Mehul Metha v. Deputy Commissioner Of Income Tax Central Circle I (3) Chennai - 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on : 30.10.2018 Pronounced on : 31.12.2019 CORAM: THE HON'BLE MR. JUSTICE R.SURESH KUMAR W.P.No.20999 of 2003 and W.P.M.P.No.26089 of 2003 1. Dr.Bharat Mehta (Deceased) 2. Mehul Metha ........ Petitioner -vs- 1. Deputy Commissioner of Income Tax Central Circle I (3) Chennai - 600 034. 2. Deputy Commissioner of Income Tax Central Circle I (5) Chennai - 600 034. Central Circle I (5) Chennai - 600 034. 3. Deputy Director of Income Tax Unit I (2) Chennai - 600 034. Unit I (2) Chennai - 600 034. 4. Additional Commissioner of Income Tax Central Range I Chennai - 600 034. ........ Respondents (P2 substituted as LRs of deceased P1Dr.Bharat Mehta, as per order, dated12.09.2017 by TSSJ in W.M.P.No.21611 of 2017 in W.P.No.20999 of 2003 Writ petition filed under Article 226 of Constitution ofIndia praying for issuance of a Writ of Certiorari calling forthe records in No.PA/GI No.AADPH7768C, dated 30th June 2003 ofthe 1[st] Respondent and quash the same. For Petitioner : Mr.M.P.Senthil Kumar For Respondents : Mr.A.P.Srinivas This writ petition has been filed seeking for a writ ofcertiorari to call for the records in No.PA/GI No.AADPH7768C,dated 30.06.2003 and quash the same. 2. The necessary facts which are required to be noticed forthe disposal of this writ petition are as follows : (i) The petitioner (Dr.Bharat Mehta), who died during thependency of the writ petition, in whose place his legalrepresentative, one Mehul Mehta has been substituted as P2,hence the term petitioner denotes only the original petitioner,i.e., P1-Dr.Bharat Mehta (for the sake of convenience),who was amedical practitioner and also he was doing some business alongwith some of his family members. The petitioner was the incometax assessee from 1978-79 onwards. He was residing at No.4/181,Kodambakkam High Road, Chennai - 34 and he was having a clinicat No.87, N.S.C.Bose Road, Chennai along with his fatherDr.M.J.Mehta. (ii) The said residential premises, i.e., No.4/181,Kodambakkam High Road, Chennai - 34 seems to be the joint familyproperty, where some family business also is being undertaken bythe family members including the petitioner and his brother oneHemant Mehta. (iii) While so, in the year 2001, i.e., in January 2001, on25.01.2001, the premises of the petitioner was searched for theblock period from 01.04.1990 to 31.03.2000 and 01.04.2000 to24.01.2001 under the warrant / authorisation issued in thisregard, by the team of respondents / Revenue and on 25.01.2001,a panchanama were recorded, where according to the petitioner,the search was concluded on 25.01.2001, however, on that day,under Section 132(3) of the Income Tax Act 1961 (herein afterreferred to as "the Act"), a prohibitory order was issued by theRevenue. (iv) Simultaneously the other premises, i.e., at No.23, NoorVeeraswamy Street, Chennai - 34 also was searched on the sameday, i.e., on 25.01.2001. Thereafter pursuant to the prohibitoryorder issued by the Revenue, subsequent searches were takenplace on various dates during January, February, March, April,May and June 2001 and last such search operations was completedon 12.06.2001 and on that date also, a panchanama was drawn. (v) Subsequent to the said search operations and seizuremade under Section 132 of the Act, a notice under Section 158BCof the Act was issued on 05.10.2001 by the Revenue and pursuantto which, the petitioner filed a return for the block periodfrom 01.04.1990 to 24.01.2001 on 23.10.2001. Thereafter there (iv) Simultaneously the other premises, i.e., at No.23, NoorVeeraswamy Street, Chennai - 34 also was searched on the sameday, i.e., on 25.01.2001. Thereafter pursuant to the prohibitoryorder issued by the Revenue, subsequent searches were takenplace on various dates during January, February, March, April,May and June 2001 and last such search operations was completedon 12.06.2001 and on that date also, a panchanama was drawn. (v) Subsequent to the said search operations and seizuremade under Section 132 of the Act, a notice under Section 158BCof the Act was issued on 05.10.2001 by the Revenue and pursuantto which, the petitioner filed a return for the block periodfrom 01.04.1990 to 24.01.2001 on 23.10.2001. Thereafter there had been number of correspondences between the petitioner andthe Revenue and ultimately the Block Assessment Order for thesaid block period from 01.04.1990 to 31.03.2000 and from01.04.2000 to 24.01.2001 was issued by the Revenue on30.06.2003, computing the tax, surcharge and interest payable onthe undisclosed income by the petitioner to the extent ofRs.5,23,08,245/-. In the said block assessment order, theRevenue also initiated penalty proceedings as per proviso toSection 158BFA (2) of the Act. (vi) Though an appeal remedy is available to the petitionerto assail the said Block Assessment Order, the petitioner haschosen to file this writ petition on the ground that, the veryBlock Assessment Order itself is barred by limitation under theprovision, i.e., 158BE(1)(b) and also on the ground that therewas no notice under Section 143(2) of the Act issued and even ifit was issued, that was also barred by limitation and there hadbeen no prior approval of the Joint Commissioner of Income Taxwhich ought to have been obtained under Section 158BG of the Actand there had been a violation of principles of natural justice.Therefore on these grounds, instead of filing a regular appeal,the petitioner filed the present writ petition, challenging theBlock Assessment Order, which is impugned herein, dated30.06.2003 issued by the Revenue, to quash the same as prayedtherein. That is how this writ petition has come up before thisCourt. (vii) During the pendency of the writ petition, the originalwrit petitioner, Dr.Bharat Mehta deceased and in whose place thelegal representative of the deceased, Dr.Bharat Mehta, oneMr.Mehul Mehta has been substituted by the orders of this Court,dated 12.09.2017 and who contested this case. 3. Mr.M.P.Senthil Kumar, learned counsel appearing for thepetitioner has raised the following grounds in order to assailthe impugned Block Assessment Order :(a) The Block Assessment Order underSection 158BC r/w Section 158BD is barred bylimitation as per Section 158BE (1)(b). (b) The notice under Section 143(2)which is mandatorily to be issued even inrespect of 158BC proceedings, had not beenissued and assuming if it is issuedbelatedly, that is also barred by limitation. (c) Under Section 158BG, prior approvalwas to be obtained to proceed, from JCIT,which was not obtained and the learned counsel also raised the ground that, therehas been no opportunity given to thepetitioner during the entire proceedings,which ended in the impugned Block AssessmentOrder, thereby the Revenue violated theprinciples of natural justice. 4. By raising the aforesaid grounds, the learned counseltried to assail the impugned Block Assessment Order. In supportof his contention, the learned counsel for the petitioner wouldcontend that, totally two premises of the petitioner wassearched and documents were seized and according to the Revenue,the said search was conducted in both the premises on 25.01.2001pursuant to the authorisation given on 25.01.2001 itself and thesearch was over on that day and in the panchanama issued on thatday by the Revenue, they have clearly mentioned that, the searchwas concluded. 4. By raising the aforesaid grounds, the learned counseltried to assail the impugned Block Assessment Order. In supportof his contention, the learned counsel for the petitioner wouldcontend that, totally two premises of the petitioner wassearched and documents were seized and according to the Revenue,the said search was conducted in both the premises on 25.01.2001pursuant to the authorisation given on 25.01.2001 itself and thesearch was over on that day and in the panchanama issued on thatday by the Revenue, they have clearly mentioned that, the searchwas concluded. 5. When that being the position, thereafter, the question ofissuing prohibitory order under Section 132(3) of the Act doesnot arise, however, prohibitory order was issued and on thestrength of the prohibitory order, after a long gap, severaltimes search and seizure operations taken place at the premisesof the petitioner and according to the Revenue, it was acontinuous search and which was over only on 12.06.2001,therefore the said date, namely 12.06.2001 shall be reckoned asthe date for commencing the limitation period, within themeaning of Section 158BE (1)(b) of the Act, thereby the impugnedorder, i.e., Block Assessment Order, dated 30.06.2003 is withinthe limitation period of two years, thereby the impugned orderis not hit by the limitation under Section 158BE (1) (b). 6. However the learned counsel for the petitioner wouldcontend that, once the search was over on 25.01.2001 itselfpursuant to the authorisation given in this regard and there hasbeen no further authorisation given by the Revenue to continuethe search, the very issuance of prohibitory order under Section132(3) itself was unwarranted and therefore on that strength,there could be no further search on the very same authorisation.Therefore for the purpose of computing the limitation underSection 158BE(1)(b), the authorisation dated 25.01.2001 and thepanchanama dated 25.01.2001 shall alone be treated as startingpoint of the limitation and if that is taken into account, thetwo years period from the end of the month in which the last ofthe authorisation of search under Section 132 was issued wouldbe over by 31.01.2003 and therefore the impugned BlockAssessment Order dated 30.06.2003 is certainly beyond the twoyears limitation period, thereby it is barred by limitationunder Section 158BE(1)(b). 7. The learned counsel would further submit that, in respectof Block Assessment under Section 158BC, the Assessing Officershall proceed to determine the undisclosed income of the blockperiod in the manner laid down in Section 158BB and theprovisions of Sections 142 and 143(2) and (3) so far as may beapplied, which means that, whenever Section 158BC proceedings isinitiated to proceed to determine the undisclosed income ofblock period, the provisions which includes Section 143 of theAct would apply, therefore, a notice under Section 143(2) shouldhave been issued, which has either not been issued or if it isissued, which is beyond the limitation. 8. The learned counsel would further submit that, underSection 158BG, the order of Assessment for the block periodshall be passed by an Assessing Officer not below the rank ofAssistant Commissioner or Deputy Commissioner or AssistantDirector or Deputy Director as the case may be, however suchorder shall not be passed without the previous approval of thePrincipal Commissioner or Principal Director or Director in caseof search initiated under Section 132. 