Supreme Court

Anil Minda vs. Commissioner Of Income Tax

MANU/SC/0303/2023

24.03.2023

Direct Taxation

The date of the Panchnama last drawn would be the relevant date for considering the period of limitation of two years

The respective assessees have preferred the present appeals feeling aggrieved with the impugned common judgment and order passed by the High Court, by which the Division Bench of the High Court has set aside the orders passed by the Income Tax Appellate Tribunal, New Delhi ( ‘ITAT’) holding that the assessment orders passed in the case of the respective assessees were time barred as the assessments were not completed within two years from the end of the month in which the last authorisation for search under Section 132 of the Income Tax Act, 1961 was issued.

The short question which is posed for the consideration of this Court is, whether the period of limitation of two years for the block assessment under Section 158BC/158BE of IT Act would commence from the date of the Panchnama last drawn or the date of the last authorization?

In the present case, the first authorization was issued on 13th March, 2001 which ultimately and finally concluded and/or culminated into Panchnama on 11th April, 2001. However, in between, there was one another authorization dated 26th March, 2001 with respect to one locker and the same was executed on 26th March, 2001 itself and Panchnama for the same was drawn on 26th March, 2001. However, Panchnama drawn with respect to authorization dated 13th March, 2001 was lastly drawn on 11th April, 2001.

As observed and held by this Court in the case of VLS Finance Limited vs. Commissioner of Income Tax And Anr., the relevant date would be the date on which the Panchnama is drawn and not the date on which the authorization is issued. 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.

If the submission on behalf of the respective assessees that the date of the last authorization is to be considered for the purpose of starting point of limitation of two years, in that case, the entire object and purpose of Explanation 2 to Section 158BE would be frustrated. The view taken by the High Court that the date of the Panchnama last drawn would be the relevant date for considering the period of limitation of two years and not the last date of authorization, present Court is in complete agreement with the view taken by the High Court. Appeals dismissed.

Tags : Assessment orders Panchnama Time limit

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