2012 (7) TMI 1023 - HC - Income Tax

Applicability of the provisions of Section 133A -Held that - The petitioner has challenged the proceedings dated 12.7.2012 to 13.7.2012 conducted under Section 133A of the Income Tax Act. As and when any report is prepared and used against the petitioner on the basis of the said survey, it would be open to the petitioner to raise all such grounds which are permissible in law before the appropriate forum. The concerned authority will decide such an objection independently without being influenced by the tentative opinion expressed by us in this order.

Summary

Issues: Challenge to proceedings under Section 133A of the Income Tax Act regarding survey and seizure conducted on mining lease premises.

Analysis:
The petitioner, a partnership firm holding a mining lease for Manganese ore extraction, challenged the survey conducted under Section 133A of the Income Tax Act, following search and seizure operations on their business premises. The petitioner argued that the presence of individuals not empowered under Section 133A during the survey rendered the proceedings invalid. Additionally, they contended that volumetric measurement, which is not permissible under Section 133A, was conducted. The petitioner also invoked the Mines and Minerals (Development and Regulation) Act, stating that the Income Tax Act should not apply to mining operations, suggesting that information should have been obtained from mining authorities instead. Reference was made to a judgment by the Orissa High Court in a similar matter.

The respondent, representing the Income Tax Department, raised a preliminary objection, stating that the petition was premature as it was filed before any report was prepared or used against the petitioner. It was argued that the survey was conducted in accordance with Section 133A to determine the petitioner's actual income through volumetric measurement. The respondent emphasized that the Income Tax Act and the Mines and Minerals Act operate in distinct fields, and the powers exercised under Section 133A do not conflict with the MMDR Act.

After hearing both parties, the court found no jurisdictional issue prejudicing the petitioner's rights at that stage. The court opined that the presence of individuals not specified under Section 133A during the survey did not invalidate the proceedings if they were assisting the specified income tax authority. The court also justified the use of volumetric measurement to ascertain stock positions. It was concluded that the Income Tax Act's provisions under Section 133A could be applied in a business place like a mine, despite the existence of the MMDR Act. The court dismissed the writ petition, stating that no grounds for interference were established at that stage, allowing the petitioner to challenge any future reports independently.