9. Here in the case in hand, since it is after 1st January1997, Section 158BG proviso (b) shall apply, under which, theJoint Commissioner or the Joint Director, as the case may be hasto give approval. 10. The learned counsel in this context would submit that,no such approval seems to have been obtained by the Revenue andsuch approval order has not been served or produced to thepetitioner. 9. Here in the case in hand, since it is after 1st January1997, Section 158BG proviso (b) shall apply, under which, theJoint Commissioner or the Joint Director, as the case may be hasto give approval. 10. The learned counsel in this context would submit that,no such approval seems to have been obtained by the Revenue andsuch approval order has not been served or produced to thepetitioner. 11. The learned counsel for the petitioner would furthersubmit that, throughout the assessment proceedings, no properopportunity, as has been contemplated under various provisionsof the Income Tax Act, have been given to the petitioner andtherefore, the very principle of natural justice has beenglaringly violated by the Revenue and therefore on that grounditself, the impugned Block Assessment Order has to be interferedwith, he contended. 12. In support of these contentions, the learned counsel forthe petitioner has relied upon various judgments, among them, heheavily relied upon the following judgments : 1. A.Rakesh Kumar Jain v. Joint Commissioner of Income tax,(2012) 254 CTC 0576 : (2012) 80 DTR 0257 2. C.Ramaiah Reddy v. Assistant Commissioner of Income Tax,(2011) 339 ITR 210 (Karnataka) : (2011) 244 CTR 126 (Karnataka) 13. Per contra, Mr.A.P.Srinivas, learned standing counselappearing for the Revenue, by relying upon the averments made inthe counter affidavit filed by the Revenue would contend that,the petitioner was subjected to a search under Section 132 of https://hcservices.ecourts.gov.in/hcservices/ the Act on 25.01.2001. The search was carried out in the placesof the petitioner and his family members, who run a familybusiness, namely a company called M/s. Emcorp Finance Ltd., onthe basis of separate warrants of authorisation issued in eachcase by the Director of Income Tax (Investigation), Chennai. Atthe time of commencement of the search operation, the warrant ofauthorisation in the name of the petitioner was produced to himand he has affixed his signature thereon for having seen thesame. 14. He would further submit that, in so far as theconclusion of the search on 25.01.2001 and therefore there wasno necessity to issue a prohibitory order is concerned, in sofar as the premises at No.4/181, Kodambakkam High Road, Chennai- 34 is concerned, the search was inconclusive and it was notconcluded, therefore prohibitory order was issued. He wouldfurther submit that, the search was initiated on 25.01.2001 atNo.4/181, Kodambakkam High Road and it continued on 30.01.2001,02.02.2001, 08.02.2001, 20.02.2001, 23.02.2001, 14.03.2001,04.04.2001, 22.05.2001 and finally on 12.06.2001. Only on12.06.2001, the search was finally concluded and on that datealso, panchanama had been drawn and each and every time when thesearch was conducted on the aforesaid dates, separate panchanamawere drawn and prohibitory orders were issued. 15. In so far as the long continuation of search startingfrom 25.01.2001 and ends up on 12.06.2001, the learned standingcounsel for Revenue would contend that, during the search,certain electronic devices were found, where lot of documentswere uploaded or saved by the assessee / petitioner and when thesame was questioned, the petitioner, till the last search, wasnot co-operating with the Revenue to disclose the password tohave access with those documents, therefore for these kind ofpurposes, the search operation was continued in the premises atNo.4/181, Kodambakkam High Road, Chennai - 34 and it ended onlyon 12.06.2001, where the Revenue was able to access with thesoftware documents stored in the computer and thereafter onlythe search operation was completed and the Revenue proceeded tofurther. 16. The learned standing counsel would also submit that, thesearch at No.23, Noor Veeraswamy Street, Chennai - 34 wascommenced at 1 p.m, on 25.01.2001 and concluded at 1.45 p.m, onthe same date and therefore in so far as the said search isconcerned at that premises, it was concluded on the same dayitself. However in so far as the search at No.4/181, KodambakkamHigh Road, Chennai - 600 034 is concerned, it commenced at about1 p.m, on 25.01.2001 and concluded on 09.50 p.m on 25.01.2001,that means, the search was inconclusive on 25.01.2001 andtherefore based on the panchanama, prohibitory orders wereissued in respect of that premises. 17. He would further submit that, ultimately on 05.10.2001,notice under Section 158BC was issued to the petitioner to filethe return of his undisclosed income for the block period inForm 2B and pursuant to which, the petitioner also filed therequisite return in Form 2B on 23.10.2001. 18. The learned standing counsel on the point of noticeunder Section 143(2) of the Act, has submitted that, the saidnotice under Section 143(2) of the Act was issued on 06.06.2003and served by way of affixture on 10.06.2003. The attempt toserve the notice to the assessee / petitioner was unsuccessfulon the first three successive occasions, as there was nobodywilling to receive the same, therefore the Revenue had no optionexcept to serve it by way of affixture. In this context, thedetailed averment made by the Revenue in the counter affidavithas been relied upon by the learned standing counsel. 19. The learned standing counsel would therefore submitthat, the limitation for the purpose of Section 158BE(1)(b)would not commence from 01.02.2001 and it would commence onlyfrom 01.07.2001, since the last search was conducted only on12.06.2001 and the month of last such search ends only on30.06.2001, therefore the impugned Assessment Order which wasissued on 30.06.2003 is saved within the limitation period of158BE(1)(b). 20. The learned standing counsel would also submit that,prior approval of the Joint Commissioner of Income Tax wasobtained under Section 158BG and throughout the proceedings tillthe end of the Assessment Order, several times notices wereissued and several correspondences had been made by thepetitioner and the procedure contemplated under variousprovisions of the Act had been scrupulously followed by givingopportunity as has been contemplated under the provisions of theAct to the petitioner. Therefore the allegation made against theRevenue by the petitioner that, there has been violation ofprinciples of natural justice is only an allegation for the sakeof making it to approach this Court by filing writ petitionunder Article 226 of the Constitution of India, since thepetitioner is very well aware that, there is a statutoryalternative efficacious appellate remedy, which admittedly thepetitioner has not availed and has approached straight away thisCourt by invoking the extraordinary jurisdiction of this Courtunder Article 226 of the Constitution and only for the sake ofapproaching this Court by invoking the writ jurisdiction, thesaid allegation of violation of principles of natural justicehas been made. 21. On the side of the citations referred to by the learned 21. On the side of the citations referred to by the learned counsel for the petitioner, the learned standing counsel for theRevenue would submit that, the two Judgments, namely RakeshKumar Jain as well as Ramaiah Reddy cases (cited supra) cannotbe made applicable to the facts of the present case, instead, aDivision Bench of this Court order made in Deputy Commissionerof Income-Tax, Central Circle II(1) v. Rakesh Sarin, reported in(2014) 222 Taxman 84 (Madras) : (2014) 362 ITR 619 (Madras)would apply to the facts of the present case, where the earliertwo decisions, namely Rakesh Kumar Jain and Ramaiah Reddy cases(cited supra) had been considered. Therefore on the strength ofthe aforesaid two decisions, the petitioner /assessee cannotmake out a case to state that, the limitation under Section158BE(1)(b) would commence from the end of the month of the lastpanchanama, which according to the petitioner was 25.01.2001 andnot from June 2001, as the Revenue claimed the last panchanamawas 12.06.2001 and therefore the said decisions cited by thepetitioner side, according to the learned standing counsel forthe Revenue, would no way enhance the winability of thepetitioner's case. Therefore the learned standing counsel wouldsubmit that, the impugned Block Assessment Order is sustainableand the very invocation of the provisions of Article 226 by thepetitioner without taking the route of the appellate remedywould itself fatal to the case of the petitioner and thereforethe writ petition is liable to be dismissed, he contended. 22. I have given my anxious consideration to the rivalsubmissions made by the learned respective counsel appearing forthe petitioner as well as the Revenue and have perused thematerials placed before this Court. 23. The Revenue though raised an objection that, the writpetition cannot be entertained as it is not maintainable in viewof the appellate remedy available under the Act to thepetitioner, however, since the writ petition is of the year2003, where the point of alleged violation of principles ofnatural justice as well as the limitation point under Section158BE(1)(b) and also the alleged non-issuance of notice underSection 143(2) of the Act since had been raised, probably onthese grounds, the writ petition would have been admittedalready and therefore at this length of time, during the finalhearing, this Court is not impressed with the said groundraised by the Revenue side to dismiss the writ petition on theground of availability of appellate remedy. Therefore this Courtfeel that, the writ petition can be entertained in view of thegrounds raised by the petitioner. 24. The ground that, there has been no approval from theJoint Commissioner of Income Tax as contemplated under Section158BG is concerned, it has been specifically averred in thecounter affidavit filed by the respondent that, as per the Notification, dated 16.04.2003, the Commissioner of Income-Tax,Central-I, Chennai, had transferred the case to the DCIT,Central Circle I(5), Chennai to DCIT, Central Circle I(3)Chennai, w.e.f., 16.04.2003. Though no specific averment hasbeen made that, the initial approval was given by JCIT underSection 158BG, it is the vehement contention on the part of theRevenue that, only pursuant to the approval given by the JCIT,the search in the premises of the assessee / petitioner wasmade, of course on specific authorisation. Taking into accountof these factors, since it is an allegation and the denial andthe Revenue has maintained that Section 158BG has been compliedwith, this Court accept the same. Notification, dated 16.04.2003, the Commissioner of Income-Tax,Central-I, Chennai, had transferred the case to the DCIT,Central Circle I(5), Chennai to DCIT, Central Circle I(3)Chennai, w.e.f., 16.04.2003. Though no specific averment hasbeen made that, the initial approval was given by JCIT underSection 158BG, it is the vehement contention on the part of theRevenue that, only pursuant to the approval given by the JCIT,the search in the premises of the assessee / petitioner wasmade, of course on specific authorisation. Taking into accountof these factors, since it is an allegation and the denial andthe Revenue has maintained that Section 158BG has been compliedwith, this Court accept the same. 25. In so far as the allegation that, there was no noticeunder Section 143(2) served on the petitioner is concerned, thespecific averment made in the counter affidavit reads thus : "33. The notice u/s 158BC was issued in thiscase on 05.10.2001 requiring the petitionerto file a return of his undisclosed incomefor the block period in Form 2B. In thisconnection, the allegation that the blockperiod was not specified in the said noticeis not correct in so far as in the noticeitself it is made known that the "blockperiod" is as mentioned in section 158B(a) ofthe Income Tax Act. Further, the petitionerfiled the requisite return in Form 2B on23.10.2001. I state that the notice u/s 143(2) of the Income Tax Act was issued on6.6.2003 and served (by affixture) on10.6.2003. 34. The allegation that no valid notice u/s143(2) was issued to the petitioner isfactually incorrect. The notice was issued on6.6.2003. The attempts to serve the noticewas not successful on the first threesuccessive occasions since there was nobodywilling to receive the same. Accordingly, ithad to be served by affixture on the fourthoccasion. The allegation regarding harassmentof any sort with ulterior motive is totallybaseless and it is only a fiction to justifythe filing of writ petition.35. I submit that the allegation that anotice u/s 143(2) was not issued and that anotice u/s 142(1) only was issued is notcorrect since the notices u/s 143(2) and 142(1) were issued on the same date (6.6.2003)and also served on the same date (10.6.2003).In the above assessment order, the Assessing Officer was mentioning the reason why thenotice u/s 142(1) was issued "only on6.6.2003" whereas the petitioner attempts toread the word "only" in connection with thewords "notice u/s 142(1)" to present as ifonly the notice u/s 142(1) was issued. Thisis not correct and the petitioner is wellaware of the same. The allegation that nonotice u/s 143(2) was issued and that thepetitioner represented his case before thefirst respondent only on the basis of oralrequirement is factually incorrect.36. The allegation that adequate opportunitywas not given to the petitioner before thecompletion of the block assessment isfactually incorrect since the case wasdiscussed with the petitioner and hisrepresentatives on as much as six occasions.Further Further, written submissions filed bythe petitioner were also duly considered." 26. In view of the said factual matrix as has been averredin the counter affidavit, which is not denied by thepetitioner / assessee, the said ground raised by the petitionerthat, no notice under Section 143(2) was issued, cannot beaccepted. 27. Now the main issue, as raised by the petitioner side, asto whether the Block Assessment Proceedings, i.e., theAssessment Order under Section 158BC r/w 158BD is barred bylimitation under Section 158BE (1) (b) or not, can be gone into. 26. In view of the said factual matrix as has been averredin the counter affidavit, which is not denied by thepetitioner / assessee, the said ground raised by the petitionerthat, no notice under Section 143(2) was issued, cannot beaccepted. 27. Now the main issue, as raised by the petitioner side, asto whether the Block Assessment Proceedings, i.e., theAssessment Order under Section 158BC r/w 158BD is barred bylimitation under Section 158BE (1) (b) or not, can be gone into. 28. In this context, the contention of the petitioner sideis that, on 25.01.2001, first search was made in both thepremises and on that date, a panchanama was drawn, where it hasbeen specifically mentioned that, "search concluded", however onthe very same date, the prohibitory order under Section 132(3)of the Act was issued by the Revenue which is unwarranted.Therefore on the strength of the said prohibitory ordercontinuous search was made on various dates till June 2001 andtherefore by taking advantage of those subsequent searches,which are unauthorised, the Revenue cannot claim that, the lastpanchanama was drawn only on 12.06.2001 and therefore thelimitation for the purpose of Section 158BE(1)(b) would commenceonly after the end of the month where the last such panchanamawas drawn, i.e., 30.06.2001 and therefore the impugned order,since was passed on 30.06.2003, is within the limitation, cannotbe accepted, is concerned, as has been pointed out by thelearned standing counsel for the Revenue, the search wasconducted on 25.01.2001 in two premises, one is at 23, Noor Veeraswamy Street, Chennai - 34 and another one is at No.4/181,Kodambakkam High Road, Chennai - 34. 29. I have perused the copy of the panchanamas issued inrespect of both premises, dated 25.01.2001 and a copy of whichalso had been filed by the petitioner in the typedset of paperswhich discloses that, in so far as the panchanama in respect ofNo.23, Noor Veeraswamy Street, Chennai - 34 is concerned, it hasbeen specifically written in the panchanama by the Revenue that"search concluded". 30. However in respect of panchanama issued on the samedate, i.e., on 25.01.2001 in respect of the premises atNo.4/181, Kodambakkam High Road, Chennai - 34, the panchanamaspecifically mentions that "search continues" and on that date,prohibitory order was issued only in respect of No.4/181,Kodambakkam High Road, Chennai - 34 premises and not in respectof No.23, Noor Veeraswamy Street, Chennai - 34. 31. Even on subsequent dates also, i.e., in the months ofFebruary to June, each time when the panchanamas were drawn as aproof for having searched the premises at No.4/181, KodambakkamHigh Road, Chennai - 34 is concerned, according to the Revenue,the search continued, therefore every time, prohibitory orderunder Section 132(3) of Income Tax Act was issued and lastly thesearch was completed on 12.06.2001. Therefore the panchanamadrawn on 12.06.2001 is the culmination of continuation ofpanchanamas in respect of the same premises, i.e., No.4/181,Kodambakkam High Road, Chennai-34 and therefore that shouldalone be treated as a last panchanama drawn by the Revenue inrespect of the said premises. 32. With these factual matrix, the relevant provisions ofthe Act can be looked into.33. Section 158BE, which contemplate the limitation, readsthus: "Time limit for completion of blockassessment 158BE (1) The order under section 158BC shallbe passed - (a) within one year from the end of the monthin which the last of the authorisation forsearch 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 after the 30th dayof June, 1995, but before the 1st day ofJanuary, 1997.(b) within two years from the end of the 32. With these factual matrix, the relevant provisions ofthe Act can be looked into.33. Section 158BE, which contemplate the limitation, readsthus: "Time limit for completion of blockassessment 158BE (1) The order under section 158BC shallbe passed - (a) within one year from the end of the monthin which the last of the authorisation forsearch 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 after the 30th dayof June, 1995, but before the 1st day ofJanuary, 1997.(b) within two years from the end of the month in which the last of the authorisationsfor search under section 132 or forrequisition under section 132A, as the casemay be, was executed in cases where a searchis initiated or books of account or otherdocuments or any assets are requisitioned onor after the 1st day of January, 1997." 34. Explanation (2) to Section 158BE is very relevant, thatis also extracted hereunder for easy reference : "Explanation 2 - For the removal of doubts,it is hereby declared that the authorisationreferred to in sub-section (1) shall bedeemed to have been executed -(a) in the case of search, on the conclusionof search as recorded in the last panchanamadrawn in relation to any person in whosecase the warrant of authorisation has beenissued;(b) in the case of requisition under section132A, on the actual receipt of the books ofaccount or other documents or assets by theAuthorised Officer." 35. For any assessment under Section 158BC, there must be asearch under Section 132 and if a search is conducted underSection 132, on the conclusion of such search, as recorded inthe last panchanama drawn, it shall be deemed to have beenexecuted as authorisation for the purpose of limitation ascontemplated under Section 158BE(1) (a) & (b) and in this case,158BE(1)(b) would apply since it is a case after 1st January1997. 36. This provision of Section 158BE with the explanation (2)has been widely discussed and interpreted by the Karnataka HighCourt in C.Ramaiah Reddy v. Assistant Commissioner of IncomeTax, reported in (2011) 339 ITR 210 (Karnataka) : (2011) 244 CTR126 (Karnataka). In order to appreciate the same, the relevantportion of Ramaiah Reddy's case of Karnataka High Court isextracted hereunder : "77. The panchnama referred to in Explanation2 to the said section specifically refers tosearch under section 132 and section 132specifically refers to authorisation to enterand search and it has no reference toentering and searching the premises which arethe subject-matter of prohibitory order orrestraint order. No authorisation is requiredto enter the premises and inspect thematerials which are the subject-matter of prohibitory order or restraint order. Thesaid order itself acts as an authorisation toenter the premises and inspect the materialswhich are the subject-matter of those ordersand it also empower them to seize anyincriminating material. However, afterentering the premises of such person, he hasto confine his actions only for inspection ofthe subject-matter of prohibitory order orrestraint order. He cannot search thepremises over again. Any material seizedafter such inspection would be theundisclosed income for the purpose of theblock assessment in pursuance of search undersection 132(1) of the Act. The panchnamaevidencing such inspection and seizure wouldbe the last panchnama in respect of the saidpremises. But for the purpose of limitationunder section 158BE, it would not be the lastpanchnama drawn in proof of conclusion ofsearch, as defined in Explanation 2 tosection 158BE. For the purpose of limitation,there can be only one search and onepanchnama.78. The law expressly provides for more thanone authorisation. A search authorisationcould specify only one building / place /vessel / vehicle/aircraft. This is clear fromthe use of the building, etc., in thesingularsense.Section132(1)usesbuilding / place / vessel / vehicle /aircraft in singular sense. Further, clause(a) in Form 45 uses the word, “to enter andsearch, the said building / place /vessel /vehicle / aircraft. When there are multipleplaces to search and such places are far off,it is impractical to have a singleauthorisation. Different persons will becarrying out search and each one of them isrequired to be authorised through the searchauthorisation. In other words, searchauthorisation should authorise a particularofficial for executing the search. Therefore,when there are different places to besearched, separate search authorisationshould be drawn with reference to each placeof search. The said authorisations may beissued on different dates in which case, thelast of such authorisations is to be lookedinto for the purpose of limitation. However, it is possible that there may be more thanone authorisation on the same day. Then thequestion is which is the last of suchauthorisations for the purpose of limitation.When all the authorisations are executedthere will be one panchnama in respect ofeach such authorisation. The authorisationsmay be executed on different dates also. Thenthe doubt would arise regarding whichauthorisation to be looked into for thepurpose of limitation as all of them are lastauthorisation. It is for removal of thatdoubts that the Explanation is inserted. Forthe purpose of computing the limitation, itis the one year from the end of the month inwhich the last of the authorisations wasexecuted. If there are more than oneauthorisation issued on the same day, thenthe last panchnama drawn in relation to thewarrant of authorisation issued on the sameday. As the period commences from the end ofthe month of the execution of theauthorisation, the law has provided for theauthorised officer to visit the premises forthe purpose of inspection regarding thematerial which is the subject-matter ofprohibitory order or the restraint order,even after search. However, the said exercisehas to be done expeditiously, as the periodof limitation starts from the date of searchwas concluded as evidenced by the panchnama,as otherwise the very object with which theseprovisions was introduced would be defeated.79. Circular No. 772, dated 23rd December,1998, issued by Central Board of Direct Taxesexplains this position as under ([1999] 235ITR (St.) 35):“According to section 158BE, limitation of 2years has to be counted from the end of themonth in which last of the authorisations wasexecuted. Use of the word ‘authorisations’implies issue of more than one authorisation.Supposingly two authorisations are issued oneafter the other and the last authorisation isexecuted first while the authorisation issuedearlier is executed later on. In such case,limitation should be counted from the date ofissue of the execution of the lastauthorisation, though it is executed earlierand not from the execution of the earlier authorisation which is executed later. Thisanomalous situation is intended to be removedby insertion of Explanation 2 below section158BE with effect from July 1, 1995, by theFinance (No. 2) Act, 1998. This Explanationreads as follows:‘Explanation 2. —For the removal of doubts,it is hereby declared that the authorisationreferred to in sub-section (1) shall bedeemed to have been executed, —(a) in the case of search, on the conclusionof search as recorded in the last panchnamadrawn in relation to any person in whose casethe warrant of authorisation has been issued;(b) in the case of requisition under section132A, on the actual receipt of the books ofaccount or other documents or assets by theauthorised officer.’According to this Explanation, limitation isto be counted with reference to the lastpanchnama drawn on execution of a warrant ofauthorisation as referred to in section158BE. The main attribute of the panchnama isstated to be that it should record theconclusion of search.”80.The law does not contemplate theauthorised officer to set out in any of thepanchnama that he has finally concluded thesearch. If for any reason the authorisedofficer wants to search the premises again,it could be done by obtaining a freshauthorisation. There is no prohibition inrespect of the same premises. It is open totheempoweredauthoritytoissueauthorisation but when the authorisation isissued once, the authorised officer cannot goon visiting the premises under the guise ofsearch. Therefore, it is clear once inpursuance of an authorisation issued thesearch commences, it comes to an end with thedrawing of a panchnama. When the authorisedofficer enters the premises, normally, thepanchnama is written when he comes out of thepremises after completing the job entrustedto him. Even if after such search he visitsthe premises again, for investigation orinspection of the subject-matter of restraintorder or prohibitory order, if a panchnama iswritten, that would not be the panchnamawhich has to be looked into for the purpose of computing the period of limitation. But,such a panchnama would only record whattranspires on a re-visit to the premises andthe incriminating material seized wouldbecome part of the search conducted inpursuance of the authorisation and wouldbecome the subject-matter of block assessmentproceedings. But, such a panchnama would notextend the period of limitation. It isbecause the limitation is prescribed underthe statute. If proceedings are not initiatedwithin the time prescribed, the remedy islost. The assessee would acquire a valuableright. Such a right cannot be at the mercy ofthe officials, who do not discharge theirduties in accordance with law. The procedureprescribed under section 132 of the Act iselaborateandexhaustive.Thesaidsubstantive provision expressly provides forsearch and seizure. In the entire provisionthere is no indication of that search oncecommenced can be postponed. What can bepostponed is only seizure of the articles.Therefore, once search commences it has tocome to an end with the search party leavingthe premises whether any seizure is made ornot. The limitation for completion of blockassessment is expressly provided undersection 158BE which clearly declares that itis the execution of the last of authorisationwhich is to be taken into consideration. Theword “seizure” is conspicuously missing inthe said section. The same cannot be readinto the section for the purpose oflimitation. Then it amounts to rewriting thesection by the court, which is impermissiblein law. 81. The aforesaid Circular No. 772, datedDecember 23, 1998 (see [1999] 235 ITR (St.)35) refers to this dilemma faced by theDepartment.“127. Execution of last of the authorisationor requisitionThe word ‘execute’ is defined in Black's LawDictionary, fifth edition, page 509 asfollows:‘to complete; to make; to sign; to perform;to do; to carry out according to its terms;to follow up; to fulfil the command orpurpose of; to perform all necessary formalities; to make and sign a contract; tosign and deliver a notes.’The word ‘execution’ is defined at page 510of the said Law Dictionary as follows:‘Carry out some act or course of conduct toits completion. Northwest Steel Rolling Millsv. Commissioner of Internal Revenue, C.C.A.Wash., 110 F. 2d 286, 290: completion of anact:puttingintoforce:completionfulfilment: perfecting of anything orcarrying it into operation and effect.“Execution” a process in action to carry intoeffect the directions in a decree or judgment—Foust v. Foust, 47 Cal. 2d 121, 302 p. 2d11, 13.’In the light of the above definition of thewords ‘execute’ and ‘execution’, one mayargue that until and unless the final act isperformed, the warrant of authorisationshould not be treated as executed and themere initiation of the search followed by aninterregnum consequent upon restraint orderor for any other reason may not be treated as‘execution’ of the warrant. But thisinterpretation would be hypertechnical and itneeds detailed discussion as is done in thefollowing paras.The question arises as to whether executionof a warrant of authorisation or requisitionrefers to the conclusion of the proceedingsunder section 132 and/or 132A or it refersonly to the execution of the warrant eventhough as a result of such execution theproceedings under section 132 or 132A are yetto he completed. The latter situation willinclude a case in which a restraint orderunder section 132(3) is passed. In such acase, it can be said that though the warrantofauthorisationhasbeenexecuted,proceedings under section 132(3) are pending.Since the word ‘execute’, also means ‘tocomplete’, one has to wait for conclusion ofthe proceedings under section 132(3) for thepurpose of computation of limitation undersection 158BE(1) and the period of one yearhas to be computed from the end of the monthin which the proceeding under section 132(3)are concluded. If there are more than onewarrant limitation will be counted from theexecution of the last one. A contrary view is as much possible if onewere to consider the spirit of the schemewhich envisages expeditious disposal of thesearch cases and it would be reasonable tointerpret that execution of warrant is nottantamount to completion of proceedings undersection 132 or 132A the period during whichthe proceedings under section 132(3) remainedpending has to be excluded for the purpose ofcounting limitation of one or two years undersection 158BE. Otherwise, it may lead toabsurd results as it may take several yearsbefore restraint under section 132(3) islifted and it may thus extend the period ofone or two years by all those years duringwhich proceedings under section 132(3)remained pending it may be agreed againstthis view that section 132(8A) takes carethat there is no extension of proceedingsunder section 132(3) and that the view can-,not be taken without doing violence to thelanguage of the Act.”82.Therefore, the Explanation added to removea doubt cannot be construed, as a provisionproviding a longer period of limitation thanthe one prescribed in the main section. Whenunder the scheme of the section there is noindication of a second search on the basis ofthe same authorisation issued under the saidprovision, the legislative intention is clearand plain and the interpretation to be placedby the courts should be in harmony with suchan intention. Therefore, one authorisation isto be issued in respect of one premises inpursuance of which there can be only onesearch and such a search is concluded, whenthe searching party comes out of thepremises, which is evidenced by drawing up apanchnama. When there are multiple places tosearch and when multiple authorisations areissued, on different dates or on the samedate or in respect of the same premises morethan one authorisation is issued on differentdates, the last panchnama drawn in proof ofconclusion of search in respect of theauthoris