M/s. Mani & Money Limited, CHENNAI V. DCIT, CHENNAI

ITSSA 55/CHNY/2007

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8769 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 11 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-12-2012
• Assessment Year: misc
• Appeal Filed On: 14-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: N DEVANATHAN
• Keywords: Depreciation; Search and seizure; Document seized; Period of limitation; Competent authority; Block assessment; Time period of passing order; Revised return; Documents seized
• Section: 143(3); 32; 147; 148; 132; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT ME MBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER IT(SS)A NO.55/MDS/2007 (BLOCK PERIOD : 1.4.90 TO 31.3.2000 & 1.4.2000 TO 4 .5.2000) M/S. MANI & MONEY LTD. 39, BAZULLAH ROAD, T.NAGAR, CHENNAI-600 017. PAN: AAACM6893N VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I(3) CHENNAI-600 006. (APPELLANT) (RESPONDENT) IT(SS)A NO.56/MDS/2007 (BLOCK PERIOD : 1.4.90 TO 31.3.2000 & 1.4.2000 TO 4 .5.2000) MR. S. SUBRAMANIAN, 19, ELDAMS ROAD, TEYNAMPET, CHENNAI-600 018. PAN: GI NO.125435-S (APPELLANT ) & VS. DEPUTY COMMISSIONER O F INCOME TAX, CENTRAL CIRCLE-I(3) CHENNAI-600 006. (RESPONDENT) IT(SS)A NO.76/MDS/2007 (BLOCK PERIOD : 1.4.90 TO 31.3.2000 & 1.4.2000 TO 4 .5.2000) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I(3) CHENNAI-600 006. VS. M/S. MANI & MONEY LTD. 39, BAZULLAH ROAD, T.NAGAR, CHENNAI-600 017. PAN: AAACM6893N (APPELLANT ) (RESPONDENT) ASSESSEE BY : MR N.DEVANATHAN, ADVOCATE REVENUE BY : DR. S.MOHARANA, CIT DR DATE OF HEARING : 20 TH DECEMBER, 2012 DATE OF PRONOUNCEMENT : 14 TH FEBRUARY, 2013 O R D E R PER BENCH: ITA NO.56/MDS/2007:- THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING THE ORDER OF CIT(A)-I, CHENNAI DATED 28.12.2006. IT(SS)A.55, 56 & 76/MDS/2007 2 2. THE BRIEF FACTS OF THE CASE ARE THAT SEARCH UNDE R SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS THE ACT) WAS CONDUCTED AT THE PREMISES OF SHRI V.R.VENKATACHALAM ON 25.11.1999 AND CONSEQUENT TO THE SEARCH, A SEARCH WAS ALSO CONDUCTED AT THE PREMISES OF THE ASSESSEE I.E. 9, PRAKASAM STREET, T.NAGAR, CHENNAI . THE SAID SEARCH ENDED ON 4.5.2000. ANOTHER SEARCH W ARRANT AGAINST THE ASSESSEE TO SEARCH PREMISES AT 9, PRAKA SAM STREET, T.NAGAR WAS ISSUED AND THE SEARCH STARTED O N 4.5.2000 WHICH LASTED UPTO 28.8.2000. STATEMENT OF THE ASSESSEE WAS RECORDED ON VARIOUS DAYS. IN THE STAT EMENT DATED 28.8.2000, THE ASSESSEE OFFERED UNDISCLOSED I NCOME OF ` 4,99,09,785/-. THE BLOCK RETURN FOR THE PERIOD FROM 1.4.1990 TO 31.3.2000 AND 1.4.2000 TO 4.5.2000 WAS FILED BY THE ASSESSEE ON 15.6.2001 DISCLOSING INCOME OF ` 4,31,53,640/-. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 30.8.2002 MADE ADDITIONS UNDER VARIOUS HEADS AND HE LD THE UNDISCLOSED INCOME OF THE ASSESSEE AS ` 70,07,30,642/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(A). IT(SS)A.55, 56 & 76/MDS/2007 3 3. THE ASSESSEE, INTER-ALIA, ASSAILED THE ASSESSMEN T ORDER ON THE LEGAL/TECHNICAL GROUNDS: THE ABRIDGED GIST OF LEGAL GROUNDS RAISED BY ASSESSEE BEFORE THE CIT(A) ARE AS FOLLOWS:- I) NOTICE UNDER SECTION 158BC IS VOID, AB-INITIO; II) SEARCH CONDUCTED ON 4.5.2000 WHICH CONTINUED UPTO 20.8.2000 IS INVALID AS DURING THE SEARCH NO SEIZURE WAS MADE AND NO INCRIMINATING MATERIAL OR DOCUMENT WAS FOUND AGAINST THE ASSESSEE. III) CONSEQUENT TO THE FIRST SEARCH DATED 25.12.19 99 WHATEVER MATERIAL WAS SEIZED THEREIN AND THE UNDISCLOSED INCOME THEREOF BECOMES DISCLOSED INCOME IN SECOND SEARCH INITIATED ON 4.5.2000. IV) A SEARCH ON SEARCH IS NOT PERMISSIBLE UNDER THE PROVISIONS OF THE INCOME TAX ACT. DURING THE PENDENCY OF THE FIRST SEARCH, THE SECOND SEARCH PROCEEDINGS WERE INITIATED, THEREFORE THE SECOND SEARCH IS BAD IN LAW. IT(SS)A.55, 56 & 76/MDS/2007 4 V) IN CASE THERE IS NO SEIZURE WHETHER THERE CAN BE A VALID ASSESSMENT ORDER UNDER SECTION 158BC. 4. THE ASSESSEE RAISED ONLY TECHNICAL ISSUES BEFORE THE CIT(A). THE ASSESSEE DID NOT ARGUE THE CASE ON MERI TS. THE STAND OF THE ASSESSEE BEFORE THE CIT(A) WAS:- (I) THE DEPARTMENT GOT ALL THE INFORMATION THAT WE RE USED FO R MAKING THE IMPUGNED ASSESSMENT ORDER FROM THE SWORN STATEMENT OF THE APPELLANT DATED 23.12.'99. SINCE T HE BLOCK ASSESSMENT ORDER IS TO BE PASSED ON THE BASIS OF IN CRIMINATING DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND SI NCE THE ADDITIONS MADE IN THIS ASSESSMENT ORDER ARE BASED O N THE DOCUMENTS F I LED AT THE TIME OF RECORDING OF SWORN STATEMENT, THE ASSESSMENT MADE IS NOT A VALID ASSESSMENT ORDER : (II) EVEN PRESUMING THAT THE IMPUGNED ASSESSMENT ORDER I S MADE ON THE BASIS OF SEIZURE MADE DURING THE COURSE OF SEARCH, THE SEIZURE WAS MADE WITH THE WARRANTS ISSUED IN TH E NAME OF SHRI . V.R.VENKATACHALAM (HEREINAFTER REFERRED AS FIRST SE ARCH) AND SINCE THE DEPARTMENT CANNOT SEIZE ANY DOCUMENTS PERTAINING TO THE APPELLANT WITH THE WARRANT ISSUE D IN THE NAME OF SHRI V.R.VENKATACHALAM, THE SEIZURE OF DOCUMENTS PERTAINING TO THE APPELLANT ITSELF WAS NOT VALID; (III) EVEN IF THE SEIZURE IS VALID, THEN THE A . O SHOULD HAVE IN I TIATED PROCEEDINGS U/S. 158BD AND NOT U/S.158BC OF THE ACT; (IV) THE APPELLANT WAS SEARCHED WITH ONE MORE WARRA NT IN THE NAME OF THE APPELLANT (HEREINAFTER REFERRED AS SECOND SEARCH) AND SINCE THERE WAS NO SEIZURE DURING THE C OURSE OF SEARCH WITH THE WARRANT ISSUED IN THE NAME OF THE A PPELLANT, THE BLOCK ASSESSMENT IS NOT VALID; (V) THE FIRST SEARCH WAS UNNECESSARILY PROLONGED AND SUCH UNNECESSARILY PROLONGING SHOULD NOT BE TAKEN INTO ACCOUNT WHILE COMPUTING THE TIME LIMIT AVAILABLE FOR COMPLE TING THE ASSESSMENT. (VI) EVEN IF IT IS - PRESUMED THAT THE MATERIAL USED DURING THE COURSE OF ILLEGAL SEARCH CAN BE USED FOR MAKING THE ASSESSMENT, IT IS ARGUED THAT THE SAME CAN BE USED FOR MAKI NG ASSESSMENT U/S.L . 