Commissioner Of Income Tax vs Kuwer Industries Ltd.
2004 Latest Caselaw 824 Del

JUDGMENT

1. These appeals are preferred by the Revenue against the order made by the Tribunal, Delhi Bench, in IT(SS) No. 141/Del/1997, on 20th June, 2001, for the block assessment period 1st April, 1985 to 30th June, 1996. The question in this matter raised by the learned counsel for the Revenue is about limitation. As per Section 158BE of the IT Act, 1961 (hereinafter referred to as the Act), the assessment is required to be made within a stipulated time and if it is not made, then the same would be time-barred.

2. As the Court is required to examine Sub-section (1) of Section 158BE of the Act, the relevant provision is incorporated hereunder :

"158BE(1). The order under Section 168BC shall be passed--

(a) within one year from the end of the month in which the last of the authorisations for search under Section 132 or for requisition under Section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997 :

2. xxxxx

Explanation 2 : For the removal of doubts, it is hereby declared that the authorisation referred to in Sub-section (1) shall be deemed to have been executed,--

(a) in the case of search, on the conclusion of search as recorded in the last Panchnama drawn in relation to any person in whose, case the warrant of authorisation has been issued;"

3. The Tribunal in para 7 pointed out that the search was concluded on 20th March, 1996, and said that "if there is no authorisation with the approval of the concerned authority, then in that case the assessment has to be passed on or before 31st March, 1997." Before the Tribunal the assessed contended that there is no authorisation after the date of search and, therefore, the assessment passed on 30th June, 1997, is barred by limitation. The Tribunal specifically observed as under :

"The learned Departmental Representative has stated that a restraint order was passed on 27th June, 1996, which is equal to the authorisation. In our considered view, this letter dt. 27th June, 1996, cannot be equated with the authorisation, because authorisation has to be passed after obtaining necessary approval of Director of IT, Investigation or the CIT, whatever the case may be."

The Tribunal further observed as under :

"...the Panchnama in the case of assessed, M/s Kuwer Industries Ltd. was prepared separately i.e., on 20th March, 1996, and signed on 21st March, 1996. A copy of the same is placed in the papers filed by the learned Departmental Representative."

Thus, the case rested on the Panchnama which was dt. 20th March, 1996, and executed completely on 21st March, 1996. This Panchnama (copy) is placed before us. It is specifically mentioned at p. 4 of the Panchnama as under ;

"The search commenced on 20th March, 1996, at 8.45 A.M. The proceedings were closed on 21st March, 1996, at 10.15 A.M."

Thus, it is clear that the authorisation was executed on 21st March, 1996. However, learned counsel for the Revenue submitted that the Tribunal has ignored another Panchnama made subsequently. On behalf of the assessed it was pointed out that the said Panchnama was not produced before the Tribunal and there is no reference to this Panchnama in the order of the AO. Therefore, neither the AO nor the Tribunal has considered this later Panchnama. It is true that if the Panchnama was considered by the AO and made a basis for passing an order then matter would have been quite different. But in reality this document cannot be relied upon as the same was neither considered by the AO nor by the Tribunal, the Tribunal being final fact-finding authority. As we indicated that the subsequent Panchnama was not a part of the record, we cannot rely upon. It is interesting to note that even before the AO there is only a reference of one Panchnama only dt. 20th March, 1996, which shows that search was concluded on 21st March, 1996. Counsel for the Revenue stated that if the subsequent Panchnama is not placed on the record then it cannot be said that the Tribunal has committed an error but his contention is that the record should have been placed not only by the appellant but should have been pointed out to the Tribunal by the Departmental Representative also.

4. We gave our anxious thought and we find that when the AO has not considered the same, the appellant may not think it proper to rely on the document as that was not considered by the AO himself against him. But, certainly it was the duty of the Departmental Representative to point out to the Tribunal that this document is required to be taken into consideration, and if considered then proceedings would not be barred by limitation and it would be within time. Well the AO has not bothered about this document may be because it has not been produced by the raiding party. Therefore, at this juncture we are not in a position to say anything about the responsibility of the person concerned for not producing the same.

5. Considering the facts and circumstances of this case we direct the CIT to examine the matter administratively and if Panchnama dt. 25th Feb., 1997, was not placed before the AO or before the Tribunal, the CIT shall examine the matter in greater detail and it is hoped that he shall take immediate action in the matter and shall file a report about the action taken within a period of three months from today. This appeal is disposed of. However, the same shall be listed after three months for considering the report.

6. List on 25th Jan., 2005.

7. In view of what is stated hereinabove, ITA 134/2004 as well as ITA 13/2002 do not raise any substantial question of law and are dismissed.