Sec.153B(2)(a) Mere Panchnama would not extend period of limitation

It is seen that as far as Authorization E. No. 0069 is concerned, the search concluded on 22^nd March, 2007 itself. The only question is whether because of Authorization E. No. 0068 where a second visit was made to the Ashok Vihar premises on 15^th May, 2007 and only on that date was it noted in the panchnama that the  period of limitation for completing the assessment would begin to commence from the last date of the financial year in which the search If this case of the Revenue were to be accepted, then the limitation period for completing the assessment stood extended up to 31^st December, 2009. Factually, in the present case, the assessments were completed on 24^th December/ 31^st 2009 whereas if the Assessee’s case – that the search concluded on 22^nd March, 2007 ± is correct, then the assessment had to be completed by 31^st December, 2008.

What happened on 15^th May, 2007 is apparent from the second panchnama relating to the search authorization E. No. 0068. In paragraph 5(b) of the panchnama, the title is “The following were found but not seized”. Under Sub-clause (ii) there under, it is stated “Item Nos. 1 to 13 of Ms. Preeti Jain (wife of Rajiv Jain) as per the valuation report in jewellery items dated 21st March, 2007 and S. Nos. 6, 7,9, 10,12,14,17, 21, 22, 23, 24 right up to 30, 33, 35 and on person items were released”. Therefore, all that happened on 15th May, 2007 was that the factum of valuation reports having been prepared already on the previous date i.e., 21st March, 2007 was noted and the jewellery items were released. Under paragraph 5(a) under the title “The following were found and seized”, under sub-clause (iv) it is stated that ‘jewellery, ornaments etc. which have been inventoried separately for each place from where recovered as per Annexure-J (4 sheets vide valuation report dated 21st March, 2007 Item Nos. 1, 2, 3, 4, 5, 8, 11, 13, 15, 16, 18, 19, 20, 25, 26, 31, 32, 34, 36 and 37 seized.”In fact, there was no seizure because nothing new was found. All the other items which were already valued on 21st March, 2007 and for which valuation report was already prepared were shown as seized but in fact were not seized. The net result is that on 15th May, 2007 nothing was found which had not already been found by the Department on the first day i.e., 21st March, 2007.

The Court is not prepared to accept the plea of the Revenue that merely because a panchnama was drawn up on 15^thMay, 2007 showing that the search was ‘finally concluded’ on that date, it postponed the period of limitation in terms of Section 153B (2) (a) of the Act. It had to be the “last panchnama drawn in relation to any person in whose case the warrant of authorization has been issued”. The last panchnama, no doubt, is dated 15^th May, 2007 but what it records is the seizure of the jewellery items not of any of the persons searched but the wives of one of the directors i.e., of Ms. Neena Jain who was not even a director of any of these entities. Therefore, even assuming that the jewellery of Ms. Neena Jain was seized under panchnama of 15^th May, 2007, as far as the searched entities are concerned, the Revenue cannot take advantage of Section 153B (2) (a) to contend that the period of limitation in respect of them stands extended for completing of assessment up to 31^st December, 2009.

CORAM:

JUSTICE S.MURALIDHAR

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