|COURT:||Delhi High Court|
|CORAM:||Pratibha M. Singh J, S. Muralidhar J|
|SECTION(S):||153A, 153C, 158B|
|CATCH WORDS:||limitation period, Search assessment|
|DATE:||July 17, 2017 (Date of pronouncement)|
|DATE:||July 19, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 153B(2)(a): Merely visiting the premises on the pretext of concluding the search but not actually finding anything new for being seized cannot give rise to a second panchnama so as to extend the limitation period for passing the s. 153A assessment order. In such event, there would be no occasion to draw up a panchnama at all. The visit and the panchnama drawn up on that date cannot lead to postponement of the period for completion of assessment with reference to s. 153B (2) (a) of the Act|
(i) A careful perusal of the panchnamas in respect of the authorization bearing E. No. 0068 and 0069 shows that no fresh material as such was found during the second visit on 15th May, 2007. A formal seizure of the jewellery of Ms. Neena Jain was recorded in the second panchnama which also notes that there was already a valuation report dated 21st March, 2007 in respect of those very jewellery items. No de facto seizure actually took place on that date i.e., 15th May, 2007. For all practical purposes, therefore, the search concluded on 22nd March, 2007 at 6:00 am as far as Authorization E. No. 0069 is concerned and 22nd March, 2007 at 5:30 am as far as Authorization E. No. 0068 is concerned.
(ii) Section 153B, which prescribes the time limit for completion of assessment under section 153A, requires the Assessing Officer (‘AO’) to frame the assessment within 21 months from the date from the end of the financial year in which the last of the authorizations was executed as per Section 132 of the Act. The authorization mentioned in Section 153B is deemed to have been executed when the last panchnama is drawn in relation to any person in whose case the warrant of authorization has been issued. This is in terms of Section 153B (2) (a) of the Act.
(iii) The word ‘panchnama’ is not defined in the Act. Even the Code of Criminal Procedure, 1973, the provisions of which relating to search and seizure have been made applicable to the searches and seizures under Section 132 of the Act, does not define the said word. It, however, prescribes the format in which the panchnama is required to be drawn up.
(iv) The Court is not prepared to accept the plea of the Revenue that merely because a panchnama was drawn up on 15th May, 2007 showing that the search was ‘finally concluded’ on that date, it postponed the period of limitation in terms of Section 153B (2) (a) of the Act. It had to be the “last panchnama drawn in relation to any person in whose case the warrant of authorization has been issued”. The last panchnama, no doubt, is dated 15th May, 2007 but what it records is the seizure of the jewellery items not of any of the persons searched but the wives of one of the directors i.e., of Ms. Neena Jain who was not even a director of any of these entities. Therefore, even assuming that the jewellery of Ms. Neena Jain was seized under panchnama of 15th May, 2007, as far as the searched entities are concerned, the Revenue cannot take advantage of Section 153B (2) (a) to contend that the period of limitation in respect of them stands extended for completing of assessment up to 31st December, 2009 (CIT v. S.K. Katyal (2009) 308 ITR 168 (Del) followed)
(v) In the considered view of the Court, C. Ramaiah Reddy v. Assistant Commissioner of Income Tax (2011) 339 ITR 201 (Kar.) puts it beyond the pale of doubt that merely visiting the premises on the pretext of concluding the search but not actually finding anything new for being seized cannot give rise to a second panchnama. In such event, there would be no occasion to draw up a panchnama at all. In the present case, the Court is satisfied that the second visit by the search party to the Ashok Vihar premises on 15th May, 2007 did not result in anything new being found that belonged to any of the searched parties. The second visit and the panchnama drawn up on that date cannot lead to postponement of the period for completion of assessment with reference to Section 153B (2) (a) of the Act.
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