCK ASSESSMENT FRAMED U/S.1 58BC(C) DATED 31-05-2005 IS BAD IN LAW AND INFRUCTUOUS. 25. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT HERE ALSO THERE WAS NO SEIZURE IN THE SECOND PANCHANAM A DATED 31-05-2003, A COPY OF WHICH IS PLACED AT PAGES 273 AND 2 74 OF THE PAPER BOOK. THEY HAD COMPLETED THE SEARCH ON 27-04-2 003 AND HAD INVENTORISED GOLD, JEWELLERY, SILVER UTENSILS, INVENTORISED THE LIS TED QUANTITY OF STOCK FOUND DURING THE SEARCH PERIOD FROM 24- 04-2003 TO 26-04-2003/27-04-2003. WHILE LIFTING THE PROHIBITORY ORDER U/S.132(3) THE STATEMENT OF THE ASSESSEE WAS RECORDED A ND HAS BEEN PREPARED. IT DOES NOT INDICATE ANY INDEPENDENT SEARCH/ SEIZURE. THEREFORE, THE FACTS OF THE INSTANT APPEALS ARE IDENTICAL TO THE GROUNDS IN ITA NO.643/PN/2006 IN CASE OF SHRI PRAVIN S. PA KALE. THE ARGUMENTS IN THE ABOVE APPEALS ARE SAME AS ARGUED IN THE CASE OF SHRI PRAVIN S. PAKALE. THE LD. DEPARTMENTAL REPRESENTAT IVE ON THE OTHER HAND RELIED ON HIS ARGUMENTS IN THE CASE OF S HRI PRAVIN S. PAKALE. 26. AFTER HEARING BOTH THE SIDES, THE FACTS IN THE ABOVE APPEALS ARE IDENTICAL TO THAT OF SHRI PRAVIN S. PAKALE. WE HAVE ALREAD Y DISCUSSED THE ISSUE IN THE PRECEEDING PARAGRAPHS AND THE ADDITIONA L GROUND RAISED BY THE ASSESSEE HAS BEEN ALLOWED AND THE BLOCK A SSESSMENT ORDER PASSED ON 31-05-2005 HAS BEEN HELD AS VOID BEING BARRED BY LIMITATION. FOLLOWING SIMILAR REASONINGS, WE HOLD THAT THE ASSESSMENT ORDER FRAMED U/S.158BC(C) ON 31-05-2005 IN TH E ABOVE 19 PAKALE GROUP APPEAL FILED BY THE ASSESSEE IS ALSO BARRED BY LIMITATION. ACC ORDINGLY, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE IS ALLOWED. SINCE THE ASSESSEE SUCCEEDS ON THIS TECHNICAL ISSUE, THE OTHER GRO UNDS RAISED BY THE ASSESSEE ON MERIT BEING ACADEMIC IN NATURE ARE N OT BEING ADJUDICATED. 27. SINCE THE ASSESSMENT ORDER HAS BEEN HELD AS BARRED BY LIMITATION, THE GROUNDS RAISED BY THE REVENUE BECOME INFRUC TUOUS. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED. SHRI VILAS SHANKAR PAKALE : ITA NO.617/PN/2016 (BY REVENUE) : ITA NO.674/PN/2006 (BY ASSESSEE) : CO NO.29/PN/2008 (BY ASSESSEE) : (ARISING OUT OF ITA NO.617/PN/2006) 28. IN THE ABOVE APPEAL ALSO, THE ASSESSEE HAS ALSO TAKE N THE ADDITIONAL GROUND THAT THE BLOCK ASSESSMENT FRAMED U/S.1 58BC(C) DATED 31-05-2005 IS BAD IN LAW AND INFRUCTUOUS. 29. AFTER HEARING BOTH THE SIDES, WE FIND THE FACTS IN THE IN STANT CASE ARE IDENTICAL TO THE FACTS IN ITA NO.643/PN/2006 IN C ASE OF SHRI PRAVIN SHANKAR PAKALE. WE HAVE ALREADY DECIDED THE ISSUE AND THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ALLOWED AND THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED AS INFRUCTUO US. FOLLOWING SIMILAR REASONINGS, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED AND THE GROUNDS ON MERIT BEING ACADE MIC IN NATURE ARE NOT BEING ADJUDICATED. THE APPEAL FILED BY THE REVENUE BECOMES INFRUCTUOUS IN VIEW OF THE ASSESSMENT ORDER BEING HELD AS BARRED BY LIMITATION AND THEREFORE DISMISSED. THE CO. FILED BY THE ASSESSEE ALSO BECOMES INFRUCTUOUS AND THE SAME IS DISMISSED. 20 PAKALE GROUP ITA NO.649/PN/2006 (BY ASSESSEE) SHRI SATISH SHANKA R PAKALE 30. IN THE INSTANT APPEAL ALSO, THE ASSESSEE HAS TAKEN T HE ADDITIONAL GROUND THAT THE BLOCK ASSESSMENT FRAMED U/S.1 58BC(C) DATED 31-05-2005 IS BAD IN LAW AND INFRUCTUOUS. 31. AFTER HEARING BOTH THE SIDES, WE FIND THE FACTS IN THE IN STANT CASE ARE IDENTICAL TO THE FACTS IN ITA NO.643/PN/2006 IN C ASE OF SHRI PRAVIN SHANKAR PAKALE. WE HAVE ALREADY DECIDED THE ISSUE AND THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ALLOWED . FOLLOWING SIMILAR REASONINGS, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED AND THE GROUNDS ON MERIT BEING ACADE MIC IN NATURE ARE NOT BEING ADJUDICATED. SHRI RAMESH SHANKAR PAKALE : ITA NO.677/PN/2006 (BY REVENUE ) : ITA NO.656/PN/2016 (BY ASSESSEE) 32. IN THE INSTANT APPEAL ALSO, THE ASSESSEE HAS TAKEN T HE ADDITIONAL GROUND THAT THE BLOCK ASSESSMENT FRAMED U/S.1 58BC(C) DATED 31-05-2005 IS BAD IN LAW AND INFRUCTUOUS. 33. AFTER HEARING BOTH THE SIDES WE FIND THE ADDITIONAL GROU ND RAISED BY THE ASSESSEE IS IDENTICAL TO THE ADDITIONAL GROU ND RAISED IN ITA NO.643/PN/2006 IN CASE OF SHRI PRAVIN SHANKAR PAKALE. WE HAVE ALREADY DECIDED THE ISSUE AND THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. SINCE THE ASSESSEE SUCCEEDS ON THIS PRELIMINARY ISSUE, THE OTHER GR OUND RAISED BY THE ASSESSEE ON MERIT BEING ACADEMIC IN NATURE ARE N OT BEING ADJUDICATED. SINCE THE ASSESSMENT ORDER IS HELD AS BARR ED BY 21 PAKALE GROUP LIMITATION, THE APPEAL FILED BY THE REVENUE BECOMES INFRUCTUOU S AND ACCORDINGLY THE SAME IS DISMISSED. 34. IN THE RESULT, ALL THE APPEALS FILED BY THE RESPECTIVE AS SESSEES ARE ALLOWED AND THE APPEALS FILED BY THE REVENUE IN ALL THE CASES AND CO FILED BY THE ASSESSEE IN THE CASE OF SRI VILAS S. PAKALE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-05-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 13 TH MAY , 2016. LRH'K % &() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A) CENTRAL CIRCLE, KOLHAPUR 4. % S / THE CIT-CENTRAL CIRCLE, KOLHAPUR 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , // ( + //TRUE COPY/ / 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE