THE COMMISSIONER OF INCOME TAX Vs. DEEPAK AGGARWAL

JUDGEMENT

(1.) THESE appeals have been filed by the revenue against the common order passed by the Income Tax Appellate Tribunal on 30.11.2007 in IT (SS) A. No. 1/Del/2004 (in respect of the assessee - Deepak Aggarwal) and IT (SS) A. No. 204/Del/2004 (in respect of assessee - Mangla Marbles & Granite Pvt. Ltd). Sh. Deepak Aggarwal is one of the directors in Mangla Marbles & Granite Pvt. Ltd.

(2.) THE common issue that arises for consideration in these appeals is with regard to the provisions of Section 158BE, Explanation 2 read with Section 158BE(1)(b). A search under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as the 'said Act') was conducted as per warrant dated 31.10.2000. In view of the provisions of Section 158BE(1)(b), the block assessment under Section 158BC ought to have been completed on or before 31.10.2002. However, it was completed on 27.12.2002. The assessee's stand was that this was beyond the time prescribed under Section 158BE(1) and, therefore, the assessment was bad. The stand of the Department, on the other hand, was that there was another panchnama, which had been drawn on 23.12.2000 and that this was the last panchnama and, therefore, the two -year period has to be reckoned from the end of the month in which this panchnama was drawn and executed. In other words, the period of limitation would begin to run from 31.10.2000 and, consequently, time was available for completion of the assessment up to 31.12.2002. Since the assessment was completed on 27.12.2002, according to the Department, the assessment was in time. It is also relevant to note that on 31.10.2000 a prohibitory order under Section 132(3) of the said Act had also been passed in respect of the inventory of stock as per Annexure -S to the original panchnama dated 31.10.2000. It is also pertinent to note that this prohibitory order continued till it was revoked on 23.12.2000. The revocation order makes interesting reading and the same is as under:

(3.) THE decision of this Court in Sarb Consulate (supra) is applicable to the facts of the present case. In that case a similar situation had arisen and the question before the Court was whether the panchnama drawn on 06.11.1996 was the last panchnama or whether it was the panchnama drawn on 14.09.1998 which was the last for the purpose of reckoning the commencement of the limitation period. The Court examined various decisions including Dr. C. Balakrishnan Nair v. : [1999]237ITR70(Ker) and CIT v. : [2002]253ITR534(Bom) and concluded as under: