The Supreme Court held that for the purpose of computing the limitation period for completion of block assessments under Sections 158BC and 158BE of the Income Tax Act, 1961, the relevant date is the date on which the last panchnama is drawn evidencing the conclusion of the search, and not the date of issuance of the last search authorisation. The Court observed that where multiple search authorisations are issued and executed, the assessment proceedings are based on the entire material collected during the search operations and culminate only upon the conclusion of the search as recorded in the final panchnama. Interpreting Explanation 2 to Section 158BE, the Court clarified that the execution of authorisation in cases of search is deemed to occur on the date of conclusion of the search as reflected in the last panchnama, thereby making such date the starting point for computing the statutory limitation period. The Supreme Court relied upon its earlier decision in VLS Finance Ltd. v. Commissioner of Income Tax and affirmed the view taken by the High Court that accepting the assessee’s contention would render Explanation 2 otiose. Accordingly, it was held that the block assessments completed within two years from the date of the last panchnama were within limitation, and the appeals filed by the assessees were dismissed.

SOURCE LINK

https://api.sci.gov.in/supremecourt/2010/40273/40273_2010_4_1507_43078_Judgement_24-Mar-2023.pdf

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