The Supreme Court of India in a recent ruling observed that the Date of Panchnama last drawn is Starting Point of Limitation of Two Years for completing Block Assessment Proceedings. The appellants in the present matter are Anil Minda and Others.
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 would commence from the date of the Panchnama last drawn or the date of the last authorization.
The notice under Section 158 BC for filing block assessment was issued. The assessee filed his return and the assessment was completed by passing the assessment order in April 2003. Similar assessment orders were passed in the case of other assessees. The respondents–assessees filed appeals challenging the assessment orders, inter alia, on the ground that the assessment was time-barred.
According to the assessees, limitation of two years as prescribed under section 158BE of the Act, which was to be computed when Panchnama in respect of the second authorization was executed, i.e., on 26.03.2001. Since that Panchnama was drawn on 26.03.2001, two years period as prescribed under Section 158BE(b) of the Act came to an end by March 2003 and the assessment order was passed in April 2003, which according to the assessee was thus time-barred.
On the other hand, the plea of the department was that since the last Panchnama through related to search authorization dated 13.03.2001 was executed on 11.04.2001, limitation of two years was to be computed from that date and therefore the assessment was passed was well within the prescribed limit.
A Division Bench of Justices MR Shah and CT Ravikumar ruled that “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.”
The Bench relied on the judgment in VLS Finance Limited, wherein it was held that the relevant date would be the date on which the Panchnama is drawn and not the date on which the authorization/s is/are issued.
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