N H Securities Ltd., Mumbai V. DCIT, Central Circle 40, Mumbai

ITSSA 137/MUM/2004

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2054 (ITAT-MUMBAI)
• Duration Of Justice: 12 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 12-11-2015
• Assessment Year: misc
• Appeal Filed On: 08-03-2004
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: REEPAL TRALSHAWALLA
• Keywords: Search and seizure; Share purchase agreement; Period of limitation; Block assessment; Time period of passing order
• Section: 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T. (SS) NO. 115 /MUM/ 2004 (BLOCK ASSESSMENT PERIOD 1.4.1987 TO 15.10.1997) DCIT CC - 40 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. N.H. SECURITIES LTD. 9, BHUPEN CHAMBERS GROUND FLOOR DALAL STREET, FORT MUMBAI - 400 023. ( APPELLANT ) ( RESPONDENT ) I.T.(SS) NO. 137/MUM/2004 (BLOCK ASSESSMENT PERIOD 1.4.1987 TO 15.10.1997 ) M/S. N.H. SECURITIES LTD. 9, BHUPEN CHAMBERS GROUND FLOOR DALAL STR EET, FORT MUMBAI - 400 023. VS. DCIT CC - 40 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACS7140Q ASSESSEE BY SHRI REEPAL TRALSHAWALLA DEPARTMENT BY DR. P. DANIEL DATE OF HEARING 2.3 . 201 6 DATE OF PRONOUNCEMEN T 18 . 5 . 201 6 O R D E R PER B.R. BASKARAN, A M : - THE CROSS APPEAL S FILED BY THE PARTIES ARE DIRECTED AGAINST THE ORDER DATED 19.12.2003 PASSED BY LEARNED CIT(A), CENTRAL - VII, MUMBAI FOR THE BLOCK PERIOD ENDING 15.10.1997. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SHARE TRADING, SHARE BROKING AND FINANCING ACTIVITIES. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIONS IN THE ASSESSEES GROUP INCLUDING THE ASSESSEE. ACCORDINGLY, THE AO FRAMED THE ASSESSMENT IN THE HANDS OF THE ASSESSEE U/S 158BC OF THE ACT. THE APPEAL FILED M/S. N.H. SECURITIES 2 BY THE ASSESSEE BEFORE LD CIT(A) CHALLENGING THE ASSESSMENT ORDER WAS ALLOWED PARTLY. AGGRIEVED BY HIS ORDER, BOTH THE PARTIES HAVE FILED APPEALS BEFORE US CHALLENGING THE ISSUES DECIDED BY LD CIT(A) AGAINST EACH OF THEM. 3. BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED AN ADDITIONAL GROUND CONTENDING THAT THE IMPUGNED ASSESSMENT ORDER IS TIME BARRED. SINCE IT IS A LEGAL ISSUE AND SINCE IT GOES TO THE ROOT OF THE MATTER, WE HAVE ADMITTED THIS LEGAL ISSUE AND ACCORDINGLY HE ARD THE PARTIES ON THE SAME. 4. THE FACTS RELATING TO THE LEGAL ISSUE ARE SET OUT IN BRIEF. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIONS IN THE HANDS OF THE ASSESSEE AT THREE PLACES, VIZ., (A) RADHA BHAVAN OFFICE, (B) BHUPEN CHAMBERS OFFICE AND (C) CHENNAI OFFICE. THE WARRANT OF AUTHORISATION IS DATED 14.10.1997. THE SEQUENCE OF EVENTS IS NARRATED BELOW: - A. RADHA BHAVAN OFFICE : - A. SEARCH COMMENCED ON 15.10.1997 AND IT WAS CONCLUDED TEMPORARILY ON 16.10.1997. CERTAIN DOCUMENTS WERE SEI ZED AND THEY WERE KEPT UNDER PROHIBITORY ORDER (P.O.) DATED 16.10.1997. B. SEARCH COMMENCED AGAIN ON 27.10.1997 AND CONCLUDED TEMPORARILY. NOTHING WAS SEIZED. P.O. WAS PASSED. C. SEARCH COMMENCED AGAIN ON 03.11.1997 AND CONCLUDED TEMPORARILY. NOTHING WAS SEIZED. P.O. WAS PASSED. D. SEARCH COMMENCED AGAIN ON 17.11.1997 AND CONCLUDED TEMPORARILY. INVENTORY OF SHARES TAKEN. P.O. WAS PASSED. E. SEARCH COMMENCED AGAIN ON 12.01.1998 AND CONCLUDED TEMPORARILY. NOTHING WAS SEIZED. P.O. WAS PASSED. F. SEARCH COMMENCED AGAIN ON 15.01.1998. AS PER PANCHANAMA, THE SEARCH ACTION WAS CARRIED OUT FOR THE PURPOSES OF SEIZING UNACCOUNTED SHARES AND FOR RELEASE OF DOCUMENTS AND SHARES KEPT UNDER P.O. M/S. N.H. SECURITIES 3 G. AS PER THE CHART PREPARED BY REVENUE, SEARCH WAS ALS O CONDUCTED ON 20.10.1997 FOR PASSING P.O. B. BHUPEN CHAMBERS OFFICE : - A. SEARCH COMMENCED ON 15.10.1997. CASH WAS FOUND BUT NOT SEIZED. SEARCH CONCLUDED TEMPORARILY AND P.O. WAS PASSED. B. SEARCH COMMENCED AGAIN ON 17.11.1997 AND CONCLUDED TEMPORAR ILY. INVENTORY OF SHARES TAKEN. P.O. WAS PASSED. C. SEARCH COMMENCED AGAIN ON 12.01.1998 AND CONCLUDED FINALY. NOTHING WAS SEIZED. AS PER PANCHANAMA, SEARCH ACTION CARRIED OUT FOR THE PURPOSES OF THE RELEASE OF DOCUMENTS AND SHARES KEPT UNDER P.O. C. CHENNAI OFFICE : - A. SEARCH COMMENCED ON 15.10.1997 AND CONCLUDED ON THE SAME DAY. CERTAIN DOCUMENTS WERE SEIZED AND INVENTORY OF DOCUMENTS, CASH, BANK ACCOUNTS AND SHARES TAKEN. 5. THE CONTENTION OF THE ASSESSEE IS THAT THE SEARCH ACTION WAS COND UCTED ONLY ON 15.10.1997 AS PER THE WARRANT OF AUTHORISATION DATED 14.10.1997. THOUGH IT WAS STATED THAT THE SEARCH WAS CONCLUDED TEMPORARILY ON 16.10.1997, THE SAME AMOUNTS TO CONCLUSION, SINCE SUBSEQUENT SEARCH ACTION WAS CARRIED OUT ONLY TO LIFT THE PR OHIBITORY ORD ERS AND PASS IT AGAIN. ACCORDINGLY, THE ASSESSEE CONTENDED THAT THE LAST PANCHANAMA IN RESPECT OF THE AUTHORISATION EXECUTED ON 14.10.1997 IS 16.10.1997 ONLY AND THE SAME IS REQUIRED TO BE TAKEN FOR THE PURPOSE OF COMPUTING THE TIME LIMIT AVA ILABLE FOR COMPLETION OF ASSESSMENT. HE SUBMITTED THAT THE PROVISIONS OF SEC. 158BE(1)(B) PRESCRIBES A TIME LIMIT OF TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORISATION OF SEARCH UNDER SECTION 132 WAS EXECUTED (IN CASES WHERE SEARCH IS CONDUCTED ON OR AFTER 1.1.1997). HE SUBMITTED THAT IT IS A WELL SETTLED PROPOSITION THAT THE PANCHANAMA PREPARED FOR PASSING P.O. CANNOT BE CONSIDERED TO BE LAST PANCHANAMA. ACCORDINGLY, THE AO SHOULD HAVE PASSED THE BLOCK ASSESSMENT M/S. N.H. SECURITIES 4 ORDER ON OR BEFO RE 31.10.1999. THE LD A.R SUBMITTED THAT THE AO HAS , HOWEVER, PASSED THE BLOCK ASSESSMENT ORDER ONLY ON 31.1.2000 AND HENCE THE SAME IS BARRED BY LIMITATION. 