Jethmal F. Soni, v. Dy. CIT, CIR.1(2), Pune,

ITA 748/PUN/2006 | misc
Pronouncement Date: 10-08-2010 | Result: Allowed

Appeal Details

RSA Number 74824514 RSA 2006
Bench Pune
Appeal Number ITA 748/PUN/2006
Duration Of Justice 4 year(s) 1 month(s) 21 day(s)
Appellant Jethmal F. Soni,
Respondent Dy. CIT, CIR.1(2), Pune,
Appeal Type Income Tax Appeal
Pronouncement Date 10-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 10-08-2010
Date Of Final Hearing 08-07-2010
Next Hearing Date 08-07-2010
Assessment Year misc
Appeal Filed On 19-06-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I. C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 748/PN/2006 ( BLOCK PERIOD : 1988 TO 1998- 99) JETHMAL F. SONI 1741 R.S. KEDARI ROAD PUNE 411 001 PAN : NOT AVAILABLE .. APPELLANT V. THE DY. CIT CIRCLE 1(2) PUNE . RESPONDENT APPELLANT BY :S/ SHRI M.K. KULKARNI/T.S. ROKLE RESPONDENT BY : SHRI R. KAUSHAL ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER OF THE CITA)- II PUNE DATED 28.3.2006. 2. THE CONCISED AND CORRECTED GROUNDS READ AS UNDER : 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE BLOCK ASSESSMENT ORDER PASSED ON 30-1-2001 WAS WITHIN THE LIMITATION PERIOD OF TWO Y EARS FROM THE END OF THE MONTH I.E. 31-1-1999 AS LAST OF THE PANCHANAMA WAS EXECUTED ON 13-1-99 IN THE CASE OF THE FIRM THOUGH IN APPELLANTS CASE IT WAS SO EXECUTED ON 24-12- 1998. THE LD. CIT(A) FURTHER ERRED IN HOLDING THAT THE PANCHANAMA DRAWN IN THE NAME OF THE FIRM SHREE MAHALAXMI JEWELLERS & O THERS ON 13-1-99 WAS LAST OF THE PANCHANAMA EXECUTED WITHIN THE MEANING OF EXPLN. 2(A) TO S.158BE OF THE ACT IN THE CASE OF THE PARTNER ALSO. EVEN THEN IN THE CASE OF THE FIRM THE LAST OF THE PANCHANAMA WAS EXECUTED O N 15-12-1998 WAS BARRED BY LIMITATION AS IT WAS NOT DONE ON OR BEFOR E 31-12-2000. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE PERUSAL OF WARRANT OF AUTHORIZATION IN F.NO.45 ISSU ED IN THE CASE OF THIS APPELLANT WAS DT. 8-12-1998 AND SEARCH WAS FINALLY CONCLUDED ON 24-12-1998 BY DRAWING PANCHANMA ON THAT DATE. IN THIS VIEW OF THE MATTER THE BLOCK ASSESSMENT OUGHT TO HAVE BEEN COMPLETED ON OR BEFOR E 31-12-2000. THE BLOCK ASSESSMENT COMPLETED ON 30-1-2001 IS CLEARLY BARRED BY LIMITATION. IT BE QUASHED. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW ORIGINALLY THE ADDITION BASED ON TOTAL 7 LOOSE PAPERS SEIZED AMOUN TED TO RS.5 60 00/-. THE LD. A.O. CONSIDERED THE FACTS AND RETAINED ADDITION OF RS. 5 20 000/-. THE APPELLANTS SUBMISSION THAT THESE WERE DUPLICATE EN TRIES AS THE AMOUNT OF RS.3 20 000/- WAS ALREADY CONSIDERED AS UNDISCLOSED INCOME INCLUDED IN THE ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 2 FIGURE OF RS. 14 38 350/- IN THE HANDS OF THE FIRM IN WHICH APPELLANT IS A PARTNER. THE AMOUNT OF RS. 2 00 000/- HAVING BEEN ALREADY RECEIVED FROM THE BORROWERS ADVANCED ON THE STRENGTH OF PAWNED AR TICLES. NO BALANCE IS RECEIVABLE FROM THEM. THIS CANNOT BE CONSIDERED AS UNEXPLAINED DEBTORS. IN VIEW OF THIS ANY ASSESSMENT IN THE HANDS OF THE FIRM OF RS. 3 20 000/- THE ADDITION OF RS.5 20 000/- IS UNWARRANTED ILLEGAL A ND BE QUASHED. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW AND WITHOUT PREJUDICE TO GROUND NO. 3 ABOVE THE LD. C.I.T.(A) W AS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 2 00 000/- (RS. 5 20 000 3 20 000 = 2 00 000) AS UNEXPLAINED DEBTORS IN SPITE OF THE FA CT THAT THE CONCERNED SEIZED PAPERS CLEARLY INDICATE THAT NOTHING WAS REC EIVABLE FROM SUCH DEBTORS. THE ADDITION BE DELETED. 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. C.I.T.(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 37 35 870/- COMPRISING OF SEVERAL FIGURES MADE BY THE A.O. AND CONSIDERING RE LIEF GRANTED BY THE LD. C.I.T.(A) WHICH ADDITION IS CONTRARY TO THE PROVISI ONS ENSHRINED IN CH.XIV-B OF THE ACT. THE ADDITION BE QUASHED. THE FIGURE OF A DDITION UNDER CHALLENGE IS ARRIVED AT AS PER NOTE ENCLOSED FORMING PART OF THI S GROUND OF APPEAL. 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN ENHANCING THE UNDISC LOSED INCOME BY AN AMOUNT OF RS.5 90 000/- WITHOUT ANY PROPER EVIDENCE . THE ADDITION RELATES TO PAPER APPEARING ON P.79 OF THE COMPILATION. THE APPELLANT SUBMITS THAT THE FIGURE OF RS.5 90 000/- IS COMPRISED OF TWO CRE DIT ENTRIES AND NET FIGURE OF RS.20 20 000/- ADDED BY ASSESSING OFFICER AND APPEL LANT SUBMITS SUCH CREDIT ENTRIES ARE NOT ASSESSABLE AS UNDISCLOSED INCOME. IN VIEW OF THIS ENHANCEMENT WAS WITHOUT JURISDICTION AND IT BE QUAS HED. 7) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW AND ALTERNATIVELY AND WITHOUT PREJUDICE TO ADDITIONAL G ROUNDS RAISED THE LD. C.I.T.