2013 (10) TMI 81 - HC - Income Tax

Authorization of retention of seizure of the books of account, laptop and CDs etc. u/s 133A (3) (ia) Held that - As per Section 2 (12A) of the Income Tax Act the documents include data in any electronic form and data search device. The Income Tax authorities can retain these electronic devices found at the time of search for the purpose of investigation - Petitioner has not made out any good case for quashing the authorisation for survey and for seizure of the books of account, laptop and CDs, for which the authorisation for retention has been given by the Commissioner of Income Tax under Section 133A (3) (ia) for a period upto 31.12.2013 Decided against the Assessee.

Summary

Issues:
Challenge to survey and seizure of documents, laptops, and CDs under Section 133A of the Income Tax Act, 1961.

Analysis:
The petitioner, a Private Limited Company, filed a writ petition challenging a survey conducted by the Assistant Commissioner of Income Tax and seeking the return of impounded articles, CDs, and laptops. The petitioner argued that the authorization was issued in the name of an individual, not the company, and no reasons were recorded for retaining the seized items beyond 10 days without approval from higher authorities. The company contended that the survey and seizure were illegal and void.

In response, the Income Tax department stated that the survey was conducted based on an authorization issued in the name of a director of the company, who was also acting as a director in the company. The department justified the impounding of documents, laptops, and CDs under Section 133A (3) (ia) of the Act, citing incomplete and irregularly maintained books of account as the reason for seizure. The department also highlighted that electronic data storage devices fall within the definition of "books of account" under the Act.

Further, the department revealed that during the survey, documents, laptops, and a CD were seized, with the company requesting their release. An authorization was provided by the Commissioner of Income Tax to retain the impounded items until a specified date. The department emphasized that no objection was raised by the company's director during the search regarding the retention of the seized items.

The court noted that the petitioner failed to establish a strong case for quashing the authorization for the survey and the retention of the seized items. It was observed that the company did not claim ownership of the laptops and CDs seized during the survey. Additionally, the court referenced Section 2 (12A) of the Income Tax Act, which allows authorities to retain electronic devices for investigation purposes. Consequently, the writ petition was dismissed, upholding the authorization for seizure and retention until the specified date.

In conclusion, the judgment addressed the legality of the survey and seizure conducted under Section 133A of the Income Tax Act, emphasizing the importance of proper authorization and justification for impounding items during such proceedings. The court's decision to dismiss the writ petition underscored the need for compliance with statutory provisions and established procedures in matters concerning tax investigations and seizures.