1985 (12) TMI 14 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Assistant Director of Inspection (ADI) u/s 132(1)(c) of the Income-tax Act, 1961.
2. Legality of retention of seized documents beyond 180 days u/s 132(8).
3. Authority of the Commissioner to extend the period of detention of documents.

Summary:

Jurisdiction of the Assistant Director of Inspection (ADI) u/s 132(1)(c):
The petitioner, a firm of income-tax practitioners, contended that the ADI, who conducted a search and seizure operation, did not have jurisdiction over the firm u/s 124 of the Act. The ADI should have handed over the seized documents to the Income-tax Officer (ITO) having jurisdiction within 15 days as mandated by sub-section (9A) of section 132. The court held that the ADI, not being an ITO with jurisdiction over the petitioner, was required to transfer the seized documents to the ITO within the stipulated period.

Legality of Retention of Seized Documents Beyond 180 Days u/s 132(8):
The court examined sub-sections (5), (8), and (9A) of section 132, emphasizing that the authorized officer must hand over seized documents to the ITO with jurisdiction within 15 days. The ITO then has 120 days to make an order u/s 132(5). The court found that the ADI's retention of documents beyond 15 days was illegal, as he did not have the jurisdiction to retain them for 180 days or seek an extension.

Authority of the Commissioner to Extend the Period of Detention of Documents:
The Commissioner extended the retention period of the documents up to December 31, 1985, based on the ADI's request. The court ruled that since the ADI did not have jurisdiction to retain the documents, the Commissioner's order extending the retention period was without jurisdiction and thus invalid. The procedural safeguards in section 132 were not complied with, rendering the retention and extension orders void.

Conclusion:
The court allowed the writ petition, setting aside the impugned order of the Commissioner extending the retention period. The petitioner was entitled to the return of the seized documents and costs of Rs. 500. The related writ appeal was rendered unnecessary due to the order in the writ petition.