6. THE LD A.R ALSO SUBMITTED THAT THE SUBSEQUENT SEARCH CONDUCTED FOR PASSING P.O WAS CONDU CTED BY THE OFFICERS, WHO WERE NOT AUTHORISED IN THE SEARCH WARRANT PREPARED ON 14.10.1997. IN THIS REGARD, THE ASSESSEE SUBMITTED A LIST CONTAINING THE NAMES OF OFFICERS, WHO HAVE CONDUCTED THE SEARCH FOR LIFTING OF P.O. AS PER THE LIST, THE SEARCH WAS CONDUCTED AT RADHA BHAVAN OFFICE ON 27.10.1997, 12.01.1998 AND 15.01.1998 BY OFFICERS NAMED SHRI K. SHIVARAMAN AND SHRI K.G.VASUDEVAN. IT IS NOTICED THAT THESE TWO OFFICIALS HAVE NOT BEEN NAMED AS AUTHORISED OFFICERS IN THE SEARCH WARRANT. IN RESPECT OF S EARCH CONDUCTED AT RADHA BHAVAN OFFICE ON 3.11.1997 AND 17.11.1997, THE OFFICIALS CONSISTED OF ONE AUTHORISED OFFICER ONLY. ACCORDINGLY THE LD A.R CONTENDED THAT THE ALLEGED SEIZURE OF SHARE CERTIFICATES (THOUGH DISPUTED BY THE ASSESSEE) THAT TOOK PLACE O N 12.01.1998 AND 15.01.1998 HAVE BEEN MADE BY UNAUTHORISED OFFICERS AND HENCE THE SAID ALLEGED SEIZURE CANNOT BE CONSIDERED TO BE A VALID SEIZURE MADE IN PURSUANCE OF VALID SEARCH CONDUCTED. 7. THE LD A.R ALSO SUBMITTED THAT THE SEARCH WAS CONDUCTED ON 12.01.1998 AT BHPEN CHAMBERS OFFICE BY UNAUTHORISED OFFICERS STATED IN THE PREVIOUS PARAGRAPH, AND THE SEARCH CONDUCTED ON 17.11.1997 AT THAT PLACE INCLUDED ONLY ONE AUTHORISED OFFICER. ACCORDINGLY THE LD A.R CONTENDED THAT THE ALLEGED SEIZURE OF SHARE C ERTIFICATES MADE ON 12.01.1998 (THOUGH DISPUTED BY THE ASSESSEE) CANNOT BE CONSIDERED TO BE A VALID SEIZURE MADE IN PURSUANCE OF VALID SEARCH. HE SUBMITTED THAT THE FACTS PREVAILING IN THE CASE OF GOLDCREST FIN (INDIA) LTD VS. DCIT (105 TTJ 926) ARE IDENT ICAL WITH THE FACTS AVAILABLE IN THE INSTANT CASE AND THE TRIBUNAL HAS HELD IN THE ABOVE SAID CASE THAT THE P.O. M/S. N.H. SECURITIES 5 PASSED BY UNAUTHORISED OFFICERS CANNOT EXTEND THE TIME LIMIT FOR COMPLETION OF ASSESSMENT. 8. ACCORDINGLY, THE LD A.R CONTENDED THAT, FOR ALL PRACTICAL PURPOSES, THE SEARCH WAS CONCLUDED ON 16.10.1997 AND HENCE THE BLOCK ASSESSMENT ORDER PASSED ON 31.1.2000 IS BARRED BY LIMITATION. THE LD A.R PLACED HIS RELIANCE ON HOST OF OTHER CASE LAWS IN SUPPORT OF HIS PROPOSITION. 9. ON THE CONTR ARY, THE LD D.R MAINTAINED THAT THE DEPARTMENT HAS SEIZED CERTAIN SHARE CERTIFICATES IN JANUARY, 2008 AND HENCE THE ASSESSMENT ORDER IS NOT BARRED BY LIMITATION. WHEN THE CONTENTION OF THE ASSESSEE , VIZ., THE REVENUE HAS ONLY INVENTORISED THE SHARE CERTIF ICATES THAT WERE ALREADY SEIZED , WAS POINTED OUT TO LD D.R , HE SUBMITTED THE SHARES WERE UNACCOUNTED SHARES ONLY. WITH REGARD TO THE SEIZURE, IF ANY, CONDUCTED BY THE UNAUTHORISED OFFICERS, THE LD D.R MAINTAINED THAT THEY HAVE BEEN DEPUTED BY COMPETENT AU THORITIES ONLY. 10. WE HAVE HEARD RIVAL CONTENTIONS ON THIS ISSUE AND PERUSED THE RECORD. THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT HAS HELD IN THE CASE OF CIT VS. SANDHA P NAIK (253 ITR 534) THAT THE PROHIBITORY ORDER PASSED US 132(3) OF THE AC T BY AN OFFICER NOT AUTHORISED IN THIS BEHALF WILL NOT EXTEN D THE LIMITATION PERIOD. IN THE INSTANT CASE, THE UNDISPUTED FACT REMAINS THAT THE SEARCH ACTION INCLUDING THE SEARCH CONDUCTED FOR PASSING P.O WERE CONDUCTED UNDER THE WARRANT OF AUTHORISATION D ATED 14.10.1997. THE DISCUSSIONS MADE IN THE PRECEDI NG PARAGRAPH WOULD SHOW THAT CERTAIN UNAUTHORISED OFFICIALS, I.E., OFFICIALS WHO WERE NOT AUTHORISED UNDER WARRANT OF AUTHORISATION DATED 14.10.1997, HAVE CONDUCTED SEARCH ON CERTAIN DATES AND THEY HAVE ALSO CLAIMED TO HAVE SEIZED SHARE CERTIFICATES. HENCE THE ALLEGED SEIZURE OF SEARCH BY THE UNAUTHORISED OFFICERS CANNOT EXTEND THE LIMITATION PERIOD AS HELD BY THE CO - ORDINATE BENCH OF TRIBUNAL IN THE CASE OF GOLDCREST FIN (INDIA) LTD (SUPRA). M/S. N.H. SECURITIES 6 11. ANOT HER IMPORTANT CONTENTION OF THE ASSESSEE IS THAT THE SEARCH CONDUCTED IN ORDER TO LIFE AND/OR TO PASS P.O CANNOT BE CONSIDERED TO BE THE LAST OF AUTHORIZATION REFERRED TO IN SEC. 158BE OF THE ACT. IN THE FOLLOWING CASE LAWS, IT HAS BEEN HELD THAT THE PANC HANAMA PREPARED FOR LIFTING AND PASSING OF P.O CANNOT BE CONSIDERED TO DETERMINE WHETHER THE SEARCH HAS COME TO END OR NOT: - (A) SHAHRUKH KHAN VS. ACIT (104 ITD 221)(MUM) (B) DCIT VS. ADLOF PATRIC PINTO (100 ITD 191)(MUM) (C) JAVED MOHAMD. PESHIMAM VS . DCIT (100 TTJ 434)(MUM) (D) M. SIVARAMAKRISHNNAIAH & CO. VS. ACIT (93 TTJ 1035)(VISAKH) (E) SARB CONSULATE MARINE PRODUCTS (P) LTD VS. ACIT (97 ITD 333)(DEL) (F) CIT VS S.K. KATYAL (ITA 1198/2008 DATED 12.11.2008)(DELHI) (G) NANDLAL M GANDHI VS. AC IT (115 ITD 1)(MUM)(TM). (H) PLASTIKA ENTERPRISES VS. ACIT (IT(SS)A 238 AND 373/MUM/03 DATED 28 - 07 - 2006. THIS ORDER OF THE TRIBUNAL WAS CONFIRMED BY HONBLE BOMBAY HIGH COURT, VIDE ITS ORDER DATED 15.12.2008 PASSED IN ITA NO.1211 OF 2008. (I) ACIT VS. WHITE & WHITE MINERAL (P) LTD (114 TTJ 405)(JODH). (J) ACIT VS. SHREE RAM LIME PRODUCTS (17 ITR (TRIB.) 1 (SB). 12. RECENTLY, THIS BENCH OF THE TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF SHRI JAMNALAL PUROHIT VS. ACIT (IT(SS) NO.187/MUM/2003 AND THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE, VIDE ITS ORDER DATED 13 - 04 - 2016. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY THE BENCH IN THE ABOVE CITED CASE: - 4. WE HAVE HEARD T HE RIVAL SUBMISSIONS AND ALSO PERUSED THE MATERIAL PLACE BEFORE US INCLUDING THE JUDICIAL PRONOUNCEMENTS/DECISIONS RELIED UPON BY THE PARTIES, IN THE LIGHT OF THEIR RESPECTIVE CONTENTIONS. AS PER THE FACTS EMANATING FROM THE RECORD, THE SEARCH WAS CONTENDE D ON M/S. N.H. SECURITIES 7 15/12/1997 AND PANCHNAMA WAS PREPARED ON SAME DATE I.E. ON 15/12/1997 VIDE WHICH PROHIBITORY ORDERS U/S 132(3) IN RESPECT OF BANK ACCOUNT ETC. WERE MADE. THE PROHIBITORY ORDERS WERE LIFTED ON 06/01/1998 BY PREPARING ANOTHER PANCHNAMA WHEREIN IT WAS ST ATED THAT SEARCH WAS COMMENCED AT 1.30 PM AND CONCLUDED AT 2.00PM AND THAT SEARCH WAS FINALLY CONCLUDED. THE LD. CIT(A) HAS DISMISSED THE PLEA OF THE ASSESSEE ON THE GROUND THAT THE LAST PANCHNAMA, WITHIN THE MEANING OF EXPLANATION 2 TO SECTION 158BE OF TH E ACT WAS DRAWN ON 6/1/98 THEREFORE, THE AO HAS COMPLETED THE ASSESSMENT WITHIN THE LIMITATION PERIOD. 5. THE COORDINATE BENCH OF MUMBAI TRIBUNAL IN DEPUTY COMMISSIONER V. ADOLF PATRICK PINTO (2006) 284 ITR 207 (MUMBAI) (SIC. (100 ITD 191) ) FOLLOWING TH E LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY IN CIT VS. MRS. SANDHYA P. NAIK & OTHERS (2002) 253 ITR 534(BOM), HAS DECIDED THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. IN THE SAID CASE THE HONBLE COURT HAS HELD THAT BY PASSING A REST RAINT ORDER UNDER SECTION 132(3) THE TIME LIMIT AVAILABLE FOR FRAMING BLOCK ASSESSMENT ORDER CANNOT BE EXTENDED. SIMILARLY, BY SIMPLY STATING IN PANCHNAMA THAT THE SEARCH IS TEMPORARY THE SUSPENDED THE AUTHORISED OFFICER CANNOT KEEP THE SEARCH PROCEEDING I N OPERATION BY PASSING A RESTRAINT ORDER UNDER SECTION 132(3). THE COORDINATE BENCH IN ADOLF PATRICK PINTOS CASE (SUPRA) HAS HELD AS UNDER; - THE PASSING OF PROHIBITORY ORDER UNDER SECTION 132(3) IS AN ADMINISTRATIVE ACT AND IT IS THE DOMAIN OF THE AUTH ORISED OFFICER TO DECIDE DURING THE COURSE OF SEARCH IF ANY PROHIBITORY ORDER IS REQUIRED TO BE PASSED OR NOT. HOWEVER, IN ORDER TO DETERMINE WHETHER THE SEARCH HAS COME TO AND OR NOT, WHAT IS REQUIRED TO BE SEEN WHETHER THE DOCUMENTS ARE VALUABLE BEINGS K EPT UNDER HAVE BEEN APPRAISED OR NOT. EXPLANATION 2 TO SECTION 158 BE DOES NOT MEAN THAT THE TIME LIMITATION WILL NOT START TILL THE PROHIBITORY ORDER PASSED UNDER SECTION 132(3) IS IN OPERATION. M/S. N.H. SECURITIES 8 6. IN THE CASE BEFORE COORDINATE BENCH, THE SEARCH PAR TY VISITED TWICE AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON JUNE 19, 1998 AND AUGUST 1, 1998. ON THE FIRST VISIT ITSELF THE HOUSE WAS SEARCHED AND THE SHARES AND DEBENTURES FOUND WERE INVENORISED AND KEPT IN THE CUPBOARD IN THE BEDROOM AND PROHIBITORY ORDER WAS PASSED UNDER SECTION 132(3) AND IT WAS MENTIONED IN THE ORDER THAT ALL THE SHARES AND DEBENTURES BELONGING TO THE ASSESSEE AND HIS FAMILY MEMBERS WERE KEPT IN THE CUPBOARD. ON THE SECOND VISIT I.E., 1.8.1998, THE SEARCH PARTY OPENED THE CUPBOARD AND PREPARED SECOND INVENTORY OF SAME SHARES AND DEBENTURES INCORPORATING THE DISTINCTIVE NUMBERS OF THE SHARES AND DEBENTURES. THE QUESTION BEFORE THE TRIBUNAL WAS WHETHER INVENTORY PREPARED ON 19.6.1998 OR INVENTORY PREPARED ON 1.8.98 WAS THE LAST INVENT ORY WITHIN THE MEANING OF EXPLANATION 2 TO SECTION 158BE OF THE ACT. THE TRIBUNAL ANSWERED THE QUESTION AS UNDER: - KEEPING IN VIEW THE FACTS OF THE CASE AND THE CASE LAW REFERRED TO ABOVE, WE ARE OF THE VIEW THAT THE LAST OF THE AUTHORISATION WAS EXECUTE D ON JUNE 1998 AND THE PANCHNAMA PREPARED ON AUGUST 1, 1998 WAS ONLY FOR THE PURPOSE OF LIFTING PROHIBITORY ORDERS AND CANNOT BE TREATED AS EXECUTION OF THE SEARCH WARRANTS. HAVING HELD SO WE HOLD THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 158 BC ON AU GUST 28, 2000, WAS BARRED BY TIME LIMITATION AS PROVIDED UNDER SECTION 158 BE AND THE SAME IS QUASHED 7. IN A. PRAKASH KUMAR JAIN VERSUS JOINT COMMISSION ER OF INCOME TAX 2012, 254 CTR 0576 THE HONBLE HIGH COURT OF MADRAS HAS HELD AS UNDER: - MERELY B ECAUSE, MORE THAN ONE PANCHNAMA IS DRAWN IN THE GIVEN CASE ON AUTHORISATION, ONE CANNOT CONSTRUE THAT THE SUBSEQUENT AND THE LAST OF THE PANCHNAMA ISSUED AS ONE FLOWING OUT OF THE SEARCH AS A LAST OF THE PANCHNAMA REFERABLE TO EXPLANATION 2 TO SECTION 158 BE. ONCE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED AND THE PREMISES IS SEARCHED AND THE SEARCH PARTY LEAVES THE PREMISES, THERE IS THE END OF THE SEARCH AND WHAT COULD BE POSTPONED IS ONLY M/S. N.H. SECURITIES 9 SEIZURE OF THE ARTICLE AND ISSUANCE OF PROHIBITORY ORDER; HOWEVE R, LIMITATION FOR THE COMPLETION OF THE BLOCK ASSESSMENT BEGINS ON THE CONCLUSION OF THE SEARCH AND ISSUANCE OF PANCHNAMA AND IN CASE OF SINGLE AUTHORISATION, THE MOMENT SUCH PARTY LEAVES THE PREMISES BY DRAWING OF THE PANCHNAMA NOTING CONCLUSION OF THE SE ARCH, THE LIMITATION PERIOD BEGINS. 8. THE CO - ORDINATE BENCHES OF ITAT, MUMBAI AS WELL AS THE OTHER BENCHES OF ITAT HAVE HELD THAT FOR THE PURPOSE OF LIMITATION FOR BLOCK YEAR ASSESSMENT, THE DATE OF LIMITATION COMMENCES FROM THE DATE OF PANCHNAMA WHICH REVEAL THAT A SEARCH WAS CARRIED OUT ON THE DAY TO WHICH IT RELATES. IF IT IS FOUND THAT THE PANCHNAMA DOES NOT REVEAL THAT A SEARCH WAS AT ALL CARRIED OUT ON THE DATE TO WHICH IT RELATES THEN IT WOULD NOT BE A PANCHNAMA RELATING TO A SEARCH AND CONSEQUEN TLY, IT WOULD NOT BE A PANCHNAMA, WHICH FINDS MENTION IN EXPLANATION - 2 TO SECTION 158BE OF THE ACT. IT IS THIS PROPOSITION WHICH HAS BEEN UPHELD BY HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. WHITE & WHITE MINERALS PVT. LTD.(SUPRA). 13. IN THE INSTANT CASE, THE SEARCH WAS COMMENCED ON 15 - 10 - 1997 AND IT WAS SUSPENDED ON 16 - 10 - 1997 BY STATING THAT THE SEARCH WAS CONCLUDED TEMPORARILY. THE SEIZURE OF CERTAIN DOCUMENTS HAS TAKEN PLACE ON THAT DATE ONLY. SUBSEQUENT SEARCHES WERE RELATED TO LIFTING OF PROHIB ITORY ORDERS AND PLACING THE DOCUMENTS AGAIN UNDER THE P.O. EVEN THOUGH IT IS CONTENDED THAT CERTAIN UNACCOUNTED SHARE CERTIFICATES WERE SEIZED SUBSEQUENTLY, THE SAID CLAIM SUFFERS FROM TWO INFIRMITIES, VIZ., (A) THE ASSESSEE CLAIMS THAT THE SHARE CERTIFI CATES HAVE SIMPLY BEEN INVENTORISED ON THOSE DATES, MEANING THEREBY, THE SEIZURE HAS ALREADY BEEN COMPLETED ON 16.10.1997 AND (B) THE INVENTORISATION HAS ALSO BEEN DONE BY SOME UNAUTHORIZED OFFICIALS. M/S. N.H. SECURITIES 10 1 4. HENCE IN OUR VIEW, THE DATE OF EXECUTION OF LAST AUTHORIZATION SHOULD BE TAKEN AS 16.10.1997 ONLY AND HENCE THE ASSESSING OFFICER SHOULD HAVE PASSED THE BLOCK ASSESSMENT ORDER BEFORE 31.10.1999. HOWEVER, THE ASSESSING OFFICER HAS PASSED THE ORDER ONLY 31.1.2000 AND HENCE THE SAME IS BARRED BY LIMITATION AND IS LIABLE TO BE QUASHED . ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY BOTH THE TAX AUTHORITIES. 15. THE LD A.R SUBMITTED THAT THE ISSUE RELATING TO LEVY OF SURCHAGE IS DECIDED IN FAVOUR OF THE ASSESSEE BY HONBLE SUPREME COURT IN THE CASE OF VATI KA TOWNSHIP (367 ITR 466) AND THE ISSUE RELATING TO LEVY OF INTEREST U/S 158BFA(1) IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. NAGENDRA BALIKA (363 ITR 410). SINCE WE HAVE QUASHED THE ASSESS MENT ORDER AS TIME BARRED, WE DO NOT FIND IT NECESSARY TO ADDRESS THE ISSUES URGED ON MERITS , AS THE SAME WOULD BE AN ACADEMIC EXERCISE . 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 18 .5 .2016 . SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 18 / 5 /20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS