S. 158BE: A panchnama which does not record a search does not extend limitation

ACIT vs. Shree Ram Lime Products Ltd (ITAT Jodhpur Special Bench)

The AO issued two authorizations for search, one dated 17.2.2002 and the other 20.12.2002. In respect of the first authorisation, the last panchnama was drawn on 3.1.2003 while in respect of the second authorization, the last panchnama was drawn on 27.2.2002. The s. 158BC assessment order was passed on 31.1.2005 on the basis that the “last panchnama” was drawn on 3.1.2003. The assessee claimed that as the panchnama dated 3.1.2003 was merely for revocation of a s. 132(3) order, it was not a “panchnama of search” and so could be taken into account. The “last panchnama” was the one dated 27.2.2002 according to which the assessment order was barred by limitation u/s 158BE read with Explanation 2 thereof. HELD by the Special Bench upholding the plea: