Date of last panchanama is the starting point of limitation for completion of block assessments: SC
Facts:
- The two warrants of authorization for search under Section 132 at the bank locker with Canara Bank, Kamla Nagar, were issued on March 13 and March 26, 2001.
- During the execution of the search warrants dated March 13, 2001, the Income Tax authorities got information about a locker belonging to the appellant or assessee in a bank. As a result, on March 26, 2001, a second authorization for searching the locker was issued, and it was carried out on March 26, 2001.
- The first authorization came on March 13, 2001, for a search at the office and residence of the assessee, and it continued for some time and culminated only on April 11, 2001. The second search authorization, dated March 26, 2001, came to be executed on the same date, and the Punchnama was drawn on March 26, 2001.
- The assessee contended that the limitation of two years as prescribed under section 158BE was to be computed when Panchnama in respect of the second authorization was executed, i.e. on 26.03.2001. Since the Punchnama was drawn on March 26, 2001, the two-year period prescribed under Section 158BE(b) expired in March 2003, and the assessment order was issued in April 2003, which the assessee claimed was time barred.
- The department contended that since the last Punchnama through related to search authorization dated 13.03.2001 was executed on 11.04.2001, a limitation of two years was to be computed from that date, and therefore the assessment that was passed was well within the prescribed limitation.
Hon SC held as below:
- In a given case where number of authorizations are issued and relevant material/s is/are collected during the search on different dates on the basis of the different authorizations, ultimately the assessment proceedings would be on the basis of the entire material collected during the search and on the basis of the Panchnama drawn.
- It cannot be disputed that the block assessment proceedings are initiated on the basis of the entire material collected during the search/s and on the basis of the respective Panchnama/s drawn. Therefore, the date of the Panchnama last drawn can be said to be the relevant date and can be said to be the starting point of limitation of two years for completing the block assessment proceedings.