(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION MADE BY A.O. OF RS.3 69 427/- AS POINTED OUT SEPARATELY THAT THE AD DITION DOES NOT PERTAIN TO THE BLOCK ASSESSMENT PERIOD OF 10YEARS AND THEREFOR E BE QUASHED. THE ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE READ AS UNDER : 1) WHETHER BLOCK ASSESSMENT MADE FOR THE BLOCK ASS ESSMENT PERIOD A.YRS. 1988-89 TO 1998-99 WHICH IS FOR MORE THAN 10 YEARS IS VITIATED IN LAW SINCE PERUSAL OF THE RECORDS INDICATES THAT UNDISCL OSED INCOME HAS BEEN ASSESSED FOR 11 YEARS? 2) WHETHER THE AMOUNT OF RS. 12 00 000/- (RS. 6 00 000 + RS.6 00 000/-) INCLUDED IN THE FIGURE OF RS. 26 10 000/- AS UNDISC LOSED INCOME AND ASSESSED AND UPHELD BY LD. CIT(A) IS WITHOUT ANY SPECIFIC BL OCK ASSESSMENT YEAR AND THEREFORE COULD NOT BE ASSESSED AS SUCH IN 10 YEAR S BLOCK PERIOD AND THEREFORE BLOCK ASSESSMENT IS VITIATED IN LAW? 3. AT THE VERY OUT SET LD COUNSEL FOR THE ASSESSEE RE FERRED TO THE ABOVE ADDITIONAL GROUNDS AND DEMONSTRATED THE LEGAL NATURE O F THE ISSUE AND PRAYED FOR ADMISSION OF THE SAME. ON FINDING THE MERITS IN THE ARGUMENTS OF THE ASSESSEE AND RELYING OF THE APEX COURTS JUDGMENT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION (299 ITR 383)(SC) WE AGREE WITH THE ARGUM ENTS OF THE COUNSEL AND PROCEED TO ADMIT THE SAID ADDITIONAL GROUND IN VIEW O F THE SAID SUPREME COURT ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 3 JUDGMENT. FURTHER LD COUNSEL MENTIONED THAT THE ISSU ES RAISED IN THE ORIGINAL GROUNDS ARE OF BOTH LEGAL AN FACTUAL AND ISSUES RELATI NG THE MERITS OF THE ADDITIONS ARE NOT PRESSED IF THE ISSUES RELATING TO THE VALIDITY OF THE BLOCK ASSESSMENT IS DECIDED IN HIS FAVOUR. ACCORDINGLY WE PROCEED TO ADJ UDICATE THE LEGAL ISSUE OF THE VALIDITY OF THE BLOCK ASSESSMENT RAISED IN THE FIRST GROUND OF THE CONCISED ONES NARRATED ABOVE. 4. RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNER IN SHREE MAHALAXMI JEWELLERS ALONG WITH ANOTHER PARTNER NAMED B. F. SONI. THERE WAS A SEARCH AND SEIZURE OPERATIONS U/S. 132 OF THE ACT ON T HE ASSESSEE VIDE THE AUTHORIZATION DATED 7.12.1998 IN THE NAME OF THE ASS ESSEE. THE SEARCH COMMENCED ON 8.12.98 AND THE SEARCH WAS FINALLY CONCLUDED ON THIS ASSESSEE ON 24.12.98 AT 5.45 P.M. SUBSEQUENTLY THE BLOCK ASSESSMENT PROCE EDINGS COMMENCED WITH ISSUE OF NOTICE U/ 158BC ON 3.3.1999 AND THE ASSESSEE FIL ED THE BLOCK RETURN WITH NIL UNDISCLOSED INCOME. FINALLY THE ASSESSMENT WAS COM PLETED ON 31.1.2001 AND THE UNDISCLOSED INCOME WAS DETERMINED AT RS.53 74 584/- AFTER MAKING CERTAIN ADDITIONS. 5. AGGRIEVED WITH THE ABOVE BLOCK ASSESSMENT THE AS SESSEE FILED AN APPEAL BEFORE THE CIT(A). DURING THE FIRST APPELLATE PROCEEDIN GS ASSESSEE MADE VARIOUS SUBMISSIONS BOTH ON LEGAL AS WELL AS ON FACTS RELATI NG TO THE MERITS OF THE ISSUE. AT THE END OF THE PROCEEDINGS CIT(A) GAVE PART RELIEF AN D CONFIRMED THE ADDITIONS PARTLY. IN FACT CIT(A) GAVE A NOTICE FOR ENHANCEME NT OF INCOME AND ENHANCED THE SAME BY 5.9 LAKHS. ASSESSEE RAISED THE ISSUE OF VAL IDITY OF THE BLOCK ASSESSMENT STATING THAT THE IMPUGNED BLOCK ASSESSMENT DATED 30 .1.2001 IS BARRED BY LIMITATION U/S 158BE OF THE ACT READ WITH ITS EXPLANATION 2(A). AS PER THE ASSESSEE THE IMPUGNED ASSESSMENT SHOULD HAVE BEEN COMPLETED ON O R BEFORE 31.12.2000 IE TWO YEARS FROM THE END OF DECEMBER 1998. CIT(A) CONSIDERED VARIOUS SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM AND THE DETAILS OF THESE SUBMISSION AS NARRATED IN PARA 2 OF THE IMPUGNED ORDER ARE AS FOLLOWS. 2.1 THE ARGUMENTS IN SUPPORT OF THIS LEGAL GROUND SUBMITTED BY THE APPELLANT ARE AS UNDER :- I) IT IS SUBMITTED THAT AS PER ANNEXURE A OF COMP ILATION THE SEARCH COMMENCED ON 8.12.1998 AT 6.20 A.M. AND ENDED AT 11 .00 P.M. SAME DAY. IT IS SUBMITTED THAT IT IS TRUE THAT ORDER U/S 132( 3) DT. 8.12.1998 WAS DULY ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 4 SERVED ON PARTNER JETHMAL BUT SERVICE OF SUCH ORDE R I.E. 132(3) SHALL NOT BE DEEMED TO BE SEIZURE OF SUCH BOOKS OF ACCOUNT DOCU MENT MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLES OR THING UNDER EXPLANATION TO SUB SECTION (3) OF SECTION 132 W.E.F. 1.4.1989. II) IT IS SUBMITTED THAT SECTION 158BE READ WITH EX PLANATION 2(A) CLEARLY PROCLAIM FOLLOWING POSITION :- THE ORDER UNDER SECTION 158BC SHALL BE PASSED WIT HIN 2 YEARS FROM THE END OF THE MONTH IN WHICH LAST AUTHORIZATION FO R SEARCH U/S 132 WAS EXECUTED. AND EXPLANATION 2(A) AGAIN CLEARLY PROCLAIM:- IN CASE OF SEARCH ON THE CONCLUSION OF SEARCH AS RECORDED IN THE LAST PANCHANAMA DRAWN IN RELATION TO ANY PERSON IN WHICH CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED; III) IT IS SUBMITTED THAT THE WARRANT OF AUTHORIZAT ION WAS ISSUED IN THE CASE OF JETHMAL F. SONI DATED 7.12.1998 AND THE SEARCH C ONCLUDED NEXT DATE ON 8.12.1998. IT IS SUBMITTED THAT THERE WAS NO SECOND WARRANT OF AUTHORIZATION AGAINST MR. JETHMAL F. SONI ON ANY DA Y AFTER 8.12.1998. IV) IT IS SUBMITTED THAT THE SECOND PANCHANAMA ON 2 4.12.1998 WAS WITHOUT ANY FRESH WARRANT OF AUTHORIZATION BUT WAS MERELY AS CLAIMED IN PARA 2 THAT AS TODAY SEARCH WAS IN CONTINUATION OF THE PROCEEDINGS ON 8.12.1998 (I.E. ORDER U/S 132(3) DATED 8.12.1998. IT IS SUBMITTED THAT THERE IS ABSOLUTELY NO IOTA OF DOUBT THAT SEARCH WAS FINALIZED EARLIER AS PER THE PANCHANAMA DATED 8.12. 1998 AND ANY FURTHER PROCEEDINGS TO COMPLY WITH THE PROVISIONS O F SECTION 132(3) READ WITH ITS EXPLANATION CANNOT EVER BE DEEMED TO BE SEIZUR E. THE APPELLANT ALSO RELIED ON DECISION OF BOMBAY HIG H COURT IN THE CASE OF CIT V. MRS. SANDHYA P. NAIK REPORTED IN 253 ITR 543 WHEREIN TH E DECISION OF PUNE BENCH IN THE MATTER OF ANANTA N. NAIK V. DCIT REPORTED IN 11 2 TAXMAN 281 IS APPROVED. THE APPELLANT HAS ALSO PLACED RELIANCE ON FOLLOWING CASE LAWS :- EAGLE FLASK INDUSTRIES P. LTD. 72 ITD 455 CAL VIESI ALPINE IND GMBLP V. ITO 246 ITR 745 2.2 THE (REMAND) REPORT OF THE ASSESSING OFFICER WA S CALLED FOR IN THIS REGARD AND THE ASSESSING OFFICER HAS SUBMITTED HIS REPORT VIDE HIS LETTER DATED 19.7.2005. THE RELEVANT PORTION OF THE ASSESSING OFFICERS REPORT IS REPRODUCED AS UNDER: 4. THE SEARCH ACTION IS AUTHORIZED UNDER SECTION 132 OF THE ACT. FOR A PERSON IN WHOSE CASE SEARCH ACTION IS AUTHORIZED AS PER SECTION 132 A WARRANT OF AUTHORIZATION IS ISSUED. THERE ARE TWO INGREDIENTS IN A WARRANT OF AUTHORIZATION. FIRST THE NAME OF THE PERSON OR PE RSONS WHOSE BOOKS OF ACCOUNTS DOCUMENTS OR UNDISCLOSED INCOME REFLECTED AS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING IS TO BE SEARCHED. SECOND THE PLACE I.E. BUILDING PLACE VESSEL VEHICLE OR AIRC RAFT LOCKER AT THESE PLACES WHICH HAS TO BE SEARCHED. THUS THIS OBVIOUSLY MEANS THAT A SEPARATE WARRANT OF AUTHORIZATION IS NECESSARY FOR EACH PLACE. THE WARRANT OF AUTHORIZATION WOULD HAVE THE NAME OF PERSON WHOSE BOOKS OF ACCOUN TS DOCUMENTS OR UNDISCLOSED INCOME REFLECTED AS MONEY BULLION JEW ELLERY OR OTHER VALUABLE ARTICLE OR THING IS TO BE SEARCHED. IF THERE ARE O NE OR MORE PERSONS WHOSE BOOKS ETC. IS TO BE SEARCHED AT THE SAME LOCATION O R PLACE THE WARRANT MAY ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 5 INCLUDE THE NAMES OF ALL THE PERSONS ON THE SAME WA RRANT OF AUTHORIZATION WHICH WOULD HAVE THE SAME ADDRESS OF PLACE TO BE SE ARCHED. THUS IT CAN BE SEEN THAT THERE CAN BE AND THERE USUALLY ARE MORE T HAN ONE WARRANT OF AUTHORIZATION IN THE NAME OF SAME PERSON FOR DIFFER ENT PLACES SEARCHED. OBVIOUSLY THE SEARCH WOULD BE CONCLUDED AT EACH OF SUCH PLACES INDIVIDUALLY. THUS SEARCH IN RESPECT OF EACH WARRANT OF AUTHORIZA TION WOULD GET CONCLUDED. WHAT HAPPENS WHEN THERE ARE MORE THAN ONE WARRANT O F AUTHORIZATION IN THE NAME OF SAME PERSON FOR PLACES INDIVIDUALLY. THUS SEARCH IN RESPECT OF EACH WARRANT OF AUTHORIZATION WOULD GET CONCLUDED. WHAT HAPPENS WHEN THERE ARE MORE THAN ONE WARRANT OF AUTHORIZATION IN THE NAME OF SAME PERSON FOR DIFFERENT PLACES SEARCHED? OBVIOUSLY THERE WOULD B E DIFFERENT DATES OF CONCLUSION OF SEARCH AT DIFFERENT PLACES FOR THE SA ME PERSON. WHAT WOULD BE THE LIMITATION DATE FOR COMPLETION OF BLOCK ASSESSM ENT U/S 158BC IN SUCH A CASE? THIS IS CLARIFIED IN THE EXPLANATION 2 TO SE CTION 158BE REPRODUCED EARLIER. IN SUCH A CASE THE LIMITATION WOULD BE C OMPUTED FROM THE CONCLUSION OF SEARCH AS RECORDED IN THE LAST PANCHANAMA DRAWN IN RELATION TO SUCH PERSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION H AS BEEN ISSUED. 5. WARRANTS ARE ISSUED TO SEARCH A PARTICULAR PREMI SES. IF WE GO THROUGH THE WARRANTS OF AUTHORIZATION WHICH WERE ISSUED BY DIT INVESTIGATION PUNE IN THIS GROUP OF CASES IT CAN BE SEEN THAT THERE WERE DIFFERENT WARRANTS FOR DIFFERENT PREMISES LIKE 1741 R.S. KEDARI ROAD FLAT NO.302 GIRNAR CLASSIC ETC. THE PERSONS COVERED BY THESE WARRANTS WERE SHREE MAH ALAXMI JEWELLERS JETHMAL F. SONI KISHORE J. SONI BABULAL F. SONI GOVIND SONI SURESH B. SONI AND THE PREMISES SPECIFIED WAS SHREE MAHALAXMI JEWE LLERS 1741 R.S. KEDARI ROAD PUNE 411 001. THE MAIN WARRANT WAS OF THE SH OP LOCATED AT 1741 R.S. KEDARI ROAD PUNE. THE SAID WARRANT CONTAINS NAME OF THE CASE MR. JETHAMAL F. SONI. A COPY OF THE WARRANT IS ENCLOSED FOR REA DY REFERENCE. THE SAID WARRANT WAS DULY EXECUTED ON 8.12.1998 AND THE PROC EEDINGS WERE COMPLETED AT THE PREMISES 1741 R.S. KEDARI ROAD P UNE ON 13.1.1999. THIS IS THE SAID PANCHANAMA IN COL. NO. A AGAINST WARRAN T IN THE CASE OF IT IS MENTIONED AS SHREE MAHALAXMI JEWELLERS AND OTHERS. HERE TO FIND OUT WHO ARE REFERRED TO AS OTHERS WE WILL HAVE TO REFER TO THE WARRANT FOR WHICH THE SAID PANCHANAMA WAS DRAWN. AS MENTIONED EARLIER WA RRANT OF AUTHORIZATION REFERRED IN THE SAID PANCHNAMA CONTAINS NAMES OF S HREE MAHALAXMI JEWELLERS JETHAMAL F. SONI KISHORE J. SONI BABUL AL F. SONI GOVIND SONI SURESH B. SON. THEREFORE IF WE READ PANCHANAMA AL ONG WITH WARRANT IT IS CLEAR THAT OTHERS MEANS THE OTHER PERSONS OTHER THAN MAHALAXMI JEWEL LERS MENTIONED IN THE WARRANT I.E. JETHAMAL F. SONI GO VIND SONI SURESH B. SONI AND OF COURSE JETHMAL SONI I.E. THE ASSESSEE IN T HIS APPEAL. 