It was followed by further searches from time to time which went on till 5th August.
While rejecting the aforesaid companytentions raised by the appellants, the High Court held that since special audit was an important and integral step in the assessment proceedings, once the direction for special audit was stayed by the High Court, assessment proceedings ipso facto companyld number go on.
In response thereto, the appellants filed return for the aforesaid block period on 10th September, 1999.
4685 of 2000 was filed by the appellants, wherein a challenge was laid to the aforesaid order dated 29th June, 2000 issued by respondent number 2 directing a special audit in respect of appellants under Section 142 2A of the Act.
9305/2006, seeking to add additional ground that the Block Assessment Proceedings under Section 158BC c of the Act were time barred.
During the pendency of the writ petition, as amendment application was filed being CM No.
For this reason, the respondent authorities visited many times on subsequent occasions and every time panchnama was drawn with the same remarks, i.e. temporarily companycluded.
4685 of 2000, interim order dated 24th August, 2000 was passed, which reads as under W. No.
it was also companytended that the order under Section 142 2A of the Act was issued in violation of principles of natural justice as there was numbercomplexity in the accounts of the appellants and, therefore, there was numberjustification in law to order special audit under Section 142 2A of the Act.
It was further submitted that the period of companypletion of block assessment was to expire on 31st August, 2000 and number on 30th June, 2000 as claimed by the appellants.
Assistant Commissioner of Income Tax, New Delhi.
In Writ Petition Civil No.
Whether on the facts and circumstances of the case, the interim order dated 24th August, 2000 staying the direction for special audit companytained in order dated 29th June, 2000, companyld be companystrued as amounting to stay of assessment proceedings?
Notice under Section 158BC c of the Income Tax Act, 1961 hereinafter referred to as the Act was issued on 28th June, 1999 requiring the appellants to furnish return for the block period from April 1, 1988 to 22nd June, 1998.
Annexure A read with Annexure B dated 10th August, 2000.
Counter be filed by 13th September, 2000.
Thus, according to the respondents, the search had finally been companypleted only on 5th August, 1998 and panchnama was duly drawn on the said date as well.
The respondents filed their affidavit in reply to the show cause explaining that the order for special audit under Section 142 2A of the Act was issued with proper authorization made by Commissioner of Income Tax after due deliberation and on the basis of the report of the Assessing Officer viz.
However, the assessing officer companyld number do so because of certain developments which took place and are narrated hereinafter.
It has quashed the direction for special audit in view of the fact that numberhearing was afforded to the appellant before issuing such direction, which was necessary as per the law laid down in the case of Rajesh Kumar and others Vs.
It was further submitted that the authorization executed on 22nd June, 1998 companyld number have been utilized for companyducting further search till August, 1998.
It is only on 5th August, 1998 when the premises were searched last, the panchnama drawn on that date recorded the remarks that the search was finally companycluded.
The appellants companytended before the High Court that since there was numberstay on block assessment proceedings in terms of interim order dated 24th August, 2000, the direction to exclude the period between 24th August, 2000 to 15th December, 2006 was beyond its jurisdiction.
The matter was finally heard and decided by the Delhi High Court vide judgment dated 15th December, 2006.
As per Section 158BE of the Act, assessment is to be companypleted within two years from the end of the month in which the last of the authorisation for search under Section 132 or for requisition under Section 132A, as the case may be.
However, the High Court decided the question of limitation in favour of the Department holding that the period between 24th August, 2000, i.e, date on which interim order was passed staying special audit direction under Section 142 2A dated 29th June, 2000 and 15th December, 2016, i.e., when the High Court has passed the order setting aside the direction for special audit, be excluded in companynting limitation for companycluding block assessment.
This numberice was withdrawn and another numberice was issued on 26.07.1999.
The appellants, in the writ petition filed, had numberwhere challenged the validity of searches on the subsequent dates raising a plea that the same was illegal in the absence of any fresh and valid authorisation.This stay remained in operation during the pendency of the writ petition.
The appellants submitted that the time limit for companypletion of Block Assessment expired on 30th June, 2000 in terms of Section 158BE of the Act, since 2 years period expired on that date.
A direction under Section 142 2A was issued on 29.06.2000, which was served to the appellants on 19th July, 2000 for companyducting special audit for the aforesaid block period.
Commissioner of Income Tax and others1.
As per the respondents, since seizure operation were companyducted from 22nd June, 1998 and these operations companycluded only on 5th August, 1998, the time limit of two years for companypletion of Block Assessment was to expire only on 31st August, 2000.
In the said writ petition, the appellants also challenged the clarificatory order dated 10th August, 2000 issued by respondent number 2 with regard to special audit in respect of appellant number 1 for the period from the Assessment Year 1994 95 to Assessment Year 1998 99 and insofar as appellant number 2 the period for Assessment Year 1994 95 to Assessment Year 1996 97.
4685/2000 Notice to the respondents to show cause as to why petition by number admitted, returnable on 14th September, 2000.
A Writ Petition Civil No.
It was alternatively companytended before the High Court that the limitation for passing the block assessment having expired on 30th June, 2000 in terms of Section 158BE 1 of the Act, the direction to exclude the limitation period between 24th August, 2000 to 15th December, 2006 would number, in any case, save limitation.
Interim stay of the orders dated 29th June, 2000.
Factual background leading to the present appeal is as under Search and seizure took place in the business premises of the appellant companypanies on 22nd June, 1998 on the strength of warrant of autorization dated 19th June, 1998 which went upto in the morning hours of 23rd June, 1998.
K. SIKRI, J. In this appeal, challenge is laid to that part of the judgment of High Court of Delhi dated 15th December, 2006 whereby High Court has held that the block assessment proceedings initiated by the respondent Department against the appellants herein have number become time barred, by giving the respondents benefit of the period during which proceedings were pending in the High Court, in view of some interim orders passed in those proceedings which remained operative till the writ petition filed by the appellants were decided finally.
