Ita 191/12 v. Ita 191/12

C.R. IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 07TH DAY OF JANUARY 2019 / 17TH POUSHA, 1940 ITA.No. 191 of 2012 AGAINST THE ORDER/JUDGMENT IN IT(SS)A 95/COCH/2005 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 3.4.2012 APPELLANT/S:/APPELLANT/ASSESSEE: SHRI.K.V.PADMANABHANKARANAYIL MADAM, ETTUMANA P.O, KARUVANNUR, THRICHUR.BY ADVS.SRI.ANIL D. NAIRSMT.NIVEDITA A.KAMATHSRI.J.R.PREM NAVAZ RESPONDENT/S:/RESPONDENT/REVENUE: THE ASST.COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE, TRICHUR BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH SC FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 07.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 'C.R.' K.VINOD CHANDRAN & ASHOK MENON, JJ. -------------------------------------------ITA No.191 of 2012------------------------------------------- Dated this the 7[th] day of January, 2019 J U D G M E N T Vinod Chandran, J The appeal raises a substantial question oflaw against the order of the Income Tax AppellateTribunal; whether the limitation period has expiredwhen the assessment order was passed under Section 158BC of the Income Tax Act, 1961 ('Act', for short).Shorn of the unnecessary details, the brief facts to benoticed are that on due authorization, the premises ofthe assessee was searched under Section 132 of the Acton 16.03.2000. At the time of search, a panchnama wasprepared seizing almost 3700 documents. A woodenalmirah, with documents therein, found in theresidential premises of the assessee was also issuedwith a restraint order under Section 132(3) of the Act.Later, there was a further search conducted of thedocuments and the articles kept in the almirah and seven documents were seized by a panchnama on thesearch conducted on 04.04.2000. The question urgedbefore this Court is on the setting in of limitation bythe time, the assessment order was passed on24.04.2002. The limitation commences from the last dayof the month in which the last panchnama was recorded.2.The contention of the assessee-appellantas argued before us by the learned Counsel, Sri.Anil DNair is that there was no authorisation for the officerwho had conducted the search and seizure on 04.04.2000.Immediately we have to notice that such a contentionwas never raised by the assessee before any of the factfinding authorities. The learned Senior Counsel,Government of India (Taxes), Sri Ravindranatha Menonwould specifically refer to the decision of the Hon'bleSupreme Court in 2016 (384) ITR 1 (SC) [VLS FinanceLtd., v. Commissioner of Income Tax]to contend thatthe validity of the authorisation having not beenchallenged in the course of search and assessmentproceedings ie: before the fact finding authorities,there could be no new challenge raised before thisCourt. Per contra, it is pointed out that though there ITA 191/12 is no ground raised on the question of theauthorisation being absent, there is a question of lawframed in the memorandum. 3.We have already stated the skeletalfacts, sufficient for the consideration of the questionraised on limitation. It need only be observed that ifthe last panchnama is found to be the one as recordedon 16.03.2000 then the limitation has to be calculatedfrom 31.03.2000 and expires on 31.03.2002. Theassessment order passed on 24.04.2002 then would bevitiated on grounds of limitation. However, if thepanchnama recorded on 04.04.2000 is found to be properand valid, then, the limitation would have to commencefrom 30.04.2000 and the order passed on 24.04.2002would be within the period of limitation. In thiscontext, the learned Counsel has placed before us anumber of decisions of various High Courts which willhave to be examined to understand the law as expoundedby the various courts. 4.Before that, it is only appropriate tofirst look at the decision of a Division Bench of thisCourt reported in 2006 (282) ITR 158 (Commissioner of -IncomeTax and another v. Dr. C. Balakrishnan Nair andanother). This judgment does not consider thelimitation aspect at all, but was against the noticeissued for block assessment. We notice the saiddecision only because the facts are almost identicaland the Division Bench had laid down the principles ofa search under Section 132; which are relevant here.Therein on a warrant of authorisation, issued oninformation received of undervaluation of a sale ofproperty on 27.10.1995, search was carried out at theresidences of the vendor and vendee. A panchnama wasprepared on the said date in the presence of witnessesand since the search was not completed, the books ofaccounts and records were put in an Almirah and sealedin the presence of witnesses. A prohibitory orderunder Section 132(3) was served on the assessees on thesame date. The search team visited the premises of theassessee on two subsequent days, when the operationscould not be resumed for reason of the absence of theassessees. Finally, the search was resumed andconcluded. The question was whether there was arequirement for a second authorization insofar as the search conducted after about 15 days. There were alsogrounds of mala fides alleged against the authorisedofficer who had conducted the search and it was alsoasserted that the officer had taken away documentswhich were not recorded as seized in the panchnama. Weneed not go into the factual adjudication on theallegation of mala fides raised which were negatived bythe Division Bench. The learned Single Judge had foundthat the subsequent search carried out without aseparate authorisation was not proper. The DivisionBench set aside that finding and held that there couldbe a subsequent search carried out, insofar as thedocuments which were restrained under Section 132(3)without a further authorisation. We extract paragraph20 of the aforesaid judgment which spoke on theprocedure under Section 132 of the Act with specificreference to the facts of a second search within aperiod of two weeks. “Section 132 of the Income-tax Act empowerssearch and seizure to be carried out by thedepartmental officers and to take awaywhatever valuable documents, records, etc.,during the period of search which are foundto be necessary. Search may be sudden andunexpected. Search team would not be able “Section 132 of the Income-tax Act empowerssearch and seizure to be carried out by thedepartmental officers and to take awaywhatever valuable documents, records, etc.,during the period of search which are foundto be necessary. Search may be sudden andunexpected. Search team would not be able to unearth all documents at a time at onestroke. Party may at times keep theincriminating documents beyond the search ofthe search team, if he suspects a search.During the search, search team will have todetect and collect all the records which arenecessary to achieve the objective.Relevancy or otherwise of the materials isto be determined by the search team.Documents which are necessary or relevantwould normally be seized. The search teamwill have to separate the wheat from thechaff and would seize only documents whichare relevant. It may not be practicable toseize all the documents in a day or two,because they are in an unfamiliar territory,while the assessee would be familiar witheach and every items and materials kept inthe place of search. Attitude of some ofthe assessees may be helpful, of others maynot. In this connection reference may bemade to the decisions of the apex court inPooran Mal v. Director of Inspection(Investigation)[(1974) 93 ITR 505] andITOv. Seth Brothers [((1969) 74 ITR 836]. Thepetitioners have raised a contention thatsearch was prolonged unreasonably and thereasons stated are not convincing. Searchcommenced on October 27, 1995, and continuedon November 10, 1995, and there is a delayof fourteen days for which the Departmenthave given acceptable explanation. In theabsence of any time limit prescribed in theCode of Criminal Procedure or the Income-taxAct, we are not prepared to say that thedelay, in conducting the search has vitiatedthe search and seizure” This broadly outlines the fundamental scope andelementary content of a search operation under Section132 of the Act. ITA 191/12 5. In the present case also, we find theaforesaid declaration squarely applicable. We noticethat there was a search carried out on 16.03.2000 and apanchnama prepared, a copy of which was handed over tous by the learned Counsel for the assessee, across theBar, which was stated to be part of the paper bookproduced before the Tribunal. We also see that on16.03.2000 one wooden almirah containing some documentsand other records were issued with a restraint orderunder Section 132(3). As admitted by the learnedCounsel for the assessee there were almost 3700documents seized on the said date as evidenced from thepanchnama. Hence we are of the opinion that it was notpractical to look into the entire books of accounts anddocuments found in the premises, the balance of whichby the restraint order, on the first day of search waskept in an almirah and sealed under Section 132(3).This does not amount to a seizure as provided underSection 132. Only if the records are kept in thecustody of the assessee on the grounds found in thesecond proviso to Section 132(1), could there be adeemed seizure though not particularly seized on the ITA 191/12 day of search. 