6. JETHAMAL F.SONI IS ONE OF THE PARTNERS IN THE FI RM SHREE MAHALAXMI JEWELLERS. SINCE THE LAST PANCHANAMA WAS DRAWN ON 13.1.1999 IN THE CASE OF JETHMAL F. SONI BASED ON THE WARRANTS ISSUED FOR TH E PREMISES AT 1741 R.S. KEDARI ROAD PUNE THEREFORE THE ASSESSMENT ORDER U/S 158BC MADE IN THE CASE OF JETHAMAL F. SONI IS NOT TIME BARRED BY LIMI TATION AS CLAIMED BY ASSESSEE. AS PER SECTION 158BE(1)(B) THE TIME LIMI T IS 2 YEARS FROM THE END OF THE MONTH IN WHICH THE LAST WARRANT OR AUTHORIZA TION WAS EXECUTED. IN EXPLANATION 2 IT IS CLARIFIED THAT THE AUTHORIZATIO N SHALL BE DEEMED TO HAVE BEEN EXECUTED O THE CONCLUSION OF SEARCH AS RECORDE D IN THE LAST PANCHANAMA DRAWN IN RELATION TO NAY PERSON IN WHOSE CASE THE W ARRANT OF AUTHORIZATION HAS BEEN ISSUED. ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 6 2.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE APPELLANT AND PERUSED THE MATERIAL ON RECORD. IN THIS REGARD IT MAY BE MEN TIONED THAT THE CASE LAWS RELIED UPON BY THE APPELLANT IN THIS REGARD ARE DISTINGUIS HABLE ON FACTS AND DO NOT APPLY TO THE APPELLANTS CASE. THE CASES MENTIONED ABOVE AN D OTHER SIMILAR CASES LAY DOWN CERTAIN WELL-ESTABLISHED PRINCIPLES OF LAW. THERE IS NO DISPUTE ABOUT SUCH PRINCIPLES. THE QUESTION IS ONE OF APPLICABILITY OF THE PRINCIP LES TO THE FACTS IN A GIVEN CASE. IT HAS BEEN A WELL-SETTLED VIEW THAT THE RATIO OF ANY DECISION MUST BE UNDERSTOOD IN THE BACKGROUND OF THAT CASE. WHAT IS OF ESSENCE IN A DECISION IS ITS RATIO AND NOT EVERY OBSERVATION FOUND THEREIN NOR WHAT LEGALLY FO LLOWS FROM THE VARIOUS OBSERVATIONS MADE IN IT. IT IS NOT A PROFITABLE TA SK TO EXTRACT A SUITABLE SENTENCE HERE AND THERE FROM A JUDGMENT AND TO BUILD UPON IT (VIDE AMBICA QUARRY WORKS V. STATE OF GUJARAT AIR 1987 SUPREME COURT 1073). IN MY HUMBLE VIEW THE PRINCIPLES ENUNCIATED IN THE CITED CASES DO NOT RENDER ANY HEL P TO THE APPELLANT IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN CASE OF THE APPELLANT LAST PANCHANAMA WAS DRAWN ON 13.1.99 FOR THE PREMISES 1741 R.S. KEDARI ROAD PUNE. THE WARRANT FOR THESE PREMISES WHICH IS NUMBERED 31 CONTAINS THE NAME OF SHREE MAHALAXMI J EWELLERS JETHAMAL F. SONI KISHORE J. SONI BABULAL F. SONI GOVIND SONI SURE SH B. SONI IN RESPECT OF PREMISES IN THE NAME OF M/S. SHREE MAHALAXMI JEWELLERS WHOSE NAMES APPEAR ON THE WARRANT OF AUTHORIZATION. ON THESE FACTS IT IS ABSOLUTELY CLEAR THAT LAST WARRANT IN RESPECT OF SHRI JETHMAL F. SONI WAS EXECUTED AT 1741 RS KEDAR I ROAD AND ACCORDINGLY LIMITATION IS TO BE RECKONED FROM THE LAST PANCHANA MA DRAWN IN RESPECT OF THESE PREMISES WHICH IS DATED 13.1.99. ACCORDINGLY THE B LOCK ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHICH LAST WARRANT OF AUTHORIZATION FOR SEARCH U/S 132 IN CASE OF THE APPELLANT WAS EXECUTED. ACCORDINGLY THE ADDITIONAL GROUND OF APPEAL PREFER RED BY THE APPELLANT WHICH SAYS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS B ARRED BY LIMITATION IS HELD TO HAVE NO MERIT AND IT FAILS. 6. AGGRIEVED WITH THE ABOVE FINDING OF THE CIT(A) T HE ASSESSEE FILED THE PRESENT APPEAL WITH THE ABOVE CITED GROUNDS AND THE ADDITION AL GROUNDS. TO START WITH WE RESTRICT OUR DISCUSSION TO THE GROUND RELATING THE VALIDITY OF THE BLOCK ASSESSMENT AND THE LIMITATION ISSUE. DURING THE PROCEEDINGS BEFORE US LD COUNSEL F ILED THE SYNOPSIS IN WRITING AND RELEVANT PARTS ARE AS FOLLOWS. IN THIS CASE SEARCH AND SEIZURE ACTION UNDER S. 1 32(1) WAS INITIATED IN VIEW OF WARRANT OF AUTHORIZATION DT. 7-12-1998. THE FOL LOWING ARE THE DETAILS OF PANCHANAMA DRAWN. 1) IN CASE OF SHRI JETHMAL SONI THE FIRST PANCHANAM A WAS DRAWN ON 8-12- 98. ON THAT DAY BOOKS/DOCUMENTS/LOOSE PAPERS AS PE R ANNEXURE A AND CASH OF RS. 45 000/- AS PER ANNEXURE B WAS SEARCHED AN D SEIZED AND THE PROHIBITORY ORDER UNDER S. 132(3) WAS CLAMPED. THE NEXT PANCHANAMA IS DT. 2412-98. ON THAT DATE THE SEARCH WAS FINALLY CONCLUDED AT 5.40 P.M. THEREAFTER NOTHIN G WAS SEARCHED OR FOUND. THE ASSESSMENT ACCORDINGLY SHOULD HAVE BEEN COMPLE TED WITHIN 2 YEARS FROM THE END OF MONTH DECEMBER 1998 I.E. W ITHIN TWO YEARS FROM 31- ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 7 12-1998 AND ON OR BEFORE 31-12-2000. ACCORDINGLY ASSESSMENT COMPLETED ON 31-1-2001 IS BARRED BY LIMITATION AS PER S. 158B E OF THE ACT. 2) THE INDEPENDENT AND SEPARATE WARRANTS OF AUTHORI ZATIONS WERE ISSUED IN THE NAMES OF SHRI JETHMAL SONI (ITA/748/PN/04 A ND SHRI BABULAL SONI ITA 768/PN/04) DT. 8-12-1998. IN BOTH THE CASES THE WAR RANTS OF AUTHORIZATION WERE EXECUTED DRAWING PANCHANAMA CONCLUDING THE SEA RCH ON 24-12-1998. IN THE CASE OF M/S SHRI MAHALAXMI JEWELLERS 1741 R. S. KEDARI ROAD PUNE 1 THE WARRANT OF AUTHORIZATION WAS ISSUED IN F.NO. 45 WHICH WAS ADDRESSED AS:- WHEREAS I HAVE REASON TO SUSPECT .. ARE TO BE FOUND IN M/S SHRI MAHALAXMI JEWELLERS 1741 R.S. KEDARI ROAD PUNE.. THIS IS TO AUTHORIZE YOU TO ENTER AND SEARCH SAID BUILDING (PAGE 32). THIS WAS THE FIRST AND LAST AUTHORIZATION. THERE W AS NO SECOND OR ANY SUBSEQUENT AUTHORIZATION. FROM THE ABOVE IT IS CLEAR THAT THE INDEPENDENT (IN DEPENDENT OF PARTNERS) WARRANT OF AUTHORIZATION WAS ISSUED TO M/ S SRI MAHALAXMI JEWELLERS (ITA 1395/PN/05) AND IN THIS WARRANT OF AUTHORIZATI ON (THE WORDS AND OTHERS WERE ABSENT) SUBSEQUENT PANCHANMAS DRAWN ON 9-12-98 10-12-98 15-12-98 22- 12-98 AND DT. 13-1-99 THE WORDS SRI MAHALAXMI JEW LLERS AND OTHERS HAVE BEEN ADDED. THE DEPTT. PRESUMED THAT THE WORDS AND OTHERS MEA N PARTNERS SHRI JETHMAL SONI AND SHRI BABULAL SONI. THERE IS NO DE EMING PROVISION IN S. 132 THAT FIRM INCLUDES PARTNERS ALSO. IN THE ORIGINAL WARRANT OF AUTHORIZATION THE WORDS AND OTHER ARE ABSENT. THE NAMES OF PARTNERS ARE APPEARING IN EARLIER PART OF F. NO. 45 INDICATING IF SUMMONS IS ISSUED HE WOULD NOT PRODU CE OR CAUSE TO BE PRODUCED SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS REQUIRED BY SUCH SUMMONS OR NOTICE BUT THE AUTHORIZATION TO SEARCH AND ENTER INTO PREMISES WAS IN THE NAME OF SRI MAHALAXMI JEWELLERS. THE WARRANT OF AUTHORIZATION IS DT. 7-12-98: AS PER WARRANT OF AUTHORIZATION ISSUED IN THE NAME OF M/S SRI MAHALAXMI JEWELLERS SEARCH WAS CONDUCTED ON 8-12-1998 AND THERE WAS A GAP OF 16 DAYS TILL IT WA S FINALLY CONCLUDED ON 22- 12-98. IF DATE OF FINAL CONCLUSION OF SEARCH IS AS SUMED TO BE AS 13-1-1999 THEN THERE WAS A GAP OR 35 DAYS. THERE IS NO EXPLA NATION WHATSOEVER WITH REGARDS TO THIS PERIOD BETWEEN TWO INTERVENING DATE S. ON THIS COUNT ALSO AND BECAUSE OF UNEXPLAINED GAP THE SEARCH CANNOT BE REG ARDED AS LEGAL. (PAGE 9) THE PANCHANAMA ITSELF REVEALS (DT. 18-12-1998 22-1 2-98 AND 13-1-99) NOTHING WAS SEIZED ON THOSE DATES. NOR WAS ANYTHIN G FOUND ON THOSE DATES. IN FACT NO SEARCH WAS CONDUCTED. FOR PURPOSES OF S. 158BE THE ORDER UNDER S. 132(3) IS TO BE IGNORED. THE SAID PANCHANMAS WERE NOT RELATING TO ANY SEAR CH AND CONSEQUENTLY ARE NOT THE PANCHANAMAS OF THE TYPE WHICH FIND MENTION IN THE SAID EXPLANATION 2(A) TO S. 158BE INSERTED WITH RET ROSPECTIVE EFFECT FROM 01- 07-1995. ON EACH DATE OF PANCHANAMA FROM 8-12-98 ONWARDS THE RESTRAINT ORDER WAS CLAMPED UNDER S. 132(3) WITHOUT REVOKING THE EARLIER ORDER. ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 8 IN THE ASSESSMENT ORDER FOR SRI MAHALAXMI JEWELLERS THERE IS NO REFERENCE TO PANCHANAMA DT. 18-12-98 22-12-98 AND 13-1-1999. THE A.O. ALSO PROBABLY IS NOT ACCEPTING THAT THERE WAS ANY S EARCH ACTION ON THOSE DAYS(PAGE 3 OF THE ASSESSMENT ORDER). THE UNDISCLOS ED INCOME ASSESSED IS ONLY ON THE BASIS OF DOCUMENTS/EVIDENCE SEIZED AT T HE RESIDENCE ONLY. NO REFERENCE TO THE FIRM. 7. FURTHER LD COUNSEL FILED A LETTER DATED 29.7.2010 STATING THAT THE LEGAL ISSUE UNDER CONSIDERATION HAS REACHED FINALITY AT THE LEVEL OF THE SUPREME COURT (321 ITR 165 (ST) VIDE THE SLP FILED BY THE REVENUE IN THE C ASE OF JUDGMENT OF DELHI HIGH COURT IN THE CASE OF DEEPAK AGARWAL (308 ITR 116) FOR THE PROPOSITION THAT THE BLOCK ASSESSMENT HAS TO BE COMPLETED WITH IN TWO YEARS AND THE PURPORTED SEARCH AFTER A GAP OF 53 DAYS WAS NOT A SEARCH AT ALL. FURTHER REFERRIN G TO THE PROVISIONS OF SECTION 158BE AND THE EXPLANATION 2(A) LD COUNSEL ARGUED TH AT THE EXPRESSION LAST PANCHANAMA DRAWN SHOULD MEAN A VALID PANCHANAMA AND NOT THE ONE DRAW N BY THE REVENUE WITH THE VIEW TO BUY MORE TIME WHICH IS NOT MEANT BY THE PROVISIONS OF THE ACT AND NOT INTENDED BY THE LEGISLATURE. IN THIS REG ARD MR KULKARNI FILED A COMPILATION OF THE CITATIONS TO SUPPORT HIS ARGUMENT S. 8. ON THE OTHER HAND LD DR FOR THE REVENUE HEAVILY RE LIED ON THE ORDERS OF THE AO AND THE CIT(A). FURTHER HE HIGHLIGHTED THE FACT T HAT THE ASSESSEE IS PARTNER OF THE FIRM AND HE IS COVERED BY THE EXPRESSION OTHERS A PPEARING IN THE WOA DRAWN IN THE NAME OF THE FIRM. HE ALSO RELIED ON THE VIEWS EXP RESSED BY THE AO IN THE REMAND REPORT WHICH IS REPRODUCED IN THE PRECEDING PARAGRAP HS OF THIS ORDER. FURTHER SRI R. KAUSHAL LD CIT DR STATED THAT THE IN THE CIRCUMSTANCES WHERE BOTH THE FIRM AND ITS PARTNERS ARE COVERED BY THE PROVISIONS O F SECTION 132 OF THE ACT A GROUP APPROACH IS NECESSARY IN MATTERS OF INTERPRETATION OF THE PROVISIONS. 9. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF T HE REVENUE AND THE CITATIONS RELIED ON BY THE ASSESSEES COUNSEL. IN B RIEF THE CASE OF THE REVENUE IS THAT THE EXISTENCE OF AN EXPRESSION OTHERS ON THE W OA/ PANCHANAMA DRAWN IN THE NAME OF THE FIRM COVERS OF THE NAME OF THE ASSESSEE A S THE ASSESSEE IS PARTNER OF THE SAID FIRM TOO. THEREFORE THE DATE OF CLOSURE OF TH E SEARCH IN THE NAME OF THE FIRM SHOULD BE THE DATE OF FINAL CONCLUSION OF THE SEARC H IN THE CASE OF ITS PARTNER TOO. FURTHER THE CASE OF THE REVENUE IS THAT SO LONG AS THE SEARCH ON THE FIRM IS IN PROGRESS THE SEARCH IN THE CASE OF THE PARTNER OF THAT FIRM CANNOT BE CONCLUDED AND ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 9 THEREFORE THE CONCLUSION REPORTED VIDE THE PANCHANAMA DATED 24 TH DECEMBER IS NOT TO BE RECKONED WITH. PER CONTRA THE CASE OF THE ASSESSEE IS THAT THE SEARCH IS ALWAYS PERSON SPECIFIC AND THE PERSON IS DEFINED IN SECTION 2(31) OF THE ACT. IN THE CIRCUMSTANCES WHERE THE ASSESSEE-INDIVIDUAL IS SEARCH ED BY A WARRANT OF AUTHORIZATION (WOA) AND THE SAID SEARCH IS EFFECTIVEL Y CONCLUDED ON 8 TH DECEMBER AND FORMALLY AND FINALLY CONCLUDED ON 24.12.1998 AS PER THE PROVISIONS OF SECTION 158BE READ WITH ITS EXPLANATION 2(A) THE ASSESSMENT HAS TO BE COMPLETED WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH UNDER SECTION 132WAS EXECUTED IN CASES WHER E A SEARCH IS INITIATED . THEREFORE AS PER THE ASSESSEE THE BLOCK ASSESSMENT SH OULD HAVE BEEN COMPLETED ON OR BEFORE 31.12.2000 AND NOT ON 31.1.2001 AS DONE BY THE AO IN THIS CASE. 10. IN THE LIGHT OF THE ABOVE RIVAL POSITIONS WE HA VE PERUSED THE FINDING OF THE SUPREME COURT IN THE CASE OF DEEPAK AGARWAL (SUPRA) AND THE REPORTED PORTION FROM THE SAID JUDGMENT READ AS FOLLOWS. BLOCK ASSESSMENT : LIMITATION FROM DATE OF LAST PANCHANAMA (9-7-2009): THEIR LORDSHIPS S.H.KAPADIA AND AFTAB ALAM JJ. DISM ISSED THE DEPARTMENTS SPECIAL LEAVE PETITION AGAINST THE JUDGMENT DATE AU GUST 12 2008 OF THE DELHI HIGH COURT IN I.T.A. NO. 953 OF 2008 REPORTED IN 308 ITR 116 WHEREBY THE HIGH COURT FOLLOWING 294 ITR 444 AFFIRMED THE VIEW OF THE TRIB UNAL THAT THE BLOCK ASSESSMENT WAS BARRED BY LIMITATION BECAUSE THE GAP BETWEEN THE SEARCH AND THE PURPORTED LAST SEARCH WAS APPROXIMATELY 53 DAYS FOR WHICH THERE WAS NO EXPLANATION AND THE REVOCATION ORDER DID NOT GIVE AN INDICATIO N THAT THE PROHIBITORY ORDER WAS PASSED MERELY FOR CONTINUING THE SEARCH P OSSIBLY FOR THE PURPOSES OF EXTENDING THE LIMITATION. THE TRIBUNAL HAD COME TO A CONCLUSION OF FACT THAT THE SECOND PURPORTED SEARCH WAS NOT A SEARCH AT ALL AND ALL THAT WAS REQUIRED TO BE SEARCH AND SEIZED HAD BEEN CONCLUDED ON THE EARL IER DATE ITSELF : CIT V. DEEPAK AGARWAL : S.L.P (C) NO. 16360 OF 2 009. 11. FURTHER WE HAVE ALSO PERUSED OTHER CITATIONS OF TH E ISSUE OF VALID PANCHANAMA REFERRED TO IN THE CLAUSE (A) OF THE CLARIFICATORY EXPL ANATION 2 TO SECTION 158BE OF THE ACT. SOME OF THE CONCLUSIONS OF THE SAID CITATION A RE NARRATED HERE FOR READY REFERENCE. THEY ARE: A. CIT VS. SARB CONSULATE MARINE PRODUCTS (P) LTD. 294 ITR 444 (DELHI). CONCLUSION : SEARCH AND SEIZURE OPERATIONS STOOD CONCLUDED AGAIN ST THE ASSESSEE ON 6 TH NOV. 1996 WHEN SOME DOCUMENTS WERE SEIZED AND A PANCHNAMA WAS DRAWN AND NOT ON 14 TH SEPT. 1998 WHEN ANOTHER PANCHNAMA WAS DRAWN WITHOUT ANY SEIZURE BUT ONLY A RESTRAINT ORDE R UNDER S. 132(3) WHICH ALSO WAS NOT VALID AND THEREFORE LIMITATION STARTED F ROM 6 TH NOV. 1996 AND ASSESSMENT ORDER PASSED ON 30 TH SEPT. 1998 WAS BARRED BY LIMITATION. B. CIT VS. MRS. SANDHYA P. NAIK 253 ITR 534 (2002)(BOM ): ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 10 CONCLUSION: WHEN THE SEARCH WAS CONCLUDED ON 20 TH OCT. 1996 ITSELF THE SUBSEQUENT PROCEEDINGS IN WHICH A SECOND RESTRAINT ORDE R UNDER S. 132(3) WAS PASSED IN RESPECT OF SEALED CUPBOARD COULD NOT BE CON SIDERED AS PART OF EXECUTION OF SEARCH PROCEEDINGS WHICH HAD ALREADY CON CLUDED AND THEREFORE THE IMPUGNED BLOCK ASSESSMENT MADE ON 31 ST DEC. 1997 I.E. AFTER 31 ST OCT. 1997 WAS BARRED BY LIMITATION AND ALSO INVALID. C. B.K. NOWLAKHA VS. UNION OF INDIA & ORS. 192 ITR 4 36 (1991)(DEL): CONCLUSION: ORDER UNDER S. 132(3) CAN BE PASSED ONLY WHERE IT IS NO T PRACTICABLE TO SEIZE GOODS FOR REASONS OTHER THAN THOSE MENTIONED IN SECOND PROVISO TO S. 132(1) AND NOT TO CIRCUMVENT PROVISIONS OF S. 132(1). D. DEPUTY CIT VS. ADOLF PATRIC PINTO 100 ITD 191 ( MUM): CONCLUSION: IN THE FACTS AND CIRCUMSTANCES OF THE CASE LAST AUT HORISATION WAS EXECUTED ON 19 TH JUNE 1998 WHEN SCRIPS WERE SEIZED AND ON ORDER UNDER S. 132(3) WAS PASSED AND NOT ON 1 ST AUG. 1998 WHEN THEY WERE RELEASED AND THUS BLOCK ASSESSMENT COMPLETED ON 28 TH AUG. 2000 WAS BARRED BY LIMITATION UNDER S. 158BE. E. CIT & ANR. VS. T.S. CHANDRASHEKAR THRO LRS. 221 CT R (KAR) 385 (2009) CONCLUSION: SEARCH OF ASSESSEES OFFICE AND BUSINESS PREMISES CON DUCTED ON 12 TH DEC. 1995 SAME CONCLUDED ON THAT VERY DAY CASH S EIZED PROHIBITORY ORDER PASSED AND PANCHNAMA DRAWN WAS THE LAST PANCHNAMA EV IDENCING CONCLUSION OF SEARCH FOR PURPOSES OF LIMITATION UNDER S. 158BE AND N OT PANCHNAMAS DRAWN ON FURTHER SEARCHES CONDUCTED ON 19 TH JAN. 1996 7 TH FEB. 1996 AND 12 TH FEB. 1996 ON WHICH DATES NO SEIZURE TOOK PLACE. F. CIT VS. DEEPAK AGGARWAL 308 ITR 116 (2009) (DEL ) CONCLUSION: PROHIBITORY ORDER UNDER S. 132(3) PASSED ON 31 ST OCT. 2000 MERELY FOR CONTINUING THE SEARCH POSSIBLY FOR THE PURPOS E OF EXTENDING THE LIMITATION TRIBUNAL WAS JUSTIFIED IN HOLDING THAT T HE SEARCH STOOD CONCLUDED ON 31 ST OCT. 2000 ITSELF AND NOT ON 23 RD DEC. 2000 AND THEREFORE THE ASSESSMENT ORDER PASSED ON 27 TH DEC. 2002 WAS BARRED BY LIMITATION UNDER S. 158BE. G. CIT VS. KUWER INDUSTRIES LTD. 191 CTR 413 (2004)( DEL) CONCLUSION: SEARCH HAVING BEEN CONCLUDED ON 21 ST MARCH 1996 AS PER PANCHNAMA DT. 20 TH MARCH 1996 THE ASSESSMENT ORDER PASSED ON 30 TH JUNE 1997 WAS BARRED BY LIMITATION; ANOTHER PANCHNAMA SAID TO HAVE BEEN MADE SUBSEQUENTLY ON 27 TH FEB. 1997 WHICH WAS NEITHER CONSIDERED BY THE A.O NO R BY THE TRIBUNAL AND WAS NOT PART OF RECORD CANNOT BE RELIED UPON. H. NANDLAL M. GANDHI VS. ASSISTANT COMMISSIONER OF I NCOME TAX ITAT MUMBAI E THIRD MEMBER BENCH (2008) 13 DTR (MUM) (T M ) (TRIB) 35 CONCLUSION : ASSESSEES PREMISES HAVING BEEN COMPLETELY SEARCHED ON 29 TH JULY 1997 WHEN ASSETS WERE INVENTORISED AND PANCHNAM A PREPARED LIMITATION UNDER S. 158BE WOULD BE RECKONED QUA 29 TH JULY 1997 AND NOT QUA 8 TH SEPT. 1997 WHEN PROHIBITORY ORDER IN RESPECT OF SHARES WAS REV OKED AND SECOND PANCHNAMA WAS PREPARED AS THE SECOND PANCHNAMA COULD NOT BE SAID TO HAVE BEEN PREPARED IN PURSUANCE TO WARRANT OF AUTHORIZATION H ENCE BLOCK ASSESSMENT MADE ON 30 TH SEPT. 1999 WAS BARRED BY LIMITATION. ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 11 12. FACTUALLY THE SEARCH ON THE ASSESSEE WAS COMME NCED ON 8 TH DECEMBER AND THE SAME WAS TEMPORARILY CONCLUDED ON THE SAME DATE. ON THIS DATE A PROHIBITORY ORDERS WAS CLAMPED ON THE ASSESSEES PREMISES VIDE THE ORDER DATED 8 TH DECEMBER 1998. SUBSEQUENTLY THE SEARCH WAS FINALLY CONCLUDED ON 24 TH DECEMBER 1998 AS SEEN FROM THE PANCHANAMA ANNEXED TO THE APPEAL MEMO. THERE IS NO DETAILS ON THE REVOKING OF THE SAID PO ON 24 TH DECEMBER 1998. ON THIS DATE THE REVENUE REGISTERED THE EVENTS OF SEIZURE OF BUNDLE OF PAPERS (A NNEX C) AND RECORDING OF A STATEMENT OF THE ASSESSEE BEFORE FINALLY CONCLUDING THE SEARCH AT 5.40 PM. NOTHING IS MENTIONED ABOUT THE PO AS SEEN FROM THE ITEM NO 9 OF THE PANCHANAMA DATED 24 TH DECEMBER 1998. THERE IS NO EXPLANATION OF THE REVENU E AS TO THE EFFECT OF THE SAID PO WHETHER IT IS STILL IN FORCE BEYOND 24 TH DECEMBER 1998 OR NOT. REVENUE TAKES THE VIEW THAT THIS UNREVOKED PO CLAMPED ON 8 TH DECEMBER SHOULD NOT BE DEEMED LIFTED TILL THE GROUP SEARCHES ARE FINALLY CONCLUDED. IT TAKES THE STRENGTH FROM THE EXPRESSION OTHERS MENTIONED IN THE WOA/ PANCHANAMA IN THE CASE OF THE FIRM. 13. WE HAVE GIVEN OUR ATTENTION TO THIS ARGUMENT OF T HE REVENUE AND FIND THIS ARGUMENT IS VERY GENERAL IN NATURE. WITH THE USE OF EXP RESSIONS SUCH AS OTHERS A PERSON CANNOT BE SEARCHED. THERE IS A DEFINED PROCEDURE IN THE PROVISIONS OF SECTION 132 OF THE ACT THE CONDITIONS TO BE MET FOR INVOKING THE PROVISIONS OF SECTION 132 IN A CASE OF ANY PERSON. IN SO FAR AS THE WARRANT OF AUT HORIZATION ISSUED IN THE NAME OF M/S SRI MAHALAXMI JEWELLERS IS CONCERNED WE FIND THAT THE SEARCH WAS COMMENCED ON 8-12-1998 AND THERE WAS A GAP OF 16 DAY S TILL IT WAS EFFECTIVELY CONCLUDED ON 22-12-98 AS ARGUED BY THE COUNSEL AND F INALLY CONCLUDED ON 13-1- 1999 IE WITH THE GAP OR 35 DAYS. THIS ISSUE SHALL B E DEALT WHILE DEALING WITH THE APPEAL OF THE FIRM AND WE RESTRICT OURSELVES TO THE ISS UES RAISED IN THE PRESENT APPEAL. THUS CONSIDERING THE PRINCIPLES OF SANCTITY OF THE SEARCH ON A PERSON WHICH HAS THE EFFECT OF BREACHING THE RIGHTS OF THE CITIZEN S WE ARE OF THE OPINION A SEARCH ACTION CANNOT BE MOUNTED WITHOUT PROPER NAME AND ADDRE SS OF THE PERSON TO BE SEARCHED AND THE DETAILS OF THE PREMISES TO BE SEARCHE D MENTIONED CLEARLY AND SPECIFICALLY ON THE FACE OF THE WOA AND PANCHANAMA THEREOF. THERE SHOULD NOT BE ANY SCOPE OF INTERPRETATION OF THE EXPRESSION IN THESE MATTERS. THE EXPRESSIONS SUCH OTHERS CANNOT GIVE AUTHORITY TO THE REVENUE TO MOUNT SEARCH OR EXTEND THE CONCLUDED SEARCH PROCEEDINGS. IN THE INSTANT CASE AS SEEN FROM PARA 8 OF THE PANCHANAMA DATED 24 TH DECEMBER 1998 THE SEARCH PROCEEDINGS WERE CLOSED ON ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 12 24/12/1998 AT 5.40 PM AS FIALLY CONCLUDED AFTER RECORDING OF THE STATEMENT OF THE ASSESSEE AND AFTER SEIZING A BUNDLE OF PAPERS GIVEN I N THE ANNEXURE-C . IN THESE FACTUAL CIRCUMSTANCES WE ARE OF THE OPINION THE SEA RCH IS CONCLUDED IN THE MONTH OF DECEMBER 1998 AND IMPUGNED BLOCK ASSESSMENT MUST HAVE BEEN COMPLETED BEFORE END OF THE MONTH OF DECEMBER 2000. WE ARE NOT W ITH THE REVENUE ON THE ARGUMENT THAT THE PO CLAMPED ON 8 TH DECEMBER IS IN FORCE EVEN AFTER THE SEARCH WAS FINALLY CONCLUDED ON 24 TH DECEMBER TILL THE SEARCH ON THE FIRM IS FINALLY CONCLUDED IN JANUARY 1999 VIDE THE PANCHANAMA DRAWN IN THE CASE OF THE ASSESSEES