BHARAT SEKHSARIA, MUMBAI V. DCIT CEN CIR 6, MUMBAI

ITSSA 20/MUM/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0741 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 01-10-2012
• Assessment Year: misc
• Appeal Filed On: 08-03-2011
• Court: TRIBUNAL
• Department Lawyers: S J SINGH
• Keywords: Gift; Search and seizure; Share purchase agreement; Period of limitation; Block assessment
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) SHRI BHARAT SEKHSARIA 719, ROTUNDA, B.S. MARG, FORT, MUMBAI 400 023 VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-6 MUMBAI 400 021. PAN : AAVPS 1689 L APPELLANT .. RESPONDENT APPELLANT BY : SHRI RAJIV KUMAR RESPONDENT BY : SHRI S.J. SINGH DATE OF HEARING : 29-04-2015 DATE OF PRONOUNCEMENT : 29.05.2015 O R D E R PER G.S. PANNU, A.M . THE CAPTIONED APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) (HEREINAFTER REFERRED TO AS THE CIT(A)) DATED 25. 02.2011 WHICH IN- TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSI NG OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE 2 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) ACT) DATED 23.02.2000, PERTAINING TO BLOCK PERIOD 01.04.1987 TO 08.12.1997. 2. THIS APPEAL WAS INITIALLY DISPOSED-OFF BY THE TR IBUNAL VIDE ORDER DATED 19.10.2012. THE SAID ORDER OF THE TRIBU NAL HAS BEEN PARTLY SET-ASIDE BY THE HONBLE BOMBAY HIGH COURT I N INCOME TAX APPEAL NO.362 OF 2013 DATED 2.3.2015. IN TERMS OF T HE SAID ORDER OF THE HONBLE BOMBAY HIGH COURT THE MATTER HAS BEEN R ESTORED TO THE FILE OF THE TRIBUNAL FOR A FRESH DISPOSAL OF THE GR OUNDS OF APPEAL NOS.1, 2 AND 3 RAISED BY THE ASSESSEE IN ITS ORIGIN AL MEMO OF APPEAL FILED BEFORE THE TRIBUNAL. THE OPERATIVE PART OF TH E ORDER OF THE HONBLE BOMBAY HIGH COURT IS REPRODUCED AS UNDER :- 8. THUS, THE QUESTION AS FORMULATED IS ANSWERED IN FAVOUR OF THE ASSESSEE AND THE IMPUGNED ORDER OF THE TRIBUNAL IS SET ASIDE TO THE EXTENT IT REJECTS GROUND NOS. 1,2 AND 3 AND THE SAME ARE RESTORED TO THE FILE OF THE TRIBUNAL FOR F RESH DISPOSAL. IT MAY BE POINTED OUT THAT THE CIT (APPEALS) AFTER HAVING REJECTED THE APPELLANTS ADDITIONAL GROUNDS PROCEED S FURTHER TO DEAL WITH THE GROUND NOS.1, 2 AND 3 AND REJECTS THE SA ME ON MERITS. THIS IS AN ADDITIONAL REASON THAT THE TRIBU NAL OUGHT TO HAVE CONSIDERED GROUNDS 1,2, AND 3 RAISED BY THE APPELL ANT ON MERITS WHICH IT FAILED TO DO. 9. ACCORDINGLY, IMPUGNED ORDER DATED 19.10.2012 IS S ET ASIDE TO THE EXTENT IT REJECT THE APPELLANTS GROUNDS NOS .1,2 AND 3. ON THE AFORESAID ISSUE ALONE THE APPEAL IS RESTORED TO T HE TRIBUNAL. THE TRIBUNAL IS DIRECTED TO HEAR THE APPELLANT AND PA SS A FRESH ORDER ON GROUND NOS.1,2 AND 3 URGED BY THE APPELLANT A S EXPEDITIOUSLY AS POSSIBLE AND PREFERABLY WITHIN A P ERIOD OF SIX MONTHS FROM TODAY. 3 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) 3. IN THE ABOVE BACKGROUND, THE CAPTIONED PROCEEDIN GS HAVE BEEN LISTED FOR HEARING. THE GROUNDS OF APPEAL NOS.1, 2 AND 3 RAISED BY THE ASSESSEE READ AS UNDER :- 1.THE ASSESSING OFFICER, DY. CIT., CENTRAL CIRCLE 6, MUMBAI (THE A.O.) ASSUMED JURISDICTION IN THE CASE OF THE A PPELLANT ILLEGALLY; HE WAS NOT THE A.O. IN THE CASE OF THE A PPELLANT. HE HAD NO JURISDICTION TO PASS THE IMPUGNED BLOCK ASSES SMENT ORDER DATED 23.2.2000. THE BLOCK ASSESSMENT ORDER IS VOID FOR THIS REASON. 2. THE IMPUGNED BLOCK ASSESSMENT ORDER HAS BEEN PASSE D WITHOUT SERVING ANY NOTICE U/S.143(2) OF THE INCOME TAX ACT, 1961 (THE ACT). IT IS A MANDATORY REQUIREMENT AND IN ABSENCE OF SUCH A NOTICE THE BLOCK ASSESSMENT ORDER IS ILLEGAL AND VOID. 3. THE BLOCK ASSESSMENT ORDER HAS BEEN PASSED AFTER THE PERIOD OF LIMITATION PRESCRIBED UNDER THE ACT. 4. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE FOR THE ASSESSEE SUBMITTED THAT IN SO FAR AS THE GROUNDS OF APPEAL NOS. 1 AND 2 ARE CONCERNED, ASSESSEE DOES NOT WISH TO PRES S THE SAME. ACCORDINGLY, GROUNDS OF APPEAL NOS. 1 AND 2 STATED ABOVE ARE DISMISSED AS NOT PRESSED. THUS, THE ONLY ISSUE SU RVIVING FOR CONSIDERATION IN THE PRESENT PROCEEDINGS IS MANIFES TED BY WAY OF GROUND OF APPEAL NO.3, WHICH SEEKS TO CHALLENGE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON THE GROUND THAT IT HAS BEEN PASSED BEYOND THE PERIOD OF LIMITATION PRESCRI BED UNDER THE ACT. 5. IN ORDER TO DETERMINE THE AFORESAID CONTROVERSY, THE RELEVANT FACTS CAN BE UNDERSTOOD AS FOLLOWS. THE APPELLANT B EFORE US IS AN 4 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) INDIVIDUAL CARRYING ON BUSINESS AS A SHARE BROKER O F THE BOMBAY STOCK EXCHANGE THROUGH HIS PROPRIETARY CONCERN, M/S . RAMKRISHNA SEKHSARIA. IN THIS CASE, A SEARCH ACTION U/S.132 OF THE ACT WAS CARRIED OUT AT THE OFFICIAL AND RESIDENTIAL PREMISE S OF THE ASSESSEE ON THE BASIS OF A WARRANT OF AUTHORIZATION DATED 8. 12.1997. THE PREMISES COVERED BY THE SEARCH ACTION WERE THE FOLL OWING-(I) 719, ROTUNDA BUILDING, B.S. MARG, FORT, MUMBAI-400023 ( IN SHORT THE ROTUNDA BUILDING), WHICH IS THE OFFICE OF THE ASSE SSEE; (II) 25, SONAWALA BUILDING, 2 ND FLOOR, BANK STREET, MUMBAI-400023 ( IN SHORT THE SONAWALA BUILDING), WHICH IS AN OFFICE SPACE OWNED BY ANOTHER INDIVIDUAL WHERE CERTAIN ACCOUNT BOOKS AND DOCUMENTS BELONGING TO THE ASSESSEE WERE KEPT; AND, (III) 58/ A, WALKESHWAR ROAD, KRISHNA NIWAS, MUMBAI-400006 (IN SHORT THE K RISHNA NIWAS), WHICH IS A RESIDENTIAL BUILDING OWNED BY A SSESSEES MOTHER WHERE THE ASSESSEE WAS RESIDING. SEARCH OPERATIONS WERE CARRIED OUT AT THE ROTUNDA BUILDING ON 9.12.1997 AND 13.1.1 998. AS PER THE PANCHNAMA DRAWN UP ON 13.1.1998 IN THE COURSE O F SEARCH, CERTAIN SHARES / STOCKS BELONGING TO THE ASSESSEE W ERE FOUND BUT NOT SEIZED. THE SAID SHARE CERTIFICATES, TRANSFER D EEDS AND OTHER PAPERS KEPT IN A WOODEN CABINET IN THE ROTUNDA BUIL DING WERE INVENTORIED AND LISTED AS ANNEXURE-2 TO THE PANCHNA MA DATED 13.01.1998. PARAS 5, 8 AND 9 OF THE PANCHNAMA ARE RELEVANT, WHICH READ AS UNDER :- 5 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) 5. IN THE COURSE OF THE SEARCH. (A) THE FOLLOWING WERE FOUND AND SEIZED. (I) BOOKS OF ACCOUNTS AND DOCUMENTS AS PER ANNEXURE A ( NIL SHEETS). (II) BULLION I.E. GOLD SILVER ETC AS PER ANNEXURE B (NI L SHEETS). (III) CASH AS PER ANNEXURE C ( NIL SHEETS). (IV) JEWELLERY, ORNAMENTS ETC. WHICH HAVE BEEN INVENTORI SED SEPARATELY FOR EACH PLACE FROM WHERE RECOVERED AS PE R ANNEXURE J ( NIL SHEETS). (V) SILVER ARTICLES, AND SILVERWARE AS PER ANNEXURE S ( NIL SHEETS). (VI) OTHER VALUABLES, LOCKERS KEY F.DS. ETC AS PER ANNEX URE O ( NIL SHEETS). (B) THE FOLLOWING WERE FOUND BUT NOT SEIZED: (I) BOOK OF ACCOUNTS AND DOCUMENTS AS PER ANNEXURE MARKS OF IDENTIFICATION WERE PLACED ON THEM AND THE SPECIMEN OF THE MARKS AND THE PAGES WHERE THESE HAVE BEEN PLACED AR E SHOWN IN THE INVENTORY PREPARED VIZ. ANNEXURE 1----- ---NIL----- (II) THE OTHER VALUABLE ARTICLES (INCLUDING MONEY) AS PE R ANNEXURE ANNEXURE 2 INVENTORY OF SHARES/STOCK KEP T IN PROHIBITORY ORDER. (SEPARATE INVENTORISE OF JEWELLERY, ORNAMENTS, SILV ERWARE ETC. WERE PREPARED FOR ITEMS FOUND IN DIFFERENT PLACES OR CLAIMED TO BE BELONGING TO DIFFERENT PERSONS). . 8. THE SEARCH COMMENCED ON 13.1.1998 AT 12.15 PM. THE PROCEEDINGS WERE CLOSED ON 13.1.1998 AT 3.45 PM AS TEMPORARILY CONCLUDED FOR THE DAY TO BE COMMENCED SUBSEQUENTLY FOR WHICH PURPOSE SEALS WERE PLACED ON THE WOODEN DRAWER IN THE OFFICE PREMISES AT 719, ROTUND A B S MARG, MUMBAI, IN OUR PRESENCE. 6 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) 9. AN ORDER, UNDER SECTION 132(3) OF THE I.T.ACT, 196 1 IN RESPECT OF THE SEALED PREMISES AS MENTIONED ABOVE WAS SERVED ON SHRI.BHARAT SEKHSARIA BY THE SAID AUTHORIZED OFFICERS, 6. ON EVEN DATE I.E., 13.1.1998 A PROHIBITORY ORDER U/S.132 (3) OF THE ACT WAS ALSO SERVED ON ASSESSEE, SHRI BHARAT SE KHSARIA, WHEREBY THE WOODEN CABINET CONTAINING THE AFORESAID MATERIAL WAS SEALED. QUITE CLEARLY, SEALING OF THE WOODEN CABINE