THE COMMISSIONER OF INCOME TAX V. SRI S.N.GURUDATH

ITA/301/2009

AI Insights

The case involves an appeal by the Commissioner of Income-Tax and the Assistant Commissioner of Income Tax against the order of the Income Tax Appellate Tribunal, which had set aside a block assessment order on the grounds of it being time-barred. The block assessment was related to the search conducted on the premises of the assessee, Sri S.N. Gurudath, in 1996. The main legal contention was regarding the calculation of the limitation period for passing the block assessment order under Section 158BE of the Income Tax Act, 1961. The Tribunal had found that the assessment order was passed beyond the permissible time limit, leading to the Revenue's appeal.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 701143 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 03-02-2015
• Assessment Year: misc
• Other Referred Cases: C. Ramaiah Reddy vs. Assistant Commissioner of Income Tax (IMV)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A SHANKAR
• Assessee Lawyers: K V ARAVIND
• Keywords: Block assessment; Limitation Period; Panchanama; Search warrant
• Section: 132; 158BE; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF FEBRUARY 2015 P R E S E N T THE HON’BLE MR. JUSTICE N. KUMAR A N D THE HON’BLE MR. JUSTICE B. VEERAPPA ITA No.301/ 2009 BETWEEN: 1.THE COMMISSIONER OF INCOME-TAX C.R.BUILDING QUEENS ROAD BANGALORE. 2.THE ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE V C.R. BUILDING QUEENS ROAD BANGALORE. ... APPELLANTS. (BY SRI K V ARAVIND, ADV.) AND: SRI S.N. GURUDATH SINCE DECEASED REP. BY LRS. VIDE ORDER DT. 19.01.2015 1. DR. T.K. VASUNDHARA DEVI W/O. LATE SRI S.N. GURUDATH AGED ABOUT 57 YEARS 12/12, ‘ANUGAHA’ 16TH MAIN, MRCR LAYOUT VIJAYANAGAR BANGALORE – 560 040 2 2. CHETAN GURUDATH S/O. LATE SRI S.N. GURUDATH AGED ABOUT 29 YEARS 16TH MAIN M.R.C.R. LAYOUT VIJAYANAGAR BANGALORE – 560 040. ... RESPONDENTS. (BY SRI A SHANKAR, ADV. FOR LRs. OF DECEASED RESPONDENT) THIS ITA IS UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 31-12-2008 PASSED IN IT (SS)A No.113/BNG/1997, FOR THE BLOCK ASSESSMENT PERIOD 1986- 87 TO 1996-97 PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN IT (SS)A NO.113/BNG/1997, DATED 31.12.2008 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-V, BANGALORE. THIS ITA COMING ON FOR ORDERS THIS DAY, N. KUMAR, J., DELIVERED THE FOLLOWING: - JUDGMENT The Revenue has preferred this appeal against the order passed by the Tribunal which has held that the block assessment order passed on 30.05.1997 is barred by limitation as the same is beyond the period of limitation prescribed under the Act. 2. The premises of the assessee was searched on 29.3.1996 and a panchanama was drawn on that day in 3 continuation of the search, warrant was issued against the premises of the assessee and was searched on 23.5.1996. The assessing authority passed the order of block assessment dated 30.05.1997. This Court in the case of C. RAMAIAH REDDY Vs. ASSISTANT COMMISSIONER OF INCOME TAX (IMV) reported in (2011) 339 ITR 210 (Karn) has held as follows:- “Section 158BE of the Act prescribes the time limit for completion of block assessment. According to the section, the period of limitation is within one year from the end of the month in which the last of the authorization for search under section 132 was executed. A doubt may arise regarding the commencement of the day from which limitation is to be computed. In order to remove the doubt an Explanation was added by the Finance (No.2) Act, 1998, with retrospective effect from July 1, 1995. The expression used is “last panchanama” and not “last of the panchanama”. Therefore, there cannot be a plurality of panchanamas in respect of authorization. This intention could be gathered from the word “last of the 4 authorization” used in the main section. The word used is “panchanama” and not panchanamas”. The panchanama that is mentioned in Explanation 2(a) to section 158BE is a panchanama which documents the conclusion of a search. The starting point of limitation is the “end of the month” in which the last of the authorizations is executed as recorded in the last panchanama.” 3. Admittedly for conducting the search either on 25.4.1996 or on 23.5.1996 there was no search warrant. Period of limitation is one year from the last day of the month in which the panchanama was drawn. If that is taken into consideration, the order ought to have been passed on 31.3.1997, whereas the order is passed on 30.5.1997. Therefore, the order passed by the Tribunal cannot be found fault with. In fact the said view has been taken by several High Courts and the special leave petition filed against such orders are dismissed at the stage of admission by Hon’ble Supreme Court. In that view 5 of the matter, we do not see any merit in the matter and the substantial question is answered in favour of the assessee and against the Revenue. As it is submitted that the Revenue has preferred this appeal challenging the order passed in C. RAMAIAH REDDY’s case on this aspect. Therefore, they seek liberty to be reserved in the event of the Apex Court holding in their favour. 4. Under these circumstances, we pass the following :- ORDER The appeal is dismissed. Liberty sought for is reserved. Sd/- JUDGE Sd/- JUDGE NG* "