- (1.) THE subject matter of challenge in the appeal is a judgment dated 11th April, 2008 pertaining to the block period 1990 -1991 to 2000 -2001.
(2.) THE learned Tribunal held that the assessment was barred by limitation for the following reasons: - - "On plain reading of the above section it is evident that the A.O. before exercising power u/s. 142 (2A) should objectively consider the material available with him and reach a bona fide conclusion/opinion that special audit u/s. 142(2A) is essential in view of complexity of accounts coupled with interest of Revenue. Before us, no such document could be produced by the Ld. Departmental Representative whereby the A.O. has formed such opinion in terms of Sec. 142(2A), as stated above. In the letter issued from the office of the C.I.T. Jalpaiguri to the A.C.I.T. Cir -2, Siliguri, there was mention of two letters bearing Nos. 130 and 316 dated 26.06.2000 and 10.09.2000. But copies of these two letters were not produced before us. Furthermore, those letters were written before the start of the block assessment proceedings on 15.12.2000. Therefore, it is evident that even before the first day of assessment proceeding, the A.O. had formed opinion to get the accounts audited. Secondly, there is no order u/s. 142(2A) by the A.O.. The A.O. has only forwarded the administrative approval of the C.I.T. vide his letter dated 20.09.2000 to the Auditor Sri P.C. Maskara. Thirdly, in the letter dated 20.09.2000 written by the A.O. to the auditor there is no mentioned about the time within which audit report is to be submitted. As per clause (ii) of Explanation I of below Sec. 158BE (2), what is to be excluded from the period of limitation is the time given to the Auditor to conduct the audit. If there would be no specific period given to the auditor for completing the audit, then no period can be excluded. The period of limitation has to be decided only on the express provisions as contained in Chapter XIV -B of the Act relating to block assessments. In Chapter - XIV -B, Sec. 158BE(1) provides the period of limitation. As per clause (b) of Sec. 158BE(1), the assessment of the block period is to be completed within two years from the end of the month in which the last authorization for the search u/s. 132 was executed. Such period of limitation can be extended only if the conditions prescribed in various clauses of Explanation I below Sec. 158BE(2) are satisfied. It was contended by the Revenue that the conditions prescribed in clause (ii) of Explanation I below Sec. 158BE(2) are satisfied i.e. the accounts of the assessee were got audited u/s. 142(2A). We have already examined this contention of the Revenue and we have noticed that there is no order for getting the accounts audited u/s. 142(2A) by the A.O.. The A.O. has simply forwarded such forwarding letter no time limit is prescribed within which the audit is to be completed. Therefore, in our opinion, the conditions prescribed in clause (ii) of Explanation I below Sec. 158BE(2) are not satisfied and, therefore, the A.O. was required to complete the audit as per Sec. 158BE(1)(b). The search has taken place at the assessee's premises on 18.08.1999. The two years from the end of the month would complete on 31.08.2001. The assessment order is passed by the A.O. on 28.01.2002, which is clearly barred by limitation. Therefore, the assessment order being barred by limitation is annulled."
(3.) AGGRIEVED by the order of the learned Tribunal, the revenue has come up in appeal. The following question of law was suggested; - " a) Whether on the facts and in the circumstances of the case, the Income -tax Appellate Tribunal is correct in holding that the assessment made on 28.1.2002 was time barred in terms of section 158BE(1)(b) of the Income tax Act, 1961, read with clause (ii) of Explanation below section 158BE of the Act to the effect that the period of limitation would be extended by the time taken for special audit under section 142(2A) of the Income -tax Act, 1961 conducted in accordance with the approval of the Commissioner of Income -Tax accorded on the proposal of the Assessing Officer and consent of the assessee thereto with reference to the search material in the possession of the Assessing Officer handed over to the Auditor - It is not in dispute that the assessment should have been completed on or before 31 August, 2001, which would be within a period of two years, as required under section 158BE(2)(b). It is also not in dispute that the period of two years shall correspondingly be extended by the time which was consumed in carrying out the special audit under Explanation (1)(ii) of section 158BE.;