Income Tax Appellate Tribunal - Mumbai
Javed Mohd. Peshimam vs Deputy Commissioner Of Income Tax on 26 May, 2005
Equivalent citations: (2006)100TTJ(MUM)434
ORDER
Salil Kapoor, J.M.
1. This appeal filed by the assessee relates to the block period from 1st April, 1988 to 17th Sept, 1998 and is directed against the order of the CIT(A) Central-V at Mumbai dt. 3rd Oct., 2001. The proceedings arise out of the assessment made under Section 158BC of IT Act.
2. There are nine grounds of appeal raised by the assessee but effectively there are only two grievances of the assessee. The first grievance is that the assessment framed under Section 158BC is barred by the time-limitation and other one is that the assessment has been wrongly made at Rs. 8,00,000.
3. The brief facts as stated, are that the assessee is a partner in M/s Al. Samit International and is also having other sources of income. His main source of income is from M/s Al. Samit International, which is engaged in the business of recruitment for foreign companies located in the middle east.
4. A search under Section 132(1) was initiated in the case of the firm M/s Al. Samit International as well as on its partners on 17th Sept., 1998. The search was initiated in the case of the assessee on 17th Sept., 1998, at 8 a.m. and was concluded on 18th Sept, 1998, at 3 p.m. and Panchnama dt. 18th Sept, 1998, was drawn, A Prohibitory Order (in short P.O.) dt. 18th Sept, 1998, was passed with regard to jewellery kept in the wall "unit of the bedroom which were inventorised as per valuation report dt. 17th Sept., 1998, of the approved valuer and with regard to CPU kept in the wall unit of the bedroom. The second Panchnama was drawn on 13th Nov., 1998, when the search party again visited at 4 p.m. on that date and concluded the search at 5 p.m. on the same day. On 13th Nov., 1998, the only action taken was that the said P.O. order dt. 18th Sept., 1998, was lifted.
5. Notice under Section 158BC was issued to the assessee on 3rd May, 1999 and in pursuance to that the assessee filed return for the block period on 7th June, 1999 declaring undisclosed income at Rs. 8,00,000. The assessee also filed a letter along with the said return that no undisclosed income was found during the course of search of the premises of the assessee. The assessment was completed by the AO vide order dt. 28th Nov., 2000, at Rs. 8,00,000 as declared by the assessee.
6. Before CIT (A) the assessee challenged the assessment of the block period on the ground that it is barred by time-limitation as limitation expired on 30th Sept., 2000, i.e., two years form the end of the month in which the search was concluded. As per assessee, the search was concluded on 18th Sept., 1998 and not on 13th Nov., 1998. As on 13th Nov., 1998 only the P.O. was lifted. The assessee also challenged before the CIT (A) that the income has been wrongly assessed at Rs. 8,00,000 as no undisclosed income was found during the search. The CIT(A) did not agree with the assessee and held that the articles placed under P.O. were neither seized nor need to be seized on that date and as such the search was temporarily concluded on 18th Sept., 1998. He also held that since the assessee had voluntarily filed the return for the block period at Rs. 8,00,000, the AO was not required to prove as to what is the source of the same.
7. Before us it is argued by the learned Counsel for the assessee Shri Firoze Andhyanutina that on 17th Sept., 1998, the authorised officers were S/Shri V.K. Joy and S.S. Kamble as it is clear from the first Panchnama. They concluded the search on 18th Sept., 1998 and also placed a P.O. on jewellery and CPU. He further stated that on 13th Nov., 1998, another officer Shri K.V. Narsimhacharya merely lifted the said P.O.. He contended that the authorisation was executed on 18th Sept., 1998 as no fresh authorisation was issued in favour of Shri K.V. Narsimhacharya. He had only lifted the P.O. on 13th Nov., 1998. The counsel further stated that the IT authorities never gave the assessee copy of any fresh authorisation/warrant issued in favour of Shri K.V. Narsimhacharya inspite of special request made by him. He stated that order passed on 28th Nov., 2000, was barred by time-limitation, as the time-limit to pass the assessment order expired on 30th Sept., 1998 (sic-2000). He also placed reliance on the case of CIT v. Mrs. Sandhya P. Naik .
8. On the other hand, Ms. Asha Agarwal, learned Departmental Representative, stated that the facts of the case of Mrs. Sandhya P. Naik (supra) are different as in that case the P.O. was pending for more than one year whereas, in the case of assessee it was only for 1-1/2 months. She also stated that the issue of time-limitation was not raised by, the assessee before the AO. The learned Departmental Representative also placed reliance in the case of C. Ramaiah Reddy v. Asstt. CIT (2003) 81 TTJ (Bang)(SB) 1044 : (2003) 87 ITD 439 (Bang)(SB).
9. We have heard the contentions of both the parties. The authorisation issued under Section 132(1) in "favour of the authorised officer is to do any or all the acts provided in Clauses (i) to (v) of said sub-section. In this case, the authorised officers were S/Shri V.K. Joy and S.S. Kamble, who searched the premises on 17th Sept., 1998 and concluded -the search on 18th 'Sept., 1998 and prepared the Panchnama on 18th Sept., 1998, They also inventorised the jewellery and kept the same along with CPU under prohibitory orders vide order dt. 18th Sept., 1998. The Revenue has not shown any authorisation issued in favour of Shri K.V. Narsimhacharya who visited the premises on 13th Nov., 1998 and lifted the P.O. dt. 18th Sept., 1998. As per the provisions of Section 158BE the time-limitation starts from the end of the month in which the last of the authorisation for search was executed. The fact is not denied by the Revenue that only one authorisation was issued. In our opinion the authorisation issued was executed on 18th Sept., 1998. Action of the another officer Shri K.V. Narsimhacharya on 13th Nov., 1998 can be said to be execution of the same authorisation shown to the assessee on 17th Sept., 1998 and as per the Panchnama it is dt. 16th Sept., 1998. The second Panchnama dt. 13th Nov., 1998 also does not mention about any fresh authorisation. The reliance placed by the Revenue on the decision of the Special Bench in the case of C. Ramaiah Reddy, cited supra, will be of no help before them. As the issue before the said Special Bench was, whether search is deemed to be continuing so long as all materials and valuables are either seized or released but P.O. is passed and time-limit will not commence so long as Panchnama declaring conclusion of search is not drawn. Here, the issue is that the officer who had drawn the second Panchnama and lifted the P.O. was not the same officer who conducted search on 17th Aug., 1998 and who prepared the first Panchnama. No fresh authorisation is shown to have been issued in favour of the officer who lifted the P.O. and prepared the second Panchnama.
10. In our considered view, the authorisation issued was executed on 18th Sept., 1998 and the time-limitation for completion of assessment, as per the provisions of Section 158BE, ended on 30th Sept., 2000. As such the assessment order passed on 28th Nov., 2000 was barred by time-limitation and is accordingly quashed.
11. In view of the above finding, we do not consider it necessary to go into the merits of the case. Since the order is already quashed, no useful purpose will be served by adjudicating grounds of appeal on merit. We hold accordingly,
12. In the result, appeal of the assessee is allowed.