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Issues: Challenge of retention of account books beyond 180 days under section 132(8) of the Income-tax Act, 1961.
Analysis: The petitioner, a partnership firm, challenged the retention of account books and documents beyond 180 days by the income-tax authorities following a search on their premises. The petitioner alleged non-compliance with section 132(8) of the Income-tax Act, 1961. Despite multiple extensions granted to file a rejoinder affidavit, the petitioner failed to do so, citing reasons like curfew, which were deemed insufficient by the court. The court noted the need for the seized documents for assessment proceedings and the lack of prejudice shown by the petitioner due to the retention. The presumption of compliance with the statutory period and the petitioner's access to inspect the account books were considered. The court found no justification for returning the documents, especially with assessment proceedings stayed. The petitioner argued a delay in finalizing assessment proceedings from the seizure date to the stay order date, but the court found reasons provided in the counter-affidavit for the delay acceptable. The Income-tax Department offered to return the documents post-assessment finalization, but the petitioner declined to vacate the interim order. The court emphasized the necessity of the account books as evidence for assessment finalization and rejected the petitioner's claim of inability to substantiate without them. A technical objection regarding alternative remedies under section 132(10) was raised by the Income-tax Department, but the court refrained from expressing an opinion, deeming the case unfit for interference under Article 226 of the Constitution. In conclusion, the court dismissed the writ petition, vacated the interim order staying assessment proceedings, and upheld the retention of the account books by the income-tax authorities for the ongoing assessment process.
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