FIRM. IT IS IN THE NORMAL COURSE OF THE SEARCH PROCEEDIN GS THE SEACH CANNOT BE RECORDED CONCLUDED ON ONE HAND AND PO IS CONTINUING B EYOND 24 TH DECEMBER ON THE OTHER. ONCE THE SEARCH IS COMPLETED THE PO ON THE AS SESSEES PREMISE SHOULD BE DEEMED EXPIRED ON THE SAME DATE AND TIME. AS SUCH TH ERE IS NO EXPLANATION OF THE REVENUE TO ACCOUNT FOR EXTENSION OF THE IMPUGNED PO B EYOND 24 TH DECEMBER. ON THIS COUNT ALSO AND IN VIEW OF UNEXPLAINED GAP THE DURATION BEYOND 24 TH DECEMBER CANNOT BE REGARDED AS LEGAL IN VIEW OF THE ABOVE CITE D SUPREME COURTS JUDGMENT IN THE CASE OF DEEPAK AGARWAL (SUPRA). THUS WE HAVE HE LD THAT THE EXPRESSIONS OTHERS USED IN THE WOA DRAWN IN THE NAME OF THE OT HER PERSONS CANNOT COVER THE CASES OF THE ASSESSEE. FURTHER IT IS OUR OPINION THAT THE 14. IT IS A SETTLED LAW THAT THE PERSON CANNOT BE SU BJECTED TO SEARCH WITH THIS KIND OF WARRANT BEARING NO NAME OF THE PERSON TO BE AGA IN SEARCHED AND THEREFORE WE HAVE TO DISMISS THIS KIND OF GENERALIZED ARGUMENTS . IT IS TO BE NOTED THAT THE SEARCHING A PERSON INVOLVES THE BREACHING THE PERSONAL RIGHTS OF THE PERSONS GUARANTEED BY THE CONSTITUTION OF INDIA AND WOA HAS TO BEAR SPECIFIC NAME OF THE PERSON TO BE SEARCHED. IN THE LIGHT OF THE ABOVE LEGA L POSITION WHERE THE APEX COURT DEMANDS FOR EXPLANATION OF THE REVENUE FOR THE G AP THEREFORE THE PROCEEDINGS U/S 132(3) MUST BE MEANINGFUL AND FOR A P URPOSE. THE REVENUE HAS TO EXPLAIN THE REASONS FOR ISSUING THE SAID PROHIBITORY ORD ERS AND CONTINUATION OF THE SAME OVER THE PERIOD OF TIME. WHERE AS IN THE INSTANT CASE THERE IS NO EXPLANATION FROM THE REVENUE FOR ISSUANCE OF THE SAID ORDERS AND THE CONTINUATION THEREOF. HENCE WE DISMISS THE REVENUES LOGIC IN THIS REGARD. IN ANY CASE THE PANCHANAMA DATED 24 TH DECEMBER SPEAKS OF THE CONCLUSION OF THE SEARCH FINA LLY ON THE SAID DATE. 15. THEREFORE THE WARRANT OF AUTHORIZATION IS ALWAYS PE RSON SPECIFIC AS HELD BY THE CO-ORDINATE BENCH OF PUNE TRIBUNAL IN NUMBER OF C ASES AND SO IS THE SEARCH & ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 13 SEIZURE ACTION ON PERSON. DURING THE SEARCH OF A PERSON MANY NUMBER OF PREMISES OWNED OR NOT OWNED BY THE SAID PERSON ARE COVERED WITH THE AIM TO UNEARTH THE UNDISCLOSED INCOME OF SUCH PERSON. THEREFORE THE SEARC H ONCE INITIATED ON A PERSON WITH A WARRANT OF AUTHORIZATION ALL THE SPECIFIED PRE MISES ARE COVERED AND AT THE END THE SEARCH IS FINALLY CONCLUDED ON A SPECIFIED DATE AND TIME AS MENTIONED IN THE PANCHANAMA . ONCE THE SEARCH IS CONCLUDED FORMALLY AND FINALLY THERE CANNOT BE OTHER PANCHANAMA WITHOUT FRESH WARRANT OF AUTHORIZATION WHICH IS OF CO URSE ISSUE AFTER DUE RECORDING OF FRESH SATISFACTION OF THE COMPET ENT AUTHORITY AS PER THE PROVISIONS OF SECTION 132 OF THE ACT. ONCE THE SEARCH IS EFFECTIVELY CONCLUDED ON 8 TH DECEMBER ITSELF AND FORMALLY CONCLUDED ON 24.12.1998 IN VIEW OF THE PROHIBITORY ORDERS ISSUED UNDER SECTION 132(3) SEARCH ON THE ASSES SEE HAS COME TO THE END ON THE SAID DATES WHICH INCIDENTALLY FALLEN IN THE MO NTH OF DECEMBER 1998 ITSELF. IN ANY CASE NOTHING IS BROUGHT TO OUR NOTICE THAT THERE ARE VALID PROHIBITORY ORDERS IN FORCE AND THERE IS REASONABLE EXPLANATION FOR DELAY IN LIFTING THE SAID ORDERS AFTER 8 TH DECEMBER OR AFTER 24 TH DECEMBER. IN SUCH CIRCUMSTANCES IN OUR OPINION IN THE ABSENCE OF THE EXPLANATION OF THE ASSESSEE AS PER TH E RATIO IN THE CASE OF DEEPAK AGARWAL (SUPRA) THE SEARCH ON THE ASSESSEE IS FINALLY CONCLUDED ON 8.12.1998. THEREFORE THE DUE DATE FOR COMPLETION OF THE BLOCK AS SESSMENT IS 31.12.2000 AND NOT 31.01.2001. THEREFORE WE ARE OF CONSIDERED OPINION THE ORDER OF THE CIT(A) ON THIS ISSUE OF LIMITATION HAS TO BE REVERSED . CONSEQUENTLY THE BLOCK ASSESSMENT ORDER DATED 31.1.2001 BECOMES INVALID AND ILLEGAL AND IT HAS TO BE QUASHED. ACCORDINGLY THE GROUND 1 OF THE ASSESSEE RELATING TO LIMITATION IS ALLOWED IN FAVOUR OF THE ASSESSEE. 16. CONSEQUENT TO THE ABOVE DECISION OF OURS ON THE LIMITATION ISSUE WHICH IS IN FAVOUR OF THE ASSESSEE THE ADJUDICATION OF THE OTHE R GROUNDS RELATING TO THE MERITS OF THE ADDITIONS BECOMES ONLY AN ACADEMIC EXERCISE. THEREFORE CONSIDERING THE ABOVE DECISION OF QUASHING OF THE IMPUGNED BLOCK AS SESSMENT ON THE BASIS OF LIMITATION ALL THE OTHER GROUNDS AND ADDITIONAL GROUN DS RAISED BY THE ASSESSEE BEFORE US ARE DISMISSED AS INFRACTIOUS WITHOUT GOING I N TO THE MERITS OF THE GROUNDS. 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO 748/PN/2006 JETHMAL F. SONI BLOCK PERIOD 1988-89 TO 1998-99 PAGE OF 14 14 ORDER PRONOUNCED IN THE OPEN COURT ON DAY OF 10TH AUGUS T 2010. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER PUNE DATED THE 10TH AUGUST 2010 US COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT II PUNE 4. THE CIT(A)-II PUNE 4. THE D.R. A BENCH PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE