FACTUAL MATRIX

1. This appeal is by the assessee challenging the order passed by the Tribunal on various grounds, including the findings recorded by the appellate Tribunal that the appellate Tribunal has no jurisdiction to examine the legality of the action of the authorizing officer anterior to the assessment officer, commencing the assessment proceedings.

2. On 05.12.1995, search operations were carried out in the assessee’s premises. On the conclusion of the search operations on 05.12.1995, the authorized officer clamped prohibitory order under Section 132 in respect of certain jewelleries, books of accounts etc., found at the time of search. Later on, on 24.01.1996. the authorized officer prepared one more panchanama in which the prohibitory order passed under Section 132(3) on 05.12.1995 was lifted. The books of accounts, jewelleries, etc., which were earlier kept under the prohibitory order were released. There was no seizure effected on 24.01.1996 when the search proceedings were stated to be concluded in the panchanama. It states, the prohibitory order was passed on 05.12.1995 itself. Thereafter, an order of block assessment under Section 158(B)(C) of the Income Tax Act 1961 (for short, hereinafter referred to as, ‘the Act’) was passed by the assessment officer on 28.01.1997. Aggrieved by the said order is assessment, the assessee preferred an appeal before the Tribunal in accordance with the provisions of the law, as was prevailing at the relevant point of time. The assessee contended before the Tribunal among other grounds that the block assessment was barred by limitation under Section 158(B)(E)(i) of the Act. When the matter was pending before the appellate Tribunal, the Revenue filed an application for referring the matter to a Special Bench, in view of the conflicting decisions rendered by various Tribunals in respect of the issues involved in the appeal. Accordingly, the Tribunal framed the following three questions for consideration by the Special Bench. The three points that were referred for consideration by the Special Bench are as under:

SCOPE OF APPEAL

(i) Whether the Tribunal could examine the search activity from the time, the search is started so as to determine as to at what point of time the search would said to have been come to a close, for the sole purpose of examining whether the assessment is in time or otherwise?

LIMITATION

(ii) Whether the term within one year from the end of the period in which the last of the authorization for search under Section 132 was executed has to be taken to mean the execution of the warrant resulting in seizure and not with reference to issuing of prohibitory order and successive visits that are claimed as search, which are so carried out on the basis of the only authorization that was issued initially?

PANCHANAMA

(iii) Whether, where a search is carried on the basis of the authorization resulting in seizure of some items, issue of prohibitory order on others, such search could be said to be genuine and comes to a close only when the authorizing officer says that in writing and visits the premises and by seizing some items that are covered by prohibitory order which could have been seized by him even at the first instance and it is not the case of the Department especially when the item so seized finally is not one of those items that are covered by Sections 132, 131(1) and 132(3) of the Act.

3. After hearing the learned counsel for the parties on the aforesaid three issues, the Tribunal held that, the first and third questions are answered by the Special Bench in the affirmative while the second question in negative. However, all the three learned members of the Bench have written separate orders dealing with various aspects, which were urged before them. Aggrieved by the said order of the Special Bench, the assessee is in appeal.

ARGUMENTS

4. The learned counsel for the assessee assailing the impugned order of the Tribunal contended under the Scheme