T AND PASSING OF THE PROHIBITORY ORDER U/S132(3) OF THE ACT THEREOF WAS IN RESPECT OF THE CONTENTS, WHICH WERE ALREADY INVENTORISED. ADMI TTEDLY, SUCH CONTENTS WERE SHARE CERTIFICATES, TRANSFER DEEDS AN D OTHER PAPERS WHICH WERE DULY INVENTORISED AS PER ANNEXURE2 TO T HE PANCHNAMA DATED 13.1.1998. SUBSEQUENTLY, NO OTHER SEIZURE WAS MADE FROM THE ROTUNDA BUILDING AND ON 6.2.1998 THE PROHIBITOR Y ORDER DATED 13.1.1998 WAS VACATED / REVOKED. HOWEVER, ON 6.2.19 98 ALSO, A PANCHNAMA WAS DRAWN-UP WHOSE RELEVANT CONTENTS ARE AS UNDER : 5. IN THE COURSE OF THE SEARCH. (A) THE FOLLOWING WERE FOUND AND SEIZED. (I) BOOKS OF ACCOUNTS AND DOCUMENTS AS PER ANNEXURE A ( NIL SHEETS). (II) BULLION I.E. GOLD, SILVER ETC AS PER ANNEXURE B ( NIL SHEETS). (III) CASH AS PER ANNEXURE C ( NIL SHEETS). (IV) JEWELLERY, ORNAMENTS ETC. WHICH HAVE BEEN INVENTORISED SEPARATELY FOR EACH PLACE FROM WHOM RECOVERED AS PER ANNEXURE J ( NIL SHEETS). (V) SILVER ARTICLES, AND SILVERWARE AS PER ANNEXURE S ( NIL SHEETS). 7 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) (VI) OTHER VALUABLES, LOCKERS KEYS F.DS. ETC AS PER ANNEXURE O ( NIL SHEETS). (B) THE FOLLOWING WERE FOUND BUT NOT SEIZED:__N.A.__ (I) BOOK OF ACCOUNTS AND DOCUMENTS AS PER ANNEXURE. MARKS OF IDENTIFICATION WERE PLACED ON THEM AND THE SPECIMEN OF THE MARKS AND THE PAGES WHERE THESE HAVE BEEN PLACED ARE SHOWN IN THE INVENTORY PREPARE D VIZ. ANNEXURE (II) THE OTHER VALUEABLE ARTICLES (INCLUDING MONEY) AS P ER ANNEXURE. (SEPARATE INVENTORIES OF JEWELLERY, ORNAMENTS, SILVERWARE ETC. WERE PREPARED FOR ITEMS FOUND IN DIFFERENT PLACES OR CLAIMED TO BE BELONG TO DIFFERE NT PERSONS).... 8. THE SEARCH COMMENCED ON 06.02.1998 AT 11:00 A.M. THE PROCEEDINGS WERE CLOSED ON 06.02.1998 AT 11:35 A.M. AS FINALLY CONCLUDED FOR THE DAY TO BE COMMENCED SUBSEQU ENTLY FOR WHICH PURPOSE SEALS WERE PLACE ON THE ENTIRE PL ACE IN OUR PRESENCE. 7. IN TERMS OF THE SAID PANCHNAMA, APART FROM OTHER THINGS IT HAS BEEN PUT THAT THE PROCEEDINGS WERE CLOSED ON 6.2.19 98 AT 11.35 AM AS FINALLY CONCLUDED. 8 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) 8. IN THE ABOVE BACKGROUND, A NOTICE U/S.158 BC OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER ON 20.08.1998 AND I N THE RETURN OF INCOME FILED IN RESPONSE TO SUCH NOTICE, ASSESSEE D ECLARED TOTAL UNDISCLOSED INCOME AT RS.10,00,000/- FOR THE BLOCK PERIOD 1.4.1987 TO 8.12.1997. THE BLOCK ASSESSMENT ORDER U/S.158 BC OF THE ACT WAS PASSED BY THE ASSESSING OFFICER ON 23.02.2000 W HEREBY THE TOTAL UNDISCLOSED INCOME FOR BLOCK PERIOD WAS DETER MINED AT RS.3,52,45,418/-. BE THAT AS IT MAY, THE ONLY PLEA OF THE ASSESSEE BEFORE US IS TO THE EFFECT THAT THE SEARCH HAD INFA CT CONCLUDED ON 16.1.1998 ITSELF AS THERE WAS NO SEARCH AT ALL ON 6 .2.1998, MEANING THEREBY THAT THE PERIOD OF LIMITATION FOR PASSING T HE ASSESSMENT ORDER WOULD END ON 31.1.2000 WHEREAS THE ASSESSMENT ORDER HAS BEEN PASSED ON 23.02.2000 I.E. AFTER THE PERIOD OF LIMITATION HAD EXPIRED. PERTINENTLY, SECTION 158BE(1)(B) OF THE AC T PROVIDES THAT WHERE A SEARCH IS INITIATED ON OR AFTER THE 1 ST DAY OF JANUARY, 1997 THE ASSESSMENT ORDER U/S.158BC SHALL BE PASSED WITH IN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH U/S.132 WAS EXECUTED. ON THE STRENGTH OF THE AFORESAID PROVISION, THE STAND OF THE ASSESSEE IS THAT SINCE NO SEARCH HAD INFACT BEEN CARRIED OUT ON 6.2.1998, SUCH DATE COU LD NOT BE REGARDED AS THE DATE ON WHICH THE LAST OF THE AUTHO RIZATIONS FOR SEARCH WAS EXECUTED AND THEREFORE THE PERIOD OF LIM ITATION COULD NOT BE EXTENDED TO 23.2.2000. ON THE OTHER HAND, THE ST AND OF THE REVENUE IS THAT PLEA OF THE ASSESSEE WAS WRONG SINC E THE LAST PANCHNAMA WAS DRAWN ON 6.2.1998 AND THEREFORE THE A SSESSMENT 9 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) ORDER WHICH WAS PASSED ON 23.02.2000 WAS WITHIN THE PERIOD OF LIMITATION PRESCRIBED IN SECTION 158BE(1)(B) OF THE ACT R.W.S EXPLANATION 2(A) THEREOF. AS THE AFORESAID DISCUSSI ON WOULD REVEAL, THE PERTINENT DISPUTE BETWEEN THE ASSESSEE AND REV ENUE IS THE DATE OF CONCLUSION OF SEARCH CARRIED OUT ON THE BAS IS OF THE WARRANT OF AUTHORIZATION DATED 8.12.1997. THE CASE OF THE A SSESSEE IS THAT SEARCH CONCLUDED IN JANUARY, 1998 ITSELF AND NO FUR THER SEARCH WAS CONDUCTED THEREAFTER INASMUCH AS ON 9.2.1998, THE P ROHIBITORY ORDER PASSED ON 13.1.1998 WAS MERELY VACATED / REVO KED AT THE ROTUNDA BUILDING. 9. IN ORDER TO APPRECIATE THE RIVAL STANDS IT WOULD BE APPROPRIATE TO BRIEFLY TOUCH UPON THE LEGAL POSITION ON THE SUB JECT, MORE PRECISELY TO UNDERSTAND THE MEANING AND IMPORT OF T HE EXPRESSION LAST PANCHNAMA USED IN CLAUSE (A) OF EXPLANATION 2 BELOW SECTION 158 BE(1) OF THE ACT. ON THE SAID SUBJECT, THE LEAR NED REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HO NBLE DELHI HIGH COURT, IN THE CASE OF CIT VS. SHRI S. KATYAL (2009) 308 ITR 168(DEL) TO JUSTIFY THAT PANCHNAMA DATED 6.2.1998 WAS NOT A PANCHNAMA RELEVANT TO DECIDE THE CONCLUSION OF SEARCH FOR THE PURPOSES OF SECTION 158BE(1) OF THE ACT. IN THE CASE BEFORE THE HONBLE DELHI HIGH COURT, THE ISSUE RELATED TO THE LIMITATION FOR FRAMING A BLOCK ASSESSMENT IN TERMS OF SECTION 158BE OF THE ACT. TH E REVENUE SOUGHT TO JUSTIFY THE PERIOD OF LIMITATION ON THE B ASIS OF A PANCHNAMA WHICH WAS SAID TO BE THE LAST PANCHNAMA WHICH 10 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) CONCLUDED THE SEARCH. THE ASSESSEE ASSAILED THE SAI D POSITION ON THE GROUND THAT SUCH LAST PANCHNAMA DID NOT CONCL UDE THE SEARCH, AS NO SEARCH WAS CARRIED OUT ON THE RELEVANT DAY, A ND, RATHER ONLY THE RESTRAINT ORDER PASSED ON AN EARLIER DATE U/S. 132(3) OF THE ACT WAS MERELY REVOKED. IN THIS BACKGROUND, THE HONBLE HIGH COURT CONSIDERED THE RELEVANT LEGAL POSITION AND HELD AS UNDER :- THESE PROVISIONS DEMONSTRATE THAT A SEARCH AND SEIZU RE UNDER THE SAID ACT HAS TO BE CARRIED OUT IN THE PRESEN CE OF AT LEAST TWO RESPECTABLE INHABITANTS OF THE LOCALITY W HERE THE SEARCH AND SEIZURE IS CONDUCTED. THESE RESPECTABLE INH ABITANTS ARE WITNESSES TO THE SEARCH AND SEIZURE AND ARE KNOW AS PANCHAS. THE DOCUMENTATION OF WHAT THEY WITNESS I S KNOWN AS PANCHNAMA. THE WORD NAMA, REFER TO A WRITTEN DOCUMENT. ITS TYPE IS USUALLY DETERMINED BY THE WORD W HICH IS COMBINED WITH IT AS A SUFFIX. EXAMPLES BEING, NIKAH- NAMA (THE WRITTEN MUSLIM MARRIAGE CONTRACT), HIBA NAMA (GIF T DEED, THE WORD HIBA MEANING GIFT), WASIYAT NAMA (WRITTEN WI LL) AND SO ON. SO A PANCHNAMA IS A WRITTEN RECORD OF WHAT THE PA NCH HAS WITNESSED. IN MOHAN LAL V. EMPEROR : AIR 1941 BOMBA Y 149 IT IS OBSERVED THAT THE PANCHNAMA IS MERELY A RECORD OF WHAT A PANCH SEES. SIMILARLY, THE GUJARAT HIGH COURT IN T HE CASE OF VALIBHAI OMARJI V. THE STATE : AIR 1963 GUJ 145 NOT ED THAT A PANCHNAMA IS ESSENTIALLY A DOCUMENT RECORDING CERTAI N THINGS WHICH OCCUR IN THE PRESENCE OF PANCHAS AND WHICH ARE SEEN AND HEARD BY THEM. AGAIN IN THE SATE OF MAHARASHTR A 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 T HEM 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) T O SECTION 158BE OF THE SAID ACT ALTHOUGH IT HAS NOT BEEN DEFINE D IN THE ACT. A PANCHNAMA, AS WE HAVE SEEN IS NOTHING BUT A DOCUMENT RECORDING WHAT HAS HAPPENED IN THE PRESENCE OF THE W ITNESSES (PANCHAS). A PANCHNAMA MAY DOCUMENT THE SEARCH 11 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) PROCEEDINGS, WITH OR WITHOUT ANY SEIZURE. A PANCHNA MA MAY ALSO DOCUMENT THE RETURN OF THE SEIZED ARTICLES OR T HE REMOVAL OF SEALS. BUT, THE PANCHNAMA THAT IS MENTIONED IN EXPLA NATION 2(A) TO SECTION 158BE IS A PANCHNAMA WHICH DOCUMENT S THE CONCLUSION OF A SEARCH. CLEARLY, IF A PANCHNAMA DOE S NOT FROM THE FACTS RECORDED THEREIN, REVEAL THAT A SEARCH WA S AT ALL CARRIED OUT ON THE DAY TO WHICH IT RELATES, THEN IT WOULD NOT BE A PANCHNAMA RELATING TO A SEARCH AND, CONSEQUENTLY, IT WOULD NOT BE A PANCHNAMA OF THE TYPE WHICH FINDS MENTION I N THE SAID EXPLANATION 2(A) TO SECTION 158BE. THIS DISCUSSION LEADS US TO THE QUESTION- WAS THE PA NCHNAMA OF 3.1.2001 OF THE TYPE MENTIONED IN THE SAID EXPLA NATION 2 (A) ? FROM THE FACTS NARRATED ABOVE, IT IS CLEAR THAT TH E PANCHNAMA OF 3.1.2001 ITSELF REVEALS THAT NOTHING WAS SEIZED ON THAT DATE. NOR WAS ANYTHING FOUND ON THAT DATE. IN FACT, NO S EARCH WAS CONDUCTED. THE JEWELLERY THAT WAS PUT IN THE CASH BOX OF THE ALMIRAH HAD ALREADY BEEN SEARCHED, FOUND, INVENTORIED A ND VALUED BY THE DVO ON 17.11.2000 ITSELF. NOTHING REMA INED TO BE SEARCHED THEREAFTER. AND, IN FACT, NO FURTHER SEA RCH WAS CONDUCTED AFTER 17.11.2000. OBVIOUSLY , NOTHING ELSE COULD BE FOUND. ALL THAT WAS DONE ON 3.1.2001, IN THE PRESENC E OF THE WITNESSES (PANCHAS), WAS THAT THE SEALS WERE REMOVE D FROM THE CASH BOX AND THE ALMIRAH AND THE KEYS WERE HANDED BACK O THE ASSESSEE. ESSENTIALLY, THE REVOCATION OF THE RESTRAINT ORDER WAS GIVEN EFFECT TO. THIS IS EXACTLY WHAT THE TRIBU NAL FOUND AS A FACT AND MEANT WHEN IT CONCLUDED THAT THE PANCHNAM A DATED 3.1.2001 WAS MERELY A RELEASE ORDER AND COULD NOT EXT END THE PERIOD OF LIMITATION. 10. THE AFORESAID DISCUSSION BY THE HON. DELHI HIGH COURT IS A POINTER THAT THE PANCHNAMA OF THE TYPE MENTIONED IN THE EXPLANATION 2(A) TO SECTION 158 BE WOULD NOT INCLUD E WITHIN ITS FOLD A PANCHNAMA WHICH MERELY REVOKES AN EARLIER PLACED RESTRAINT ORDER U/S.132(3) OF THE ACT, ESPECIALLY WHEN ON SUC H DATE, NO SEARCH WAS CARRIED OUT. THE AFORESAID LEGAL POSITIO N HAS BEEN 12 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) FURTHER AFFIRMED BY HON. DELHI HIGH COURT IN A LATE R JUDGMENT IN CIT VS. RAJHANS AROMATICS (2011) 336 ITR 68 (DEL). TO THE SIMILAR EFFECT IS ALSO THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SANDHYA P. NAIK178 CTR 448 (BOM). 11. IN LIGHT OF THE AFORESAID DISCUSSION, WE MAY N OW EXAMINE THE SEQUENCE OF EVENTS IN THE PRESENT CASE IN ORDER TO DETERMINE WHETHER OR NOT THE PANCHNAMA OF 6.2.1998 IS OF THE TYPE MENTIONED IN THE EXPLANATION 2(A) TO SECTION 158BE(1) OF THE ACT. FROM THE FACT SITUATION NOTED BY US IN THE EARLIER PARAGRAPH S, IT IS CLEAR THAT THE PANCHNAMA OF 6.2.1998 DOES NOT REVEAL THAT ANYT HING WAS SEIZED ON THAT DATE. IT ALSO REVEALS THAT NOTHING W AS FOUND ON THAT DATE. IN FACT, THE ONLY EVENT THAT TOOK PLACE ON 06 .02.1998 WAS REVOKING OF THE EARLIER PLACED RESTRAINT ORDER RELA TING TO SHARE CERTIFICATES, 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 13.1.1998. 