Income Tax Appellate Tribunal - Delhi
Assistant Commissioner Of Income Tax vs Bhagwati Printers (P) Ltd. on 20 January, 2006
Equivalent citations: (2006)102TTJ(DELHI)480
ORDER
R.V. Easwar, Vice President:
1. The appeal is by the Department and the cross-objections are by the assessee. They arise out of the block assessment made on the assessee pursuant to the search carried out in his premises under Section 132 of the IT Act on 23rd June, 1999.
2. At the very outset, the learned Counsel for the assessee raised an additional ground to the following effect:
1. That on facts and circumstances of the case and in law the block assessment order dt. 31st Aug., 2001 passed under Section 158BC of the IT Act, 1961 ('the Act') is without jurisdiction, bad in law and void ab initio.
1.1 That on the facts and circumstances of the case and in law the block assessment order has been passed beyond the period of limitation prescribed under Section 158BE of the Act and is therefore, illegal, bad in law and nullity.
2. That the AO erred on facts in imposing levying surcharge on the income-tax payable pursuant to the block assessment order.
In the application for admission of the additional ground, it has been pointed out that the search was concluded on 24th June, 1999 and in terms of Section 158BE(1)(b) the block assessment order ought to have been passed within two years from the end of the month in which the search was concluded, which will be 30th June, 2001 and since the AO has passed the order only on 31st Aug., 2001 it is the beyond the period of limitation and hence void in law. It has further been stated that since no surcharge is leviable in respect of the block assessment made pursuant to a search carried out on or before 31st May, 2002, the levy of surcharge is invalid. It is prayed that the additional grounds raise purely legal issues not involving any fresh investigation into facts except those already on record and have been raised on being advised about the correct legal position and the omission to raise them earlier was neither wilful nor deliberate.
3. After hearing the rival submissions on the admissibility of the additional grounds, we are satisfied that they raise purely legal issues and do not involve any fresh investigation into facts, except those already on record. Further, as regards the first additional ground relating to the limitation, it goes to the root of the matter and adjudication thereof is necessary before examination of the merits of the assessment. We therefore admit the additional grounds.
4. The learned CIT (Departmental Representative) Mr. P.V. Rao, after consulting the record drew our attention to p. 36 of the paper book filed by the assessee, which is the copy of the block return filed by the assessee and pointed out that the assessee, which is a company, has itself stated that the date of execution of the last search warrant was 24th Aug., 1999 and if that is the correct position, then the assessment completed on 31st Aug., 2001 was within the period of limitation prescribed by Section 158BE(1)(b). In answer, the learned Counsel for the assessee submitted that it was an incorrect statement made by the company in its return which cannot be conclusive. He further pointed out that the warrant authorizing the search on 24th Aug., 1999 was issued in the case of the director Anil Varma and not in the assessee-company's case, which will not advance the Department's contention that the block assessment made in the assessee-company's case was within the period of limitation. In his reply, the learned CIT (Departmental Representative) very fairly stated that the record does not show any search warrant issued in the assessee-company's name in respect of the search which took place on 24th Aug., 1999. He also stated that it appears that the search which took place en that date was in respect of a locker in the name of the director.
5. On a careful consideration of the above, we are of the view that the block assessment was completed beyond the period of limitation and hence invalid. There is no search in the case of the assessee-company on 24th Aug., 1999. The search which took place on that date was in the case of Anil Verma, director of the company, in respect of a locker in his name. Therefore the resultant position is that the search in the assessee's case commenced on 24th June, 1999 and was concluded on 24th June, 1999 as seen from the Panchnama at pp. 9 to 12 of the paper book. If so, the assessment ought to have been completed on or before 30th June, 2001 as per Section 158BE(1)(b). The assessment having been completed on 31st Aug., 2001, is beyond the period of limitation and hence invalid. We hold so. The first additional ground in the cross-objection is accepted.
6. We may add that the statement made by the assessee in its block return to the effect that the search in its case was concluded on 24th Aug., 1999 is an erroneous statement contrary to the record, It cannot therefore be conclusive of the actual date on which the search in its case was concluded. The assessee cannot therefore be estopped from taking up a contention which is in conformity with the record.
7. In the view we have taken, there is no need to examine the other grounds taken by the assessee in the cross-objections, including the additional ground taken against the levy of surcharge, nor the grounds taken by the Department in its appeal.
8. The appeal filed by the Department is dismissed with no order as to costs. The cross-objections filed by the assessee are allowed.