6.Now the question arises as to which of the two is the last panchnama as spoken of in Section158BE(1)(b) of the Act. Section 158 BE(1)b) andExplanation 2(a) are relevant and are extracted hereunder: “Section 158BE: Time limit for completion ofblock assessment (1)(b):Within two years from the end of themonth in which the last of the authorisationsfor search under section 132 or for requisitionunder section 132A, as the case may be, wasexecuted in cases where a search is initiatedor books of account or other documents or anyassets are requisitioned on or after the 1[st]day of January, 1997. ITA 191/12 day of search. 6.Now the question arises as to which of the two is the last panchnama as spoken of in Section158BE(1)(b) of the Act. Section 158 BE(1)b) andExplanation 2(a) are relevant and are extracted hereunder: “Section 158BE: Time limit for completion ofblock assessment (1)(b):Within two years from the end of themonth in which the last of the authorisationsfor search under section 132 or for requisitionunder section 132A, as the case may be, wasexecuted in cases where a search is initiatedor books of account or other documents or anyassets are requisitioned on or after the 1[st]day of January, 1997. Explanation 2(a):In the case of search, on theconclusion of search as recorded in the lastpanchnama drawn in relation to any person inwhose case the warrant of authorisation hasbeen issued.” 7.There are a number of decisions of various High Courts placed before us by the learnedCounsel for the assessee, which we have to look into.But at the outset, we also have to notice that the saiddecisions invariably noticed the decision of a learnedSingle Judge of this Court and placed reliance on thesame, which has been reversed by a Division Bench, asnoticed herein before in Dr. C. Balakrishnan Nair. ITA 191/12 8.Commissioner of Income Tax v. Mrs. Sandhya P. Naik [2002 (253) ITR 534(Bom)], consideredSection 158BE(1)(a) which provided a limitation periodof one year and otherwise was in pari materia. Thesearch conducted in the residential premises of theassessee continued for some days and concluded on16.10.1996. The assessment had to be completed on orbefore 31.10.1997; while it was actually completed onlyon 31.12.1997. The Department contended that there wasa restraint order issued under Section 132(3) withrespect to the articles kept in a cupboard and therewas a panchnama prepared on 13.12.1997; hence thelimitation of one year commenced only from 31.12.1997.The Division Bench found that the panchnama prepared on13.12.1997 was by an officer not authorised underSection 132 and that there was no seizure as sucheffected. After the search, the prohibitory orderpassed under Section 132(3) was withdrawn by theauthorised officer, on a request made by the assesseeas to the articles contained in the cupboard being of areligious nature and required for the purposes of apooja. The Assistant Director of Income Tax, the authorised officer, released the cupboard on 26.10.1996which order was implemented on 13.12.1997 by theAssistant Commissioner of Income-Tax, who admittedlywas not an authorised officer. There was also noseizure carried out under Section 132 and the panchnamawas only insofar as release of the silver vessels andarticles. These are not comparable facts, which haveany connection to the facts of this case. 9.A Division Bench considered another instance of search in (2007) 294 ITR 444 (Delhi)[Commissioner of Income Tax v. Sarb Consulate MarineProducts P. Limited.]. The assessee who was engaged infishing on the high seas was subjected to a searchunder Section 132 on 06.11.1996, when some documentswere seized and a restraint order issued under Section132(3) against some fishing vessels/trawlers. Therestraint order was extended twice and on 16.12.1997there was a notice issued under Section 158BC. Thereturn was filed by the assessee within time and latera further search was conducted in the fishingvessels/trawlers on 14.09.1998; but without any seizurehaving been effected. All the same a panchnama was 9.A Division Bench considered another instance of search in (2007) 294 ITR 444 (Delhi)[Commissioner of Income Tax v. Sarb Consulate MarineProducts P. Limited.]. The assessee who was engaged infishing on the high seas was subjected to a searchunder Section 132 on 06.11.1996, when some documentswere seized and a restraint order issued under Section132(3) against some fishing vessels/trawlers. Therestraint order was extended twice and on 16.12.1997there was a notice issued under Section 158BC. Thereturn was filed by the assessee within time and latera further search was conducted in the fishingvessels/trawlers on 14.09.1998; but without any seizurehaving been effected. All the same a panchnama was drawn up. The contention of limitation as raised bythe assessee was met on the ground that the lastpanchnama as provided for under the Explanation 2 toSection 158BE is that prepared on 14.09.1998. TheDivision Bench found that after the first search andseizure on 06.11.1996, there was absolutely noproceedings taken and the search was merely stated tohave been completed on 14.09.1998, in a letter of theAssistant Director of Income Tax (Investigation). TheCourt found that the same was a dummy search initiatedas a mere formality so as to extend the period oflimitation. Proceedings were held to be barred bylimitation finding the last panchnama drawn to be, on06.11.1996 and not on 14.09.1998 when a dummy searchwas carried out for the purpose of extending the periodof limitation. 10.(2009) 221 CTR 385 (Kar) [Commissioner ofIncome Tax v. T.S.Chandrashekar]again considered theissue of limitation on the basis of the searchconducted. Therein, two authorisations were issued onthe same day; one in the morning and the other in theevening at 3.45 p.m.: the former for the search of the business premises and the latter for the search ofresidential premises. The Court clearly found that thesecond authorisation has to be considered as theauthorisation later issued. However, on the questionof panchnama, it was found that on 12.12.1995, therewas seizure of certain documents from the businesspremises and on 13.12.1995, there was seizure of cashmade from the residential premises. Though there weresubsequent searches carried out on 19.01.1996, and 7[th]& 12[th] of February, 1996, those did not lead to anyseizure and the drawing of panchnama was only forcarrying out an inventory of the jewellery. In thiscontext, it was found that the document evidencingseizure of cash from the residence of the assessee wasthe last panchnama for the purpose of computation oflimitation. The subsequent searches carried out in thenext year, could not lead to extension of thelimitation period was the finding. 11.(2009) 308 ITR 168 (Delhi) [Commissionerof Income Tax v. S.K.Katyal] also considered thequestion of limitation under Section 158BE. The searchunder Section 132 commenced on 17.11.2000 at 8 a.m. and continued till 7 p.m., when it was temporarilyconcluded for the day, which was to be commencedsubsequently, for which purpose seals were placed inthe cash box kept in an almirah. A panchnama wasprepared on the conclusion of the proceedings, whereinthere were certain seizures made. However, there wasno search conducted thereafter. On 03.01.2001, theIncome Tax Officer inspected the premises and revokedthe restraint order under Section 132(3). The keys ofthe almirah and the safe were returned to the assesseefor which a panchnama was drawn up. The Departmentclaimed limitation from the date of that particularpanchnama; which was found to be unsustainable on thebasis of the afore cited decisions. 12.All the cited decisions found the continued till 7 p.m., when it was temporarilyconcluded for the day, which was to be commencedsubsequently, for which purpose seals were placed inthe cash box kept in an almirah. A panchnama wasprepared on the conclusion of the proceedings, whereinthere were certain seizures made. However, there wasno search conducted thereafter. On 03.01.2001, theIncome Tax Officer inspected the premises and revokedthe restraint order under Section 132(3). The keys ofthe almirah and the safe were returned to the assesseefor which a panchnama was drawn up. The Departmentclaimed limitation from the date of that particularpanchnama; which was found to be unsustainable on thebasis of the afore cited decisions. 12.All the cited decisions found the respective assessments to be hit by limitation, forreason of the panchnama ordering release of goods ordocuments, restrained under Section 132, not being thelast panchnama for reason of there being no seizure assuch effected. We are of the opinion that none of thesedecisions apply to the facts of the present case,since, here, the facts are quite distinct insofar as the second panchnama prepared on 04.04.2000specifically effected seizure of seven documents, fromthe documents and articles that were kept sealed in thealmirah against which a restraint order was issuedunder Section 132(3). The intention of the legislaturein providing for a limitation period is to ensurecertainty and finality to legal proceedings and avoidunnecessary delay exposing the assessee to proceedingsfor indefinite periods; but also enabling theDepartment to look into the incriminating materialsseized on search. The delay should not prejudice theassesssee but the Department should also be givenadequate time to settle and conclude the proceedingswithout prejudice to the revenue. The legislaturehence devised a measure by which the period forcompletion statutorily commences from the last date inwhich such incriminating materials are seized; whichhas to be evidenced by a panchnama. Reliance cannotbe, to panchnamas prepared for release of goods orresort to some other device of a dummy search beingcarried out, merely for the purpose of extending theperiod of limitation. 13.We, then, come to the decision of theMadras High Court, wherein decisions of the High Courtsof Delhi and Karnataka were relied on. The Madras HighCourt in A.Rakesh Kumar Jain v. Joint Commissioner ofIncome Tax[Tax Case (Appeal) No.1240/2006] consideredthe aspect of limitation under Section 158BE. A searchwas commenced in the assessee’s premises on 12.12.2001and the proceedings were closed on 13.12.2001. Apanchnama evidencing seizure of materials was alsodrawn up on that date. On 08.02.2002 and on 15.02.2002further panchnamas were drawn up evidencing issuance ofprohibitory order but there was no furtherauthorisation issued for that search. The Revenuecontended that the assessment made under Section 158BCon 27.02.2004 was within the limitation period ascalculated from the last panchnama prepared in February2002. The assessee challenged the order on the groundthat the subsequent search conducted in February 2002was not pursuant to any authorisation issued. Therewas also no prohibitory order issued on 13.12.2001 whenthe authorised search concluded. 14.The High Court of Madras held that when asearch is conducted and the search party leaves afterdrawing up a panchnama, the search is completed and theauthorisation is implemented and executed. A furthersearch would require a fresh authorisation. However ifthere is a restraint order against any materials ordocuments, then the search could be continued evenwithout a fresh authorisation but the search andseizure shall be confined to the materials or documentswhich are subjected to the restraint order. If aseizure is made from those documents or materialssubjected to restraint order on the second search, thenthere shall be a panchnama drawn up, which would be thelast panchnama drawn up for the premises. It was alsoheld that the materials so seized on the basis of thatlast panchnama could be used for computing theundisclosed income. We perfectly agree with the HighCourt of Madras on these aspects. However, theDivision Bench went on to hold that for purposes oflimitation, the last panchanama would be that drawn upon the day when the search was completed at the firstinstance. Hence, the panchnama drawn up later for seizure of the materials against which a restraintorder was passed would have no bearing, in computationof limitation. We, with respect, express our dissent tothat proposition based on an artificial distinctioncreated between a panchnama on completion of search andof the premises, which is not statutorily recognised.Reliance, for that proposition, was placed on (2011)339 ITR 210 (Kar) [C.Ramaiah Reddy v. AssistantCommissioner of Income Tax (IMV)].(2010) 328 ITR 320(Delhi) [Commissioner of Income Tax v. Anil Minda]isalso seen relied on. 15.In Anil Minda, there was an authorisationissued to search the premises of the assessee on13.03.2001. The search was commenced on 19.03.2001 andcontinued on 20[th], 26[th], 27[th] and 28[th] of that month. On26.03.2001, it was noticed that there was a lockermaintained by the assessee in a Bank for which a secondauthsorisation was issued on 26.03.2001. The locker wassearched and that second authorisation executed on26.03.2001 itself. However, on the first authorisation,search was continued on 27[th] and 28[th] of March and thenon 11[th] of April, 2001. The Department contended that since the search with respect to the firstauthorisation concluded on 11.04.2001, limitation hasto be computed from 30.04.2001. The assessee arguedthat under Section 158BE, the limitation starts fromthe end of the month in which the last of theauthorisation for search under Section 132 wasexecuted, since the search made on the secondauthorisation concluded on 26.03.2001. The contentionwas that the limitation commenced from the execution ofthe last of the authorisations and hence, here itcommenced when the authorisation to search the banklocker was executed. The Division Bench however gaveshort shrift to the said contention finding that theExplanation, then would be rendered otiose. There beingonly one authorisation issued herein, this decision isnot at all relevant for this case. 16.The Karnataka High Court in C.RamaiahReddy was concerned with facts identical to those insome of the cited decisions. Search was carried out on05.12.1995 and a panchnama was drawn up on conclusionof search for the day and prohibitory order issuedagainst certain jewellery and books of accounts. On 16.The Karnataka High Court in C.RamaiahReddy was concerned with facts identical to those insome of the cited decisions. Search was carried out on05.12.1995 and a panchnama was drawn up on conclusionof search for the day and prohibitory order issuedagainst certain jewellery and books of accounts. On 24.01.1996, the prohibitory order was lifted and theitems restrained, released by a panchnama. Theassessment order was passed on 28.01.1996, relying onthe second panchnama. We have no doubt that the factsclearly make out limitation having set in. However,the Division Bench found a distinction on the basis ofthe expressions used in the Explanation and Section132(1)(a) and (b). The words “last panchnama” used inthe Explanation as distinguished from the words “lastof the authorisations” used in the body of the sectionhas a definite connotation insofar as the legislaturenot contemplating more than one panchnama with respectto a particular search; was the finding. The reasoningseems to be that with respect to a particularauthorisation, there could be only one panchnama drawnup, and if at all, a panchnama is drawn up on the basisof a seizure made in pursuance to a restraint order,the limitation cannot stand extended by reason of thesecond panchnama. The Division Bench observed; to holdotherwise, the Explanation ought to have used the words“last of the panchnamas”. It was also observed that ifa restraint order was held to be a permission to carry out any number of searches then, the authorised officercould use it as a 'season ticket' to carry outintermittent searches at his whims and fancies. Withall the respect at our command, we are unable to agreewith the said proposition as propounded by the DivisionBench of the Karnataka High Court. 17.We notice from the above extractedprovision that the limitation commences on theexecution of the last of the authorisations in theevent of a search initiated or for requisition made ofbooks of accounts, other documents or any assets. TheExplanation further clarifies that in cases of searchthe authorisation is deemed to have been executed onthe conclusion of the search as recorded in the lastpanchnama drawn in relation to any person in whose casethe warrant of authorisation has been issued. As forrequisition, the Explanation clarifies that it shall beon the actual receipt of the books of accounts, otherdocuments or assets. The thrust is on the seizure ofincriminating materials and the requirement to enablethe Department to look into such materials andadjudicate upon it, for which a reasonable period of two years is provided from the last day of the month,in which the authorisation is executed; evidenced bythe drawing up of a panchnama of seizure of materialsor documents. Even if the search operations continuefor a number of days or are conducted on days notcontinuous or consequent, that would not be relevant inso far as computing limitation which has to be from thelast date on which incriminating material was recoveredand seized, which seizure is also evidenced by apanchnama. 18.At the risk of repetition, it has to bereiterated that once on the basis of an authorisation asearch is initiated, then it has to be continuousunless there is a restraint order issued against anydocuments or materials. This is also logical sinceonce the search party leaves the premises, no one wouldleave any incriminating material in the premises forfurther seizure. Once the search party leaves thesubject premises, for a further search there should bea fresh authorisation. However, if a restraint orderis issued against any material and the same allowed tobe kept in the premises itself, then within sixty days 18.At the risk of repetition, it has to bereiterated that once on the basis of an authorisation asearch is initiated, then it has to be continuousunless there is a restraint order issued against anydocuments or materials. This is also logical sinceonce the search party leaves the premises, no one wouldleave any incriminating material in the premises forfurther seizure. Once the search party leaves thesubject premises, for a further search there should bea fresh authorisation. However, if a restraint orderis issued against any material and the same allowed tobe kept in the premises itself, then within sixty days a further search could be carried out on the very sameauthorisation but; confined to the materials againstwhich a restraint order is issued under Section 132(3). Here, we pause to briefly dilate upon what isseizure under Section 132. Seizure is as providedunder clause (iii) or second proviso to Section 132(1).The Explanation to sub section (3) specificallyexcludes a restraint order from the definition of aseizure under clause (iii) of Section 132(1). Comingback to the search, the panchnama drawn up last, wouldbe that drawn up seizing incriminating materials; aseizure as provided in Section 132. Whether it be onthe first authorisation or the last under a series ofsuch authorisations is not relevant for our case, whichhas only one authorisation. 19.In the present case, the proceedingscommenced on 16.03.2000. As we noticed, there were anumber of documents seized on that day which definitelywould have taken up the entire day on which the searchwas conducted. The seizure has to be made on a cursoryverification and a prima facie satisfaction beingentered into of the need to seize the same. A panchanama was drawn up and the other documents whichthe authorised officer wished to examine were placed inan almirah and the same issued with a restraint orderunder Section 132(3). We agree with the decision ofthe Madras High Court in A.Rakesh Kumar Jain that for asecond search to be conducted, there need to be asecond authorisation obtained since the searchconcluded on that day. We also agree with the DivisionBench decision of the Karnataka High Court in C.RamaiahReddy insofar as there being no requirement for asecond authorisation, if the search is confined to thematerials against which a restraint order has beenissued under Section 132(3). But, we are unable toagree with the finding in C.Ramaiah Reddythat aseizure made of the documents which have been issuedwith a restraint order under Section 132(3) cannot besaid to be the last panchnama. 20.There could be many cases when search isnot concluded on the very day in which it is commenced.There could also be seizure made of incriminatingdocuments as revealed on a continuous search onconsecutive days on the same authorisation or on a subsequent search on a further authorisation or aseizure effected from the material or documents whichwere issued with a restraint order. In all such cases,the last panchnama drawn up of an effective seizuremade under Section 132, not being covered by the secondproviso, would be the starting point of the period oflimitation. It is in the circumstance of the searchand seizure being not concluded in a particular day,that there is a provision under sub-Section (3) ofSection 132 to make a restraint order, so as tocontinue the proceedings on the very same authorisationissued. subsequent search on a further authorisation or aseizure effected from the material or documents whichwere issued with a restraint order. In all such cases,the last panchnama drawn up of an effective seizuremade under Section 132, not being covered by the secondproviso, would be the starting point of the period oflimitation. It is in the circumstance of the searchand seizure being not concluded in a particular day,that there is a provision under sub-Section (3) ofSection 132 to make a restraint order, so as tocontinue the proceedings on the very same authorisationissued. 21.We again notice the Division Benchdecision of this Court in Balakrishnan Nair (C) (Dr.)and the extracted paragraph to fortify our findings.When search is continued on the subsequent days andthere is requirement of seizure, the panchnama lastrecorded would be the starting point of limitation.Again looking at the specific words employed in clause(a) of Explanation 2, it has to be reiterated that thelast panchnama is that drawn up on the conclusion ofthe search, in relation to any person in whose case the warrant of authorisation has been issued. The personreferred to therein is not the authorised officer andis the assessee against whom the authorisation forsearch is issued. The warrant of authorisationcontemplates a search being continued over a period oftime and seizure effected by drawing up panchnamas;more than one. In the decisions of the various HighCourts, we referred to at the first instance, wenoticed that the later panchnamas though drawn up didnot result in any seizure of documents or materials andonly effected release of those materials against whicha restraint order was issued under Section 132(3).What distinguishes the present case is the fact thatthere was a seizure effected of the documents whichwere issued with a restraint order. 22.The learned counsel for the assessee then would contend that there were only seven documentsseized on the second day of search, that is on04.04.2000. The contention of the assessee before theappellate authority was also that the second search wasconducted only to extend the period of limitation. Wesee that the Tribunal has rightly found that at the time when the search was proceeded with, it would nothave been in the contemplation of the authorisedofficer that an assessment order would be issued onlyafter the period of limitation. It cannot also beassumed that the authorised officer had at the time ofsearch itself decided to issue an order after thelimitation as provided under Section 158BE. Here isnot a case where there was unexplained delay incarrying out the further seizure of the documentsagainst which a restraint order is issued. In theabove circumstances, we answer the question onlimitation, on the facts in this case, against theassessee and in favour of the Revenue. 23.The next question as framed in the memorandum is as follows: “In the facts and circumstances of thecase, ought not the Tribunal have foundthe second search conducted on 4.4.2000,under the warrant of authorization dated8.3.2000, done by a different party was badin law?” Immediately we notice that this is not to say that thesecond search was not by an authorised officer andinbuilt is the admission that it was by one authorised, 23.The next question as framed in the memorandum is as follows: “In the facts and circumstances of thecase, ought not the Tribunal have foundthe second search conducted on 4.4.2000,under the warrant of authorization dated8.3.2000, done by a different party was badin law?” Immediately we notice that this is not to say that thesecond search was not by an authorised officer andinbuilt is the admission that it was by one authorised, but a different Officer. The learned counsel for theassessee would take us to Form No.45, the warrant ofauthorisation under Section 132 which speaks ofauthorisation of specific officers, which document isnot communicated to the assessee. Pertinent is thefact that one single authorisation could specify morethan one officer. It is also pointed out that Rule112(7) of the Income Tax Rules specifically speaks ofthe list of all things seized in the course of search(panchanama) to be prepared by the authorised officerand signed by such witnesses. It is the contentionthat there is no authorisation issued in favour of theofficer who conducted the second search and seizure. 24.As pointed out by the Revenue, there isabsolutely no ground taken before any of the factfinding authorities on this particular aspect. If itwas taken, definitely the same could have beenexamined. Though the learned Counsel prayed for aremand, we are not persuaded for the following reasons.Though not formally communicated, it cannot be assumedthat the assessee was not aware of the order ofauthorisation, which definitely, he would have been confronted with at the time of search. The Form aspointed out by the learned Counsel also speaks ofauthorisation of more than one officer. We notice fromAnnexure-B, the order of the first appellate authority,that the appellant’s case was that the search andseizure were conducted on two days by two differentauthorised persons. Hence, at the first appellatestage, the specific contention was that both theofficers though authorised had independently conductedthe search on the two separate days. This contentioncannot vitiate the search and seizure and was notaccepted by the first appellate authority or theTribunal. Here too, the contention is reiterated,which we find to be a mere after thought to delay thefinalisation by realisation of the demand. We, hence,answer that question raised also against the assesseeand in favour of the Revenue and decline aconsideration on facts as to whether the officer, whocarried out the search and seized the seven documents,did so under a valid authorisation under Section 132for reason of the assessee having not raised it at allbefore the fact finding authorities or even before this Court. The contention, infact, was quite the opposite;which results in an admission that there was dueauthorisation. We, hence, reject the Income Tax Appealwithout any order as to costs. Sd/-K.VINOD CHANDRANJUDGE Sd/-ASHOK MENONJUDGE ITA 191/12 APPENDIX APPELLANT'S/S EXHIBITS: ANNEXURE-ATRUE COPY OF THE ORDER OF ASSESSMENT FOR THE BLOCK PERIOD 1/4/1989 TO 15/3/2000 ISSUED TO THE APPELLANT. ANNEXURE-BTRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) DATED 7/2/2005. ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. jg [True Copy]