48 RWS 143(3) OF THE ACT AND NOT FOR MAKING BLOCK ASSESSMENT ORDER. IT(SS)A.55, 56 & 76/MDS/2007 5 5. ON THE ISSUES RAISED BEFORE THE CIT(A) THAT NO INCRIMINATING MATERIAL WAS SEIZED DURING THE SEARCH , THE CIT(A) GAVE DETAILED LIST OF IMMOVABLE PROPERTIES A CQUIRED BY THE ASSESSEE AND HIS FAMILY MEMBERS DURING THE PER IOD FROM JUNE, 1993 TO AUGUST, 1998. THE SAID DETAILS OF IMM OVABLE PROPERTIES WERE ALLEGEDLY OBTAINED DURING THE SEAR CH. THE CIT(A) HELD THAT THE CONTENTION OF THE ASSESSEE THA T ASSESSMENT ORDER IS BASED ONLY ON SWORN STATEMENT D ATED 23.12.1999 IS UNFOUNDED. 6. ON THE ISSUE OF ASSESSMENT ORDER UNDER SECTION 158BC, THE CIT(A) OBSERVED AS UNDER:- 18. NOW, THE QUESTION IS WHETHER THE ASSESSMENT HAS BEEN DONE ON THE BASIS OF EVIDENCE COLLECTED DURING THE COURSE OF FIRST SEARCH OR THE SECOND SEARCH. I HAVE ALREADY MENTIONED THAT SWORN STATEMENTS WERE RECORDED ON 19.7.'00, 21 . 7.'00, 24.7 . '00, 18.8.'00, 24.8.'00 AND 28.8.'0, WHEN THE APPEL L ANT HAS OFFERED A SUM OF RS . 4,70,09 , 785/- PLUS RS.29,00,000/- = IT(SS)A.55, 56 & 76/MDS/2007 6 RS . 4 , 99,09,785/-. ON GOING THROUGH THE VARIOUS ADDITIONS MADE IN THE ASSESSMENT ORDER, IT IS FOUND THAT THE ASSESSMENT WAS MADE MOSTLY ON THE BASIS OF THE SWORN STATEMENTS RECORDED ON THE ABOVE DATES. SINCE THE F I RST SEARCH WAS OVER BY 4 . 5 . '00, THE SWORN STATEMENTS RECORDED FROM 19.7.'00 TO 28.8.'00 CANNOT BE CONSIDERED AS SWORN STATEMENTS RECORDED DURING THE COURSE OF FIRST SEARCH. THE SWORN STATEMENTS CAN BE CONSIDERED AS STATEMENTS RECORDED DURING THE COURSE OF SECOND SEARCH ONLY. 19 . AS PER SECTION 158BB OF TH E - A CT, THE SEARCH ASSESSMENT HAS TO BE COM P LETED 'ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE A.O AND RELATABLE TO SUCH EVIDENCE'. NOW, THE QUESTION IS WHETHER THE EVIDENCE FOUND WHILE RECORDING SWORN STATEMENT FROM 19 . 7 . '00 TO 28 . 8.'00 CAN BE TAKEN AS THE BASIS FOR SEARCH ASSESSMENTS. IT HAS BEEN IT(SS)A.55, 56 & 76/MDS/2007 7 HELD IN THE CASE OF N . R.PAPER BOARDS VS CIT 234 ITR 733 (GUJ) THA T EVIDENCE COLLECTED BY THE AUTHORIZED OFFICER INCLUDES THE STATEMENT RECORDED BY THE A .O DURING THE COURSE OF SEARCH AND SEIZURE U/S.132(4) OF THE ACT. SINCE THE DDIT(LNV . ) WHO RECORDED THE SWORN STATEMENT FROM 19 . 7 . '00 TO 28.8.'00 WAS ALSO AN AUTHORIZED OFFICER AND SINCE THE SWORN STATEMENT RECORDED CAN BE TREATED AS SWORN STATEMENT RECORDED U/S . 132(4) (EVEN THOUGH THE DDIT (INV.) HAS MENT I ONED THE SAME A S S TAT E M EN T RECORDED U/S.1 3 1 ), I RE J ECT THE CONTENTION OF THE APPELLANT'S AR THAT T HE BLOCK ASSESSMENT ORDER PASSED BY THE A.O IS NOT VALID IN LAW . THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER DATED 28.12.2006 DISMISSED THE APPEA L OF THE ASSESSEE. AAGGRIEVED AGAINST THE ORDER OF TH E CIT(A), THE ASSESSEE HAS COME IN SECOND APPEAL BEFO RE THE TRIBUNAL. IT(SS)A.55, 56 & 76/MDS/2007 8 7. SHRI N.DEVANATHAN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE BLOCK ASSESSMENT ORDER IS BARRED BY LIMITATION. THE ASSESSMENT ORDER HAS BEEN PASSED BEYOND THE TIME LIMIT AS MENTIONED IN SECTION 158BE. THE SEARCH PROCEEDINGS WERE UNNECESSARILY PROLONGED WITHOUT PROPER AUTHORIZATION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT INITIALLY SEARCH WAS CONDUCTED AT TH E PREMISES OF THE ASSESSEE WHICH STARTED ON 25.11.19 99 (11.00 AM) AND ENDED ON 4.5.2000(2.00 PM). AGAIN SECOND SEARCH WAS CONDUCTED DURING THE PENDENCY OF THE FIRST SEARCH IN THE PREMISES OF THE ASSESSEE WH ICH STARTED ON 4.5.2000(11.45 AM) AND CONTINUED UPTO 20.8.2000 (12.00 PM). THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SECOND SEARCH IS NOT VALID DURIN G THE PENDENCY OF THE FIRST SEARCH AND AS PER THE PROVISI ONS OF THE INCOME TAX ACT, SEARCH ON SEARCH IS NOT PERMISS IBLE. THEREFORE, NOTICE ISSUED TO THE ASSESSEE UNDER SECT ION 158BC IS INVALID AND VOID AB-INITIO. IT(SS)A.55, 56 & 76/MDS/2007 9 8. THE COUNSEL PLACED ON RECORD PAPER BOOK CONTAINING CERTAIN STATEMENTS OF THE ASSESSEE, PANCHANAMA, PROHIBITORY ORDERS ETC. THE COUNSEL FOR THE ASSESSEE REFERRED TO PANCHANAMAS AT PAGE 49 AND 53 TO SHOW THAT THE SEARCH WAS CONDUCTED AT THE PREMI SES OF THE ASSESSEE ON DIFFERENT DATES. THE COUNSEL FOR THE ASSESSEE ALSO REFERRED TO PROHIBITORY ORDERS AT PAG E 7 AND 8 DATED 25.11.1999, PAGE 48 DATED 19.4.2000 AN D PAGE 52 DATED 19.4.2000. THE COUNSEL FOR THE ASSESS EE POINTED OUT THAT IN ALL THE PROHIBITORY ORDERS ALMO ST SIMILAR COMMENTS HAVE BEEN MENTIONED I.E. CONTENTS OF LOCKER INSIDE THE GREY COLOUR GODREJ STEEL ALMIRAH KEPT IN THE OFFICE OF M/S. MANI & MONEY LTD. IN THE GROUND FLOOR AT NO.9, PRAKASAM STREET, T.NAGAR, CHENNAI-17. LOCKER HAS BEEN LOCKED AND SEVEN SEALS PLACED ON IT. KEY OF THE LOCKER WAS HANDED OVER TO MR. SHANMUGARAJ, DIRECTOR M/S. MANI & MONEY LTD.. IT(SS)A.55, 56 & 76/MDS/2007 10 THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE ENTIRE PERIOD STARTING FROM 25.11.99 TO 4.5.2000 WH ICH INCLUDE THE PERIOD OF BOTH THE SEARCH NO INCRIMINA TING DOCUMENT OR EVIDENCE WAS SEIZED FROM THE ASSESSEE AND ONLY STATEMENTS WERE RECORDED. THEREAFTER, DURING THE PENDENCY OF THE FIRST SEARCH NOTICE UNDER SECTION 158BC WAS ISSUED TO THE ASSESS EE AND ANOTHER SEARCH WAS INITIATED ON 4.5.2000. DURIN G THE SECOND SEARCH, AGAIN NO INCRIMINATING EVIDENCE WAS SEIZED FROM THE PREMISES OF THE ASSESSEE AND ONLY STATEMENTS WERE RECORDED ON 19.7.2000, 21.7.2000, 24.7.2000, 18.08.2000, 24.08.2000 AND 28.08.2000. T HE COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT MER ELY FOR RECORDING THE STATEMENTS, PROCEEDINGS WERE UNNECESSARILY PROLONGED AGAINST THE ASSESSEE. THE PROCEEDING UNDER SECTION 158BC IS NOT THE CORRECT COURSE, WHEN THERE IS NO SEIZURE, THE ASSESSMENT UN DER THE SAID PROVISIONS CANNOT BE HELD TO BE VALID. 9. ON THE OTHER HAND, DR. S.MOHARANA APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT THE ASSESSEE DID IT(SS)A.55, 56 & 76/MDS/2007 11 NOT FILE RETURN OF INCOME FOR THE YEARS 1994-95, 19 95-96 TO 1999-2000 AND THIS FACT HAS BEEN ADMITTED BY TH E ASSESSEE. THE LEARNED DR FURTHER STATED THAT THE OR AL EVIDENCE I.E. THE STATEMENT RECORDED DURING SEARCH PROCEEDINGS IS PART OF EVIDENCE. THE DR CONTENDED T HAT SINCE STATEMENTS WERE RECORDED DURING THE SEARCH PROCEEDINGS, THE LAST PROHIBITORY ORDER IS VALID A ND THE ASSESSMENT PROCEEDINGS ARE NOT BARRED BY LIMITATION . THE D.R. FURTHER CONTENDED THAT IT WAS NOT POSSIBLE TO COMPLETE THE SEARCH ON ONE DAY AND THEREFORE PROHIBITORY ORDERS WERE ISSUED FROM TIME TO TIME AN D SEARCH WAS CONCLUDED ON 28.8.2000. 10. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES AND HAVE GONE THROUGH THE DOCUMENTS ON RECO RD. THE PRIMARY QUESTION WHICH HAS TO BE ANSWERED FIRS T IN THE PRESENT CASE IS WHETHER THE ASSESSMENT ORDER HAS BEEN PASSED WITHIN THE PERIOD OF LIMITATION? IF THE ANSWER TO THE FIRST QUESTION IS IN AFFIRMAT IVE, THEN THE NEXT QUESTION WOULD BE: IT(SS)A.55, 56 & 76/MDS/2007 12 IF THERE IS NO SEIZURE OF ANY INCRIMINATING DOCUMENTS/EVIDENCE, WHETHER THERE CAN BE A VALID ASSESSMENT ORDER UNDER SECTION 158BC? 11. BEFORE ADVERTING TO DECIDE THESE ISSUES, IT IS ESSENTIAL TO SEE THE PROVISIONS OF SECTION 158BB, 158BC & 158BE OF THE ACT. THE RELEVANT EXTRACT OF THE PROVISIONS ARE REPRODUCED HEREIN BELOW:- 158BB. COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PER IOD: (1) THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHAL L BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN T HE BLOCK PERIOD COMPUTED, [IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE], AS REDUCED BY THE AGGR EGATE OF THE TOTAL INCOME, OR AS THE CASE MAY BE, AS INCREASED BY THE AGGREGATE O F THE LOSSES OF SUCH PREVIOUS YEARS, DETERMINED, ( A ) WHERE ASSESSMENTS UNDER SECTION 143 OR SECTION 14 4 OR SECTION 147 HAVE BEEN CONCLUDED [PRIOR TO THE DATE OF COMMENCEMENT O F THE SEARCH OR THE DATE OF REQUISITION], ON THE BASIS OF SUCH ASSESSME NTS; ( B ) WHERE RETURNS OF INCOME HAVE BEEN FILED UNDER SEC TION 139 [OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148] BUT ASSESSMENTS HAVE NOT BEEN MADE TILL THE DATE OF SEA RCH OR REQUISITION, ON THE BASIS OF THE INCOME DISCLOSED IN SUCH RETURNS; [( C ) WHERE THE DUE DATE FOR FILING A RETURN OF INCOME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, ( A ) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH ENTRIES RES ULT IN COMPUTATION OF LOSS FOR ANY PREVIOUS YEAR FALLING I N THE BLOCK PERIOD; OR IT(SS)A.55, 56 & 76/MDS/2007 13 ( B ) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH INCOME DOES NOT EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX FOR ANY PREVIO US YEAR FALLING IN THE BLOCK PERIOD; ( CA ) WHERE THE DUE DATE FOR FILING A RETURN OF INCOME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, AS NIL , IN CASES NOT FALLING UNDER CLAUSE ( C );] ( D ) WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 HAS NOT EXPIRED, ON THE BASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NO RMAL COURSE ON OR BEFORE THE DATE OF THE SEARCH OR REQUISITION RELATI NG TO SUCH PREVIOUS YEARS; ( E ) WHERE ANY ORDER OF SETTLEMENT HAS BEEN MADE UNDER SUB-SECTION (4) OF SECTION 245D, ON THE BASIS OF SUCH ORDER; ( F ) WHERE AN ASSESSMENT OF UNDISCLOSED INCOME HAD BEE N MADE EARLIER UNDER CLAUSE ( C ) OF SECTION 158BC, ON THE BASIS OF SUCH ASSESSMENT . EXPLANATION .FOR THE PURPOSES OF DETERMINATION OF UNDISCLOSED INCOME, ( A ) THE TOTAL INCOME OR LOSS OF EACH PREVIOUS YEAR SH ALL, FOR THE PURPOSE OF AGGREGATION, BE TAKEN AS THE TOTAL INCOME OR LOSS C OMPUTED IN ACCORDANCE WITH THE PROVISIONS OF [THIS ACT] WITHOUT GIVING EF FECT TO SET OFF OF BROUGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABSORBED DEPRE CIATION UNDER SUB- SECTION (2) OF SECTION 32: [ PROVIDED THAT IN COMPUTING DEDUCTIONS UNDER CHAPTER VI-A FOR THE PURPOSES OF THE SAID AGGREGATION, EFFECT SHALL BE G IVEN TO SET OFF OF BROUGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABSORB ED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32;] [( B ) OF A FIRM, RETURNED INCOME AND TOTAL INCOME ASSES SED FOR EACH OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD SHAL L BE THE INCOME DETERMINED BEFORE ALLOWING DEDUCTION OF SALARY, INT EREST, COMMISSION, BONUS OR REMUNERATION BY WHATEVER NAME CALLED [TO A NY PARTNER NOT BEING A WORKING PARTNER] : PROVIDED THAT UNDISCLOSED INCOME OF THE FIRM SO DETERMINED S HALL NOT BE CHARGEABLE TO TAX IN THE HANDS OF THE PARTNERS, WHE THER ON ALLOCATION OR ON ACCOUNT OF ENHANCEMENT;] IT(SS)A.55, 56 & 76/MDS/2007 14 ( C ) ASSESSMENT UNDER SECTION 143 INCLUDES DETERMINATI ON OF INCOME UNDER SUB- SECTION (1) OR SUB-SECTION (1B) OF SECTION 143. 158BC. PROCEDURE FOR BLOCK ASSESSMENT: WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 1 32 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER S ECTION 132A, IN THE CASE OF ANY PERSON, THEN, [( A ) THE ASSESSING OFFICER SHALL ( I ) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUN T OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED AFTER THE 30TH DAY OF J UNE, 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS; ( II ) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUN T OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED ON OR AFTER T HE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIR ING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEE N DAYS BUT NOT MORE THAN FORTY-FIVE DAYS, AS MAY BE SPECIFIED IN THE NOTICE A RETURN IN THE P RESCRIBED FORM AND VERIFIED IN THE SAME MANNER AS A RETURN UNDER C LAUSE ( I ) OF SUB- SECTION (1) OF SECTION 142, SETTING FORTH HIS TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD : PROVIDED THAT NO NOTICE UNDER SECTION 148 IS REQUIRED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDER THIS CHAPTER : PROVIDED FURTHER THAT A PERSON WHO HAS FURNISHED A RETURN UNDER THIS CLAUSE SHALL NOT BE ENTITLED TO FILE A REVISED RETURN;] ( B ) THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECT ION 158BB AND THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 143 [, SECTION 144 AND SECTION 145] SHALL, SO FAR AS MAY B E, APPLY; ( C ) THE ASSESSING OFFICER, ON DETERMINATION OF THE UN DISCLOSED INCOME OF THE BLOCK PERIOD IN ACCORDANCE WITH THIS CHAPTER, SHALL PASS AN ORDER OF ASSESSMENT AND DETERMINE THE TAX PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT; IT(SS)A.55, 56 & 76/MDS/2007 15 [( D ) THE ASSETS SEIZED UNDER SECTION 132 OR REQUISITIO NED UNDER SECTION 132A SHALL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 132B.] 158BE. TIME LIMIT FOR COMPLETION OF BLOCK ASSESSMENT: [(1) THE ORDER UNDER SECTION 158BC SHALL BE PASSED ( A ) XXXXXXX ( B ) WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHI CH THE LAST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, WAS EXECUTED IN C ASES WHERE A SEARCH IS INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED ON OR AFTER THE 1ST DAY OF JANUARY, 1 997. 12. IT IS AN ADMITTED FACT THAT SEARCH WAS CONDUCTE D AT THE PREMISES OF THE ASSESSEE TWICE. THE FIRST SEARC H WAS CONDUCTED CONSEQUENT TO THE SEARCH IN THE CASE OF S HRI V.R. VENKATACHALAM ON 25.11.1999 WHICH CONCLUDED ON 4.5.2000 AND THE SECOND SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE WHICH STARTED ON 4.5.2000 AND CONCLUDED ON 28.8.2000. THE ASSESSEE HAS PLACED ON RECORD PROHIBITORY ORDERS DATED 25.12.1999 WHICH IS AT PAGE 7 OF THE PAPER BOOK. THE ENDORSEMENT MADE THEREIN IS RECORDED IN PARA 8 HEREIN ABOVE. ANOTHER PROHIBITORY ORDER DATED 25.2.2000 PLACED ON RECORD AT IT(SS)A.55, 56 & 76/MDS/2007 16 PAGE 8 OF THE PAPER BOOK WHEREIN THE FOLLOWING ENDORSEMENT HAS BEEN MADE:- CONTENTS OF LOCKER INSIDE THE GODREJ STEEL ALMIRAH KEPT IN THE GROUND FLOOR OF THE PREMISES OF M/S. MANI & MONEY LTD. AT NO.9, PRAKASAM STREET, T.NAGAR, CHENNAI-17. SEALS PLACED ON 25.12.99 ARE RETAINED. THESE PROHIBITORY ORDERS RELATE TO FIRST SEARCH. THEREAFTER, THE SECOND SEARCH COMMENCED IN THE PREMISES OF THE ASSESSEE ON 4.5.2000. PANCHANAMA AND PROHIBITORY ORDERS RELATING THERETO ARE AT PAG E 45 TO 48 OF THE PAPER BOOK. A PERUSAL OF THE PANCHANAMA SHOWS THE DATE OF AUTHORIZATION AS 19.4.2000 AND TH E ENDORSEMENT MADE IN THE PROHIBITORY ORDERS IS AS FOLLOWS:- CONTENTS OF GREY COLOUR GODREJ SAFE KEPT IN THE GROUND FLOOR OF THE OFFICE OF M/S. MANI & MONEY LTD. AT NO.9, PRAKASAM STREET, T.NAGAR, CHENNAI-17. SAFE HAS BEEN LOCKED IT(SS)A.55, 56 & 76/MDS/2007 17 AND SEALS ( 4 SEALS PLACED). KEYS TAKEN POSSESSION BY THE DEPARTMENT. 13. SEARCH WAS AGAIN CONDUCTED IN THE PREMISES OF T HE ASSESSEE ON 30.6.2000. PANCHANAMA RELATING THERETO IS AT PAGE 49 TO 51 OF THE PAPER BOOK. SIMILAR REMARKS AS AFOREMENTIONED WERE RECORDED IN THE PROHIBITORY ORD ERS DATED 30.6.2000 AT PAGE 53 TO 55 OF THE PAPER BOOK. LAST PANCHANAMA DATED 28.08.2000 IS PLACED ON RECOR D WHICH SHOWS THAT SEARCH HAS CONCLUDED. A PERUSAL OF THE AFORESAID PANCHANAMAS DATED 4.5.2000, 30.6.2000 AND 28.8.2000 SHOW THAT ONLY IN PANCHANAMA DATED 4.5.20 00 DATE OF AUTHORIZATION IS MENTIONED AS 19.04.2000 AN D IN THE REMAINING TWO PANCHANAMAS, IT IS MENTIONED THAT THE SEARCH IS IN CONTINUATION OF THE PREVIOUS PROCE EDINGS. SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSE E UNDER THE PROVISIONS OF SECTION 132. THE PROVISIONS OF SUB-SECTION (3) OF SECTION 132, EMPOWERS THE AUTHO RIZED OFFICER TO SEIZE AND SEARCH ANY SUCH BOOKS OF ACCOU NT , OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER IT(SS)A.55, 56 & 76/MDS/2007 18 VALUABLE ARTICLES OR THING IN THE POSSESSION OF THE ASSESSEE OR PERSON IN POSSESSION OR CONTROL THEREO F. THE RELEVANT EXTRACT OF SUB-SECTION (3) IS REPRODUC ED HEREIN BELOW:- 132 (3) THE AUTHORISED OFFICER MAY, WHERE IT IS NO T PRACTICABLE TO SEIZE ANY SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS , MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG, [FOR REASONS OTHER THAN THOSE MENTIONED IN THE SECOND PROVISO TO SUB-SECTION (1),] SERVE AN ORDER ON THE OWNER OR THE PERSON WHO IS IN IMMEDIATE POSSESSION OR CONTROL THEREOF THAT HE SHA LL NOT REMOVE, PART WITH OR OTHERWISE DEAL WITH IT EXCEPT WITH THE PREVIOUS PERMISSION OF SUCH OFFICER AND SUCH OFFICER MAY TAK E SUCH STEPS AS MAY BE NECESSARY FOR ENSURING COMPLIANCE WITH THIS SUB-SECTION. [ EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT SERVING OF AN ORDER AS AFORESAID UNDER THIS SU B-SECTION SHALL NOT BE DEEMED TO BE SEIZURE OF SUCH BOOKS OF ACCOUN T, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING UNDER CLAUSE ( III ) OF SUB-SECTION (1).] 14. THE PROVISIONS OF SUB-SECTION (8A) OF SECTION 1 32 MAKES IT CLEAR THAT AN ORDER PASSED UNDER SUB-SECTI ON (3) SHALL NOT BE IN FORCE FOR A PERIOD EXCEEDING SI XTY DAYS FROM THE DATE OF THE ORDER. IN THE INSTANT CASE, TH E AFOREMENTIONED AUTHORIZATION FOR SEARCH WAS SOUGHT ON 19.4.2000. ON THE BASIS OF THE SAID AUTHORIZATION S EARCH IT(SS)A.55, 56 & 76/MDS/2007 19 WAS CONDUCTED ON 4.5.2000, PROHIBITORY ORDERS UNDER SECTION 132(3) WERE PASSED ON THE SAME DATE. AS PER THE RECORDS, NO DOCUMENT, BOOKS OF ACCOUNTS ETC. WE RE SEIZED OR TAKEN INTO POSSESSION. ONLY ONE SAFE IN T HE GODREJ ALMIRAH WAS SEALED. THE PERIOD OF SIXTY DAY S ENDED ON 18.6.2000. THE COMPETENT AUTHORITY HAS NEITHER ISSUED FRESH AUTHORIZATION NOR HAS RE-VALID ATED THE AFORESAID AUTHORIZATION. EVEN IN SUBSEQUENT PANCHANAMAS DATED 30.06.2000 AND 20.08.2000, THERE IS NO MENTION ABOUT FRESH AUTHORIZATION. THEY ONLY MENTIONED THAT SEARCH IS IN CONTINUATION OF THE PRE VIOUS PROCEEDINGS. IT WOULD NOT BE OUT OF PLACE TO MENTIO N HERE THAT THE SEARCH LASTED FOR MORE THAN FOUR MONTHS. B UT NO INCRIMINATING DOCUMENTS WERE SEIZED DURING THE SEAR CH. EVEN IN THE PROHIBITORY ORDERS, SIMILAR ENDORSEMENT S WERE MADE. AS PER THE REMARK IN PROHIBITORY ORDERS THE KEYS OF THE SAFE WERE TAKEN BY THE DEPARTMENT. NO PLAUSIBLE REASON HAS BEEN GIVEN AS TO WHY THE SAFE COULD NOT BE OPENED FOR SUCH A LONG TIME AND WHY SEARCH COULD NOT BE COMPLETED WITHIN THE AFORESAID IT(SS)A.55, 56 & 76/MDS/2007 20 PERIOD OF SIXTY DAYS. THE DEPARTMENT CANNOT PROLONG THE SEARCH AT ITS OWN WHIMS AND FANCIES IN AN ARBITRARY AND UNJUSTIFIED MANNER PUTTING THE ASSESSEE TO INCONVENIENCE AND AVOIDABLE HARASSMENT. THE TOTAL PERIOD OF SEARCH IN THE CASE OF ASSESSEE LASTED FOR MORE THAN NINE MONTHS THAT IS FROM 25.11.1999 TO 4.5.200 0 AND AGAIN FROM 4.5.2000 TO 28.8.2000 WHICH IS MUCH BEYOND REASONABLE TIME. THE AUTHORIZATION STARTS WI TH ITS ISSUE AND ENDS WITH ITS EXECUTION BY THE OFFICIALS. THE SEARCH COMES TO AN END WHEN THE SEARCH PARTY LEAVES THE PREMISES AFTER CARRYING WITH THEM SEIZED MATERI ALS. THE SEARCH PARTY COULD HAVE ENTERED THE PREMISES OF THE ASSESSEE THEREAFTER ONLY FOR THE LIMITED PURPOSE OF OPENING THE SEALED ALMIRAH AND TAKE THE DOCUMENTS E TC. THEREFROM. 15. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF C. RAMAIAH REDDY VS. ACIT REPORTED AS 339 ITR 210 (KARN) HAS HELD THAT THERE IS NO PROVISION IN THE C RIMINAL PROCEDURE CODE OR IN THE INCOME TAX ACT FOR POSTPON ING IT(SS)A.55, 56 & 76/MDS/2007 21 THE SEARCH FOR SUCH A LONG PERIOD. THE RELEVANT EXT RACT OF THE JUDGEMENT IS REPRODUCED HEREIN BELOW:- THE LIFE OF THE AUTHORISATION STARTS WITH ITS ISSU E AND ENDS WITH ITS EXECUTION BY THE OFFICIALS RESULTING IN SEIZURE OF BOOKS, DOCUMENTS, MONEY AND SO ON. THE SEARCH IS TO BE CARRIED OUT AT ONE STRETCH AND COMPLETED. THE SEARCH COMES TO AN END WHEN THE SEAR CH PARTY LEAVES THE PREMISES AFTER CARRYING WITH THEM THE SEIZED MATERI AL. AS SOON AS THE SEARCH PARTY LEAVES THE PREMISES, THE AUTHORISATION FOR SEARCH IS FULLY IMPLEMENTED UPON AND EXECUTION IS COMPLETE. THEY HA D EXHAUSTED THE POWER UNDER THE AUTHORISATION TO CARRY OUT THE SEAR CH. OTHERWISE, IT WOULD LEAD TO A SITUATION WHERE ONCE A PERSON IS SE ARCHED, HIS PREMISES IS CONTINUOUSLY OPEN FOR THE OFFICERS TO SEARCH DES PITE THE FACT THAT THE SEARCH PARTY IS UNABLE TO FIND ITEM THAT REPRESENTS UNDISCLOSED INCOME. THEN THE WORD 'SEARCH' USED IN THE CONTEXT LOSES IT S MEANING. THE SEARCH PRE-SUPPOSES THAT THE ASSESSEE IS IN POSSESS ION OF SOME UNDISCLOSED INCOME OR OTHER MATERIAL AND THE AUTHOR ITIES WANT TO LAY THEIR HAND ON SUCH UNDISCLOSED INCOME OR OTHER MATE RIAL. ONCE THE SEARCH COMMENCES AND IF IT IS ADJOURNED FOR A LATER DATE, WITHOUT COMPLETING THE SEARCH ON THE ADJOURNED DATE IF THE SEARCH RECOMMENCES, IT CEASES TO BE A SEARCH IN THE CONTEXT IN WHICH TH E SAID WORD IS USED IN SECTION 132 OF THE ACT. THE SECOND PROVISO TO SECTION 132(1) DEALS WITH THE 'DEEMED SEIZURE'. WHEN IN THE COURSE OF SEARCH, IT IS NOT POSSIBLE TO SEIZE FOR THE REASONS SET OUT IN THE AFORESAID PROVISIONS. IT IS POSSIBLE UNDER FOUR CIRCUMSTANCES: (A) WHERE IT IS NOT POSSIBLE OR PRACTICABLE TO TAKE PHYSICAL POSSESSION OF ANY VALUABLE ARTICLE OR THING ; (B) REMOVE IT TO A SAFE PLACE DUE TO ITS VOLUME, WE IGHT ; (C) OTHER PHYSICAL CHARACTERISTICS ; AND (D) DUE TO BEING ITS DANGERS NATURE. THEREFORE, THE LAW RECOGNIZES SUCH A SITUATION AND HAS PROVIDED A REMEDY TO TACKLE SUCH PROBLEMS. THE AUTHORISED OF FICER HAS BEEN GIVEN A DISCRETION FOR THE REASONS TO BE RECORDED IN WRIT ING TO PASS A RESTRAINT ORDER IN RESPECT OF THE ARTICLES, BOOKS AND OTHER M ATERIAL WHICH HE COULD NOT TAKE PHYSICAL POSSESSION OF, I.E., BY MAKING AN INVENTORY AND LEAVING IT TO THE CUSTODY OF THE ASSESSEE AND DIRECTING HIM NOT TO PART WITH THE SAME WITH-OUT HIS PERMISSION. SIMILARLY, IN CIRCUMSTANCES NOT COVERED UNDER THOSE PROVISIONS, IT IS OPEN FOR HIM TO PASS A PROHIBITORY ORDER UNDE R SUB-SECTION (3) NOT AMOUNTING TO SEIZURE WHICH ORDER WILL BE IN FORCE F OR A PERIOD OF 60 IT(SS)A.55, 56 & 76/MDS/2007 22 DAYS AFTER SECURING THE POSSESSION OF THE MATERIALS , ARTICLES, ETC., IN THE AFORESAID MANNER. ACTION UNDER SECTION 132(3) OF TH E INCOME-TAX ACT CAN BE RESORTED TO ONLY IF THERE IS ANY PRACTICAL D IFFICULTY IN SEIZING THE ITEM WHICH IS LIABLE TO BE SEIZED. WHEN THERE IS NO SUCH PRACTICAL DIFFICULTY THE OFFICER IS LEFT WITH NO OTHER ALTERN ATIVE BUT TO SEIZE THE ITEM, IF HE IS OF THE VIEW THAT IT REPRESENTED UNDISCLOSE D INCOME. POWER UNDER SECTION 132(1)(III) OF THE INCOME-TAX ACT THUS CANN OT BE EXERCISED, SO AS TO CIRCUMVENT THE PROVISIONS OF SECTION 132(1)(III) READ WITH SECTION 132(1)(V) OF THE INCOME-TAX ACT. IT IS OPEN FOR THE AUTHORISED OFFICER TO VISIT THE PLACE FOR THE PURPOSE OF INVESTIGATION SE CURING FURTHER PARTICULARS. UNDER THE SCHEME, THE LAW PROVIDES FOR SUCH PROCEDURE. BUT NOT WHEN HE VISITS THE PREMISES FOR FURTHER INVESTI GATION FOR THE MATERIALS ALREADY SECURED. IT DOES NOT AMOUNT TO SE ARCH AS THE MATERIALS TO BE LOOKED INTO AND INVESTIGATED IS ALREADY KNOWN AND IS THE SUBJECT- MATTER OF A PROHIBITORY ORDER OR A RESTRAINT ORDER. THOUGH IT IS NOT SEIZURE OR DEEMED SEIZURE, IT AMOUNTS TO DEEMED POS SESSION. WHAT IS IN YOUR POSSESSION IS TO BE LOOKED INTO TO FIND OUT, I S THERE ANY INCRIMINATING MATERIAL. IT DOES NOT AMOUNT TO SEARC H AS UNDERSTOOD UNDER SECTION 132 OF THE ACT. IT IS ONLY BECAUSE OF PAUCITY OF TIME HE HAS GONE BACK AND WANTS TO COME BACK AND LOOK INTO THE MATTER LEISURELY. THERE IS NO PROVISION IN THE CRIMINAL PROCEDURE COD E OR IN THE INCOME- TAX ACT OR THE RULES FOR POSTPONING THE SEARCH FOR A LONG PERIOD. THEN, THE CONCEPT OF SEARCH AS UNDERSTOOD EITHER UNDER TH E PROVISIONS OF THE CRIMINAL PROCEDURE CODE OR THE ACT WHICH ARE MADE A PPLICABLE EXPRESSLY, WOULD LOSE ITS MEANING. IF SUCH A COURSE IS ATTRACTED, IT IS OPEN TO AN AUTHORISED OFFICER TO KEEP THE AUTHORISA TION IN HIS POCKET LIKE A SEASON TICKET AND GO ON VISITING THE PREMISES ACC ORDING TO HIS WHIMS AND FANCIES. IT SERIOUSLY AFFECTS THE VALUABLE RIGH T OF THE ASSESSEE CONFERRED UNDER THE CONSTITUTION. TO KEEP THE AFFEC TED PARTIES IN A SUSPENDED ANIMATION ABOUT THE PROBABLE CONTINUATION OF SEARCH WOULD BE AGONISING. IT IS INVADING THE RIGHT AND FREEDOM OF THE PETITIONERS FOR A PERIOD MORE THAN REQUIRED OR NECESSARY. THE ORDERS WHICH ARE PASSED UNDER SECTION 132(3) MAY HAVE A VERY FAR-REACHING E FFECT ON THE BUSINESS OF AN ASSESSEE. THE ORDER OF RESTRAINT MAY ADVERSELY AFFECT THE BUSINESS AND, THEREFORE, ADEQUATE SAFEGUARDS ARE SO UGHT TO BE PROVIDED IN THE ACT BY THE INSERTION OF THE PROVISIONS OF SU B-SECTION (8A) IN SECTION 132. IN ORDER THAT THE RESTRAINT ORDER MUST NOT BE CONTINUED INDEFINITELY, SUB-SECTION (8A) OF SECTION 132 PROVI DES THAT THE RESTRAINT ORDER CAN BE CONTINUED ONLY IF, BEFORE THE EXPIRY O F 60 DAYS, AND FOR REASONS TO BE RECORDED, THE COMMISSIONER GRANTS AN EXTENSION. THE PROVISIONS OF SUB-SECTION (8A) CANNOT BE BYPASSED O R RENDERED NUGATORY BY REVOKING AN ORDER UNDER SECTION 132(3) AND, THER EAFTER, PASS ANOTHER ORDER ON THE SAME DATE. IN THE NATURE OF THINGS, TH E SEARCH IS TO BE DONE EXPEDITIOUSLY AND THE UNDISCLOSED INCOME IS TO BE U NEARTHED AND PROCEEDING HAS TO BE INITIATED AGAINST SUCH PERSON AND THE TAX IT(SS)A.55, 56 & 76/MDS/2007 23 LEGITIMATELY DUE TO THE GOVERNMENT IS TO BE RECOVER ED. THERE CANNOT BE ANY LAXITY ON THE PART OF THE AUTHORISED OFFICER IN THIS REGARD. ANY OTHER INTERPRETATION WOULD RUN COUNTER TO THE SCHEME OF S EARCH PROVISION UNDER THE ACT. THEREFORE, BY PASSING A RESTRAINT OR DER, THE TIME LIMIT AVAILABLE FOR FRAMING OF THE ORDER CANNOT BE EXTEND ED. ONCE AN ORDER UNDER SECTION 132(3) HAS BEEN PASSED, THEN THE LIMI TATION PERIOD COMMENCES AND SUCH ORDER CANNOT BE CONTINUED UNLESS AND UNTIL THE PROVISIONS OF SECTION 132(8A) ARE SATISFIED. 16. THE HONBLE MADRAS HIGH COURT IN TAX CASE APPEAL NO.1240 OF 2006 IN A.RAKESH KUMAR JAIN VS. JCIT DECIDED ON 25.9.2012 FOLLOWING THE AFOREMENTIO NED DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF C. RAMAIAH REDDY HAS HELD AS UNDER:- GOING BY THE FACTS HEREIN, VIZ. AS TO THE SEARCH COMPLETED ON 13.12.2001 WITH DRAWING OF THE PANCHANAMA AND THE SEARCH PARTY LEAVING THE PREMISES, THE MERE FACT THAT THE PANCHANAMA CONTAIN THE OBSERVATION THAT SEARCH CONTINUES PER SE WOULD NOT ENABLE THE SEARCH PARTY TO KEEP THE SEARCH IN A SUSPENDED ANIMATION TO CARRY ON THE SEARCH IN FUTURE DATE TO CONTEND THAT THE LIMITATION HAS TO BE WORKED OUT ON THE LAST PANCHANAMA DRAWN I.E. 15.02.2002 THUS CALCULATING THE LIMITATION FROM 15.02.2002. WE HAVE NO HESITATION IN ACCEPTING THE CASE OF THE ASSESSEE THAT THE LIMITATION ENDS ON 31.12.2003. THE CONTENTION OF THE REVENUE THAT THE LIMITATION HAS TO BE TAKEN AS 29.02.2004 DOES NOT GO WITH THE IT(SS)A.55, 56 & 76/MDS/2007 24 PROVISIONS OF THE ACT. IN SUCH CIRCUMSTANCES, THE TAX CASE APPEAL IS ALLOWED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL. NO COSTS. 17. POWER UNDER SECTION 132(3) OF THE ACT CANNOT BE EXERCISED IN AN ARBITRARY MANNER. BY PASSING A PROHIBITORY ORDER, THE TIME LIMIT AVAILABLE FOR FRA MING OF THE ORDER CANNOT BE EXTENDED. THE DEPARTMENT DOES N OT HAVE UNFETTERED POWERS TO PROLONG THE SEARCH WITHOU T JUSTIFICATION AND ISSUE PANCHANAMAS TO EXTEND THE PERIOD OF PASSING OF ASSESSMENT ORDER. 18. AS PER THE PROVISIONS OF SECTION 158BE, ORDER UNDER SECTION 158BC HAS TO BE PASSED WITHIN A PERIO D OF TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LA ST OF THE AUTHORIZATION FOR SEARCH ENDED UNDER SECTION 13 2 AND FOR REQUISITION UNDER SECTION 132A. IF THE LAW LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IS APPLIED IN THE PRESENT CASE, THE LIMITATION FOR PASSING THE ASSESSMENT ORDER COMES TO AN END ON 31.05.2002 BY TAKING INTO CONSIDERATION THE LAST VALID PANCHANAMA IT(SS)A.55, 56 & 76/MDS/2007 25 DATED 4.5.2000. THE REMAINING TWO PANCHANAMS DATED 30.06.2000 AND 28.08.2000 ARE NOTHING BUT ABUSE OF THE PROCESS OF LAW FOR ENLARGING THE TIME OF PASSING TH E ORDER. A PERUSAL OF PANCHANAMA DATED 30.06.2000 WOU LD SHOW THAT SEARCH LASTED FOR ONLY ONE HOUR I.E. FROM 11.30 AM TO 12.30 PM AND PANCHANAMA DATED 28.08.2000 SHOWS THE DURATION OF SEARCH AS 55 MINUTES I.E. FRO M 11.15 AM TO 12.10 PM. THUS, IT CAN BE SAFELY CONCLU DED THE LAST TWO PANCHANAMAS WERE MERE FORMALITIES TO K EEP THE SEARCH PROCEEDINGS ALIVE. IN THE INSTANT CASE , EVEN IF WE ENLARGE THE PERIOD AS PER THE PROVISIONS OF S ECTION 132(8A) AUTHORIZATION ENDED ON 18.06.2000. THEREFOR E, THE PERIOD OF LIMITATION FOR PASSING ASSESSMENT ORD ER ENDED ON 30.06.2002, WHEREAS THE ASSESSMENT ORDER HAS BEEN PASSED ON 30.08.2002 I.E. BEYOND THE PERIO D OF LIMITATION PROVIDED IN THE ACT. THEREFORE, IN O UR CONSIDERED OPINION, THE ASSESSMENT ORDER IS BAD IN LAW AND IS SET ASIDE BEING BARRED BY LIMITATION. 19. A FURTHER PERUSAL OF SUB-SECTION (1) OF 158BB CLEARLY SHOWS THAT THE ASSESSMENT IN THE CASE OF SE ARCH IT(SS)A.55, 56 & 76/MDS/2007 26 CAN BE MADE IN ACCORDANCE WITH THE PROVISIONS OF TH IS ACT ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF S EARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMEN TS DURING THE SEARCH. IN THE PRESENT CASE, THE DOCUMEN TS ON RECORD SHOW THAT NO INCRIMINATING DOCUMENTS WERE SEIZED DURING SEARCH PROCEEDINGS. IN THE PAPER BOOK FILED BY THE ASSESSEE PANCHANAMAS ARE PLACED AT PAG E 9, 45, 49 AND 53 VIDE WHICH SEARCH WAS CONDUCTED I N THE VARIOUS PREMISES OF THE ASSESSEE . A PERUSAL OF RECORDS SHOW THAT NO DOCUMENTS OR ANY OTHER INCRIMINATING EVIDENCE DURING THE SEARCH WERE SEIZE D FROM THE ASSESSEE. THE ASSESSEE HAD VOLUNTARILY MAD E DISCLOSURE OF INCOME OF ` 4,99,09.785/-. THE CIT(A) HAS LISTED PROPERTIES IN PARA 11 OF HIS ORDER WHICH AR E ALLEGED TO HAVE BEEN DISCLOSED BY ASSESSEE DURING SEARCH. AN EXAMINATION OF THE SAID LIST SHOWS THAT EXCEPT FOR THE FIRST SET OF PROPERTIES FROM SERIAL NO. 1 TO 17 AMOUNTING TO ` 2,81,42,021/-, REMAINING PROPERTIES ARE IN THE NAME OF THE FAMILY MEMBERS/RELATIVES OF THE ASSESSEE AND THE COMPANY IN WHICH THE ASSESSEE IS O NE IT(SS)A.55, 56 & 76/MDS/2007 27 OF THE DIRECTORS. IT IS NOT THE CASE OF THE REVENU E THAT SUCH PROPERTIES HAVE BEEN ACQUIRED BY THE ASSESSEE IN THE NAME OF HIS FAMILY MEMBERS. THEREFORE, THE SAID PROPERTIES DO NOT FORM INVESTMENT OR THE PROPERTIES OF THE ASSESSEE. THEY HAVE TO BE ASSESSED IN THE HANDS OF THE RESPECTIVE REGISTERED OWNERS. IT IS ALSO NOT THE CA SE OF THE REVENUE THAT THE OWNERS OF THE SAID PROPERTIES HAVE DENIED OWNERSHIP OF THE PROPERTIES ALLEGED TO BE REGISTERED IN THEIR RESPECTIVE NAMES. THE REVENUE HAS ALSO NOT STATED THAT IN THE INCOME RETURNED, THE AS SESSEE HAS NOT INCLUDED THE PROPERTIES REGISTERED IN HIS N AME. 20. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT SINCE NO INCRIMINATING EVIDENCE OR DOC UMENT HAS BEEN RECOVERED AGAINST THE ASSESSEE DURING THE SEARCH, THE ADDITION MADE AGAINST THE ASSESSEE IS UNSUSTAINABLE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. IT(SS)A NOS. 55 & 76/MDS/2007:- 21. BOTH THESE ARE CROSS APPEALS FILED BY THE ASSES SEE COMPANY (ITA NO.55/MDS/2007) AND THE REVENUE (ITA IT(SS)A.55, 56 & 76/MDS/2007 28 NO.76/MDS/2007) AGAINST THE ORDER PASSED BY THE CIT (A) DATED 5.1.2007. ADMITTEDLY, PROTECTIVE ASSESSMENT H AS BEEN DONE AGAINST THE ASSESSEE COMPANY. SEARCH WAS CONDUCTED IN THE PREMISES OF SHRI S.SUBRAMANIAN AND ADDITION WAS MADE IN THE BLOCK ASSESSMENT OF THE SA ID ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO MATERIAL HAS BEEN FOUND DURING SE ARCH AND THE ASSESSING OFFICER HAS NOT SENT ANY INFORMAT ION TO THE CONCERNED ASSESSING OFFICER OF THE ASSESSEE COMPANY, THERE IS NO SATISFACTION NOTE, THEREFORE, THE SEARCH AND SUBSEQUENT ASSESSMENT IN THE HANDS OF T HE ASSESSEE COMPANY IS INVALID. IN ORDER TO SUPPORT HI S CONTENTIONS, THE COUNSEL FOR THE ASSESSEE RELIED ON THE JUDGEMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF MANISH MAHESHWARI VS. ACIT REPORTED AS 289 ITR 341(SC), WHEREIN THE HONBLE SUPREME COURT OF INDIA HAD HELD THAT (I) THE ASSESSING OFFICER HAD T O RECORD HIS SATISFACTION THAT UNDISCLOSED INCOME BEL ONGED TO THE COMPANY, AND (II) HAND OVER THE BOOKS OF AC COUNT AND OTHER DOCUMENTS AND ASSETS SEIZED TO THE IT(SS)A.55, 56 & 76/MDS/2007 29 ASSESSING OFFICER HAVING JURISDICTION AGAINST THE COMPANY. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSMENT PROCEEDINGS IN THE CASE OF COMPANY ARE BARRED BY LIMITATION IN VIEW OF THE ORDER OF THE SP ECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MANOJ AGGARWAL VS. DCIT REPORTED AS 113 ITD 377. 22. ON THE OTHER HAND, THE DR SUBMITTED THAT SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFF ICER WHILE INITIATING PROCEEDINGS UNDER SECTION 158BD OF THE ACT AGAINST THE COMPANY. THE D.R CONTENDED THAT NO LIMITATION PERIOD IS SPECIFIED UNDER THE ACT FOR IN ITIATING PROCEEDINGS UNDER SECTION 158BD OF THE ACT. 23. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. A PERUSAL OF THE ORDER DATED 5. 1.2007 PASSED BY THE CIT(A) SHOWS THAT IN PARA 7, THE CIT (A) HAS REPRODUCED THE SATISFACTION NOTE RECORDED BY TH E ASSESSING OFFICER. DE HORS THE CONTROVERSY REGARDI NG ISSUE OF SATISFACTION NOTE, IT IS AN ADMITTED FACT THAT IN THE CASE OF COMPANY PROTECTIVE ASSESSMENT HAS BEEN DON E. IT(SS)A.55, 56 & 76/MDS/2007 30 THE ASSESSMENT ORDER DATED 28.2.2005 HAS BEEN PASSED UNDER SECTION 158BD READ WITH SECTION 158BC AND 143(3) OF THE ACT. THE ADDITIONS HAVE BEEN MADE IN THE CASE OF THE COMPANY CONSEQUENT TO THE SEARCH PROCEEDINGS AT THE PREMISES OF SHRI S.SUBRAMANIAN A ND FOR THE SAME BLOCK PERIOD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS INTER-ALIA ASSAILED THE BLOCK ASSESSMENT PROCEEDINGS IN THE CASE OF ASSESSEE COMPANY ON THE BASIS OF LIMITATION. 24. LET US FIRST SEE THE CHRONOLOGY OF EVENTS: I) SEARCH PROCEEDINGS AGAINST MR. S.SUBRAMANIAN CONCLUDED ON 28.8.2000; II) ASSESSMENT ORDER UNDER SECTION 158BC READ WITH SECTION 143(3) PASSED AGAINST HIM ON 30.08.2002; III) NOTICE UNDER SECTION 158BD ISSUED TO THE COMPANY ON 28.02.2003; & IV) ASSESSMENT ORDER UNDER SECTION 158BD R.W.S 158BC READ WITH SECTION 143(3) PASSED AGAINST THE ASSESSEE COMPANY ON 28.2.2005. IT(SS)A.55, 56 & 76/MDS/2007 31 25. ALTHOUGH THE ACT DOES NOT SPECIFICALLY PROVIDE ANY TIME LIMIT FOR INITIATION OF PROCEEDINGS UNDER SECT ION 158BD OF THE ACT. HOWEVER, A PLAIN AND REASONABLE INTERPRETATION OF THE PROVISIONS OF SECTION 158BD R EAD WITH SECTION 158BC AND 158BE WOULD SHOW THAT SATISFACTION FOR TAKING ACTION UNDER SECTION 158BD HAS TO BE RECORDED BEFORE COMPLETION OF BLOCK ASSESSMENT UNDER SECTION 158BC IN THE CASE OF THE PERSON SEARCHED. A PERUSAL OF THE SATISFACTION NOTE WHICH IS PLACED AT PAGE 105 OF THE PAPER BOOK CLEARLY SHOWS THAT SATISFACTION HAS BEEN RECORDED AFTER THE COMPLETIO N OF ASSESSMENT IN THE CASE OF SHRI S.SUBRAMANIAN. THE PARA 2 OF THE NOTE IS REPRODUCED HEREIN BELOW:- 2. A SEARCH U/S.132 OF INCOME TAX ACT HAD BEEN CONDUCTED IN THE CASE OF SHRI S.SUBRAMANIAN (CHAIRMAN & MANAGING DIRECTOR OF THE COMPANY) WHICH COMMENCED ON 4.5.2000 AND WAS COMPLETED ON 31.8.2000. THE BLOCK ASSESSMENT U/S.158BC OF INCOME TAX ACT HAD BEEN COMPLETED IN THE CASE OF SHRI S.SUBRAMANIAN ON 31.8.2002. IT(SS)A.55, 56 & 76/MDS/2007 32 THE CHRONOLOGY OF EVENTS IN THE PRESENT CASE CLEARL Y SHOW THAT THE SATISFACTION NOTE AND THE NOTICE IS B EYOND THE PERIOD OF LIMITATION. 26. THE DELHI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MANOJ AGGARWAL VS. DCIT REPORTED AS 310 ITR (AT) 99: 113 ITD 377 HAS HELD AS UNDER:- SECTION 158BD AS SAID EARLIER BEGINS WITH THE EXPRESSION WHERE THE ASSESSING OFFICER IS SATISFIE D AND SO THE VERY SECTION IMPLIES A RECORDING OF SATISFAC TION. THE SATISFACTION CONTEMPLATED IS A JUDICIOUS SATISF ACTION AND NOT A SUBJECTIVE SATISFACTION AND UNLESS THE SA ME IS RECORDED IT IS NOT POSSIBLE FOR ANY PERSON TO DISCE RN WHETHER THE SATISFACTION MEETS THE REQUIREMENTS OF LAW AT ALL. THE SATISFACTION CAN BE FOUND IN THE ORDER PAS SED UNDER SECTION 158BC AND IF NO SUCH ORDER IS PASSED THEN IT WILL HAVE TO BE FOUND IN THE NOTE HANDING OVER T HE MATERIAL SEIZED TO THE ASSESSING OFFICER ASSESSING THE OTHER PERSON. IN ANY EVENT, IT HAS TO BE IN WRITING AND IN VIEW OF SECTION 158BE, THE SAID RECORDING HAS TO BE MADE BEFORE THE TIME SET IN SECTION 158BE EXPIRES. AFTER THE SAID DATE, IT IS NOT POSSIBLE TO INVOKE SECTION 158BD AT ALL. A VIEW IS EXPRESSED THAT WHEREVER A TIME-LIMIT IS INTENDED, PARLIAMENT HAS PROVIDED FOR THE SAME AND IN THE ABSENCE OF A SPECIFIC PROVISION MADE IN THIS RE SPECT IT HAS TO BE ASSUMED THAT THERE IS NO TIME-LIMIT INTEN DED IN LAW. IT HAS TO BE REMEMBERED THAT THE MATTER RELATE S TO FIXING HUGE FINANCIAL AND OTHER CIVIL LIABILITY ON THE PERSON AFFECTED AND IT HAS BEEN REPEATEDLY HELD THAT THERE MUST BE A FINALITY TO ANY PROCEEDING UNDER THE ACT AND T HAT A CONCLUDED PROCEEDING CANNOT BE REOPENED AT THE WHIM AND FANCY OF THE ASSESSING OFFICER WITHOUT THE DUE PROCESS OF LAW. STRICT INTERPRETATION OF FISCAL STA TUTES IS THE ORDER OF THE DAY AND AS THE PROVISIONS FOR SEAR CH ARE DRACONIAN IN NATURE SUCH PROVISIONS HAVE NECESSARIL Y TO IT(SS)A.55, 56 & 76/MDS/2007 33 BE STRICTLY CONSTRUED. IT WILL HAVE TO BE REMEMBERE D THAT SECTION 158BD PROVIDES FOR INVOKING JURISDICTION UN DER THE SAID SECTION ENABLING THE ASSESSING OFFICER ASSESSING THE OTHER PERSON IN RESPECT OF WHOM THE ASSESSING OFFICER ASSESSING THE PERSON SEARCHED GIV ES A FINDING THAT THE UNDISCLOSED INCOME UNEARTHED AS A RESULT OF SEARCH BELONGS TO THE SAID PERSON AND ONCE SUCH A FINDING IS GIVEN THE PROVISIONS OF SECTION 158BD CO ME INTO OPERATION. THIS, THEREFORE, INVOLVES ASSUMPTIO N OF JURISDICTION AND CANNOT BE CONSTRUED AS A PROCEDURA L MATTER. IN THE ABSENCE OF A FINDING IN THIS BEHALF, THERE IS NO JURISDICTION TO THE OTHER ASSESSING OFFICER AT A LL TO PROCEED FURTHER IN THE MATTER. AS THE TIME-LIMIT SE T IN SECTION 158BE APPLIES TO SUCH FINDING, IT IS ONLY L OGICAL THAT THE SAID TIME LIMIT AUTOMATICALLY APPLIES FOR INVOKING THE PROVISIONS OF SECTION 158BD AND IT IS FOR THIS REASON THAT PARLIAMENT DID NOT FIND IT NECESSARY TO SPECIF Y A SEPARATE TIME-LIMIT FOR THE SAME, AS THE ENACTMENT ITSELF SHOWS THAT BOTH SECTIONS 158BC AND 158BD ARE INTER- LINKED, INTERLACED AND INTERTWINED AND BOTH FORM PA RT AND PARCEL OF THE SAME CHAPTER. 27. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MIRDULA , PROP. DHRUV FABRICS REPORTED AS 335 ITR 266. THE HONBLE HIGH COURT HAS HELD AS UNDER:- ACCORDING TO THE PLAIN READING OF SECTION 158BD IB ID, THE ASSESSING OFFICER, WHILE FRAMING THE ASSESSMENT OF AN ASSESSEE UNDER SECTION 158BC OF THE ACT AGAINST WHO M ACTION HAS BEEN TAKEN UNDER SECTION 132 OR 132A OF THE ACT IS MANDATORILY REQUIRED TO RECORD SATISFACTION BEFORE ACTION CAN BE INITIATED UNDER SECTION 158BD OF THE ACT AGAINST SUCH OTHER PERSON. IN OTHER WORDS, THE SATI SFACTION BY THE ASSESSING OFFICER MAKING ASSESSMENT UNDER SECTION 158BC OF THE ACT, IN THE CASE OF THE PERSON SEARCHED, THAT THERE IS CERTAIN UNDISCLOSED INCOME AS A RESULT OF EXAMINATION OF SEIZED MATERIAL WHICH BELO NGS TO SOME OTHER IDENTIFIED PERSON, IS ESSENTIAL FOR ASSU MING JURISDICTION UNDER SECTION 158BD OF THE ACT. THE IT(SS)A.55, 56 & 76/MDS/2007 34 SATISFACTION REQUIRED TO BE RECORDED IS PRIMA FACIE SATISFACTION AND IS NOT FIRM OR CONCLUSIVE SATISFAC TION AT THAT STAGE. SECTION 158BE OF THE ACT PRESCRIBES THE TIME LIMIT FOR FRAMING OF ASSESSMENTS UNDER SECTIONS 158 BC AND 158BD OF THE ACT. THE ASSESSING OFFICER OF THE PERSON AGAINST WHOM ACTION UNDER SECTION 132 OR 132A OF TH E ACT HAS BEEN TAKEN, IS THE ASSESSING OFFICER WHO INITIA TES THE PROCEEDINGS UNDER SECTION 158BD OF THE ACT BY RECOR DING SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON SO AS TO TAKE ACTION UNDER SECTION 158 BD OF THE ACT AGAINST THAT PERSON. THE ACT NOWHERE SPECIF ICALLY PRESCRIBES ANY TIME LIMIT OR LIMITATION FOR INITIAT ION OF PROCEEDINGS UNDER SECTION 158BD OF THE ACT OR FOR RECORDING OF SATISFACTION BEFORE TAKING ACTION UNDE R THAT PROVISION. THE PLAIN AND REASONABLE CONSTRUCTION TH AT CAN BE PLACED ON THE AFORESAID PROVISION WOULD BE THAT THE RECORDING OF SATISFACTION FOR TAKING ACTION AGAINST ANY OTHER PERSON UNDER SECTION 158BD OF THE ACT HAS TO BE BET WEEN INITIATION OF PROCEEDINGS UNDER SECTION 158BC AND B EFORE COMPLETION OF BLOCK ASSESSMENT UNDER SECTION 158BC OF THE ACT IN THE CASE OF THE PERSON SEARCHED. IT WOUL D, THUS, MEANS THAT THE ACTION CONTEMPLATED UNDER SECTION 15 8BD OF THE ACT AGAINST A THIRD PARTY TO A SEARCH, IS NE CESSARILY TO BE DURING THE COURSE OF BLOCK ASSESSMENT PROCEED INGS UNDER SECTION 158BC OF THE SEARCHED PERSON. IT CANN OT BE AFTER THE CONCLUSION OF THE SAME AS THERE IS NO OCC ASION FOR AN ASSESSING OFFICER TO EXAMINE THE SEIZED MATE RIAL OR DOCUMENTS OF THE SEARCHED PERSON WHEN THE BLOCK ASSESSMENT PROCEEDINGS HAVE CONCLUDED AND NO OTHER PROCEEDINGS ARE PENDING BEFORE HIM. IF ANY OTHER TI ME LIMIT IS READ IN THE PROVISIONS/STATUTE, IT SHALL LEAD TO ANOMALY AND WOULD BE ARBITRARY AND UNREASONABLE. IT COULD N OT BE READ IN THE PROVISION THAT WHERE BLOCK ASSESSMENT U NDER SECTION 158BC OF THE ACT IN THE CASE OF AN ASSESSEE AGAINST WHOM ACTION UNDER SECTION 132 OR 132A OF TH E ACT HAD BEEN CARRIED IS FINALIZED, THE REVENUE CAN TAKE ACTION AT ANY TIME IN THE ABSENCE OF ANY SPECIFIC LIMITATI ON PRESCRIBED IN THE STATUTE. A CONSTRUCTION WHICH LEA DS TO SUCH AN ANOMALY SHOULD BE AVOIDED. 28. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE WELL SETTLED LAW, WE HOLD THAT THE NOTICE ISSUED TO THE ASSESSEE COMPANY UNDER SECTION IT(SS)A.55, 56 & 76/MDS/2007 35 158BD SUFFERS FROM LIMITATION. THUS, THE NOTICE AND THE PROCEEDINGS ARISING THEREFROM ARE BAD IN LAW AND AR E ACCORDINGLY SET ASIDE. THE APPEAL OF THE REVENUE IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR THE REASONS RECORDED ABOVE. 29. TO SUM UP, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 14 TH DAY OF FEBRUARY, 2013 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 14 TH FEBRUARY, 2013 SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.