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 13.1.1998 WAS VACATED. FACTUALLY SPEAKING, T HE AFORESAID POSITION IS NOT IN DISPUTE. THESE CIRCUMSTANCES SHO WS THAT NO SEARCH WAS CARRIED OUT ON 6.2.1998, THEREFORE IT HA S TO BE UNDERSTOOD THAT THE PANCHNAMA DATED 6.2.1998 WOULD NOT REFLECT THE CONCLUSION OF SEARCH OR EXECUTION OF THE LAST OF THE 13 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) AUTHORIZATIONS FOR SEARCH DATED 8.12.1997 WITHIN THE MEANING OF SECTION 158BE(1) OF THE ACT. IN FACT, IN THE PANCHN AMA DATED 13.1.1998, THOUGH IT IS MENTIONED THAT THE SEARCH H AS BEEN .TEMPORARILY CONCLUDED FOR THE DAY TO BE COMMENC ED SUBSEQUENTLY, BUT THE SAME DOES NOT MAKE ANY DIFFER ENCE BECAUSE FACTUALLY SPEAKING, NO FURTHER SEARCH WAS CONDUCTED AFTER 13.1.1998 AT THE ROTUNDA BUILDING THEREFORE, IT IS THE PANCHNAMA OF 13.1.1998 WHICH IS RELATABLE TO THE CONCLUSION O F SEARCH AT THE ROTUNDA BUILDING AND NOT THE PANCHNAMA OF 6.2.1998. IN VIEW OF THE AFORESAID DISCUSSION, IT HAS TO BE INFERRED THA T THE PANCHNAMA OF 6.2.1998 CANNOT BE UNDERSTOOD AS A PANCHNAMA OF TYPE MENTIONED IN EXPLANATION 2(A) TO SECTION 158BE(1) O F THE ACT. A NATURAL COLLORARY OF THE AFORESAID IS THAT THE PERI OD OF LIMITATION PRESCRIBED IN SECTION 158BE(1) OF THE ACT FOR PASSI NG THE BLOCK ASSESSMENT ORDER U/S. 158BC OF THE ACT IN THE PRESE NT CASE CANNOT BE COMPUTED BY CONSIDERING THE PANCHNAMA OF 6.2.199 8 AS EXECUTION OF THE LAST OF THE AUTHORIZATIONS FOR SEA RCH INITIATED BY THE AUTHORIZATION U/S 132 DATED 8.12.1997. 12. APART FROM THE AFORESAID PROCEEDINGS, SEARCH OP ERATIONS WERE ALSO CARRIED OUT AT TWO OTHER PREMISES I.E. AT SONA WALA BUILDING AND AT KRISHNA NIWAS. THE SEARCH OPERATIONS AT THESE PR EMISES CAME TO AN END ON 16.1.1998 AND 8.1.1998 RESPECTIVELY AS IS REVEALED BY THE PANCHNAMAS ON RECORD. IN ANY CASE, ON THESE AS PECTS, THERE IS NO DISPUTE BETWEEN THE ASSESSEE AND THE REVENUE. TH EREFORE, IT HAS 14 IT(SS) NO. 20/MUM/2011 (BLOCK PERIOD 1.4.1987 TO 8.12.1997) 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 PURPOSE OF SECTION 158BE(1)(B) OF THE ACT. CONSIDER ED IN THE SAID LIGHT, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 23.2.2000 IS BEYOND THE PERIOD OF LIMITATION PRESCR IBED IN SECTION 158BE(1)(B) OF THE ACT. AS A CONSEQUENCE THE ASSESS MENT ORDER DATED 23.2.2000 IS UNTENABLE IN THE EYES OF THE LAW AND IT IS HEREBY QUASHED. THUS, ASSESSEE SUCCEEDS IN ITS GROUND OF A PPEAL NO. 3. 13. RESULTANTLY, ASSESSEE SUCCEED IN THE CAPTIONED PROCEEDINGS AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY 2015 SD/- SD/- (AMIT SHUKLA) (G.S. PANNU) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER ) MUMBAI DATED 29-05-2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI