1974 (9) TMI 1 - SC - Income Tax

Time limits prescribed under s. 132(5) are for the benefit of the aggrieved assessees - Orders made in pursuance of a direction under s. 132(12) or by a court in writ proceedings was not subject to the limitations laid down in s. 132(5) - power given to IT Officer u/s 132(5) to pass order within 90 days could not be whittled down by a Rule 112A - appeal is, therefore, allowed and the judgment and order of the High Court set aside

Issues Involved:
1. Validity of the Income-tax Officer's order dated June 5, 1972.
2. Jurisdiction of the Income-tax Officer to pass the order beyond the prescribed period under section 132(5) of the Income-tax Act, 1961.
3. Legality of the attachment and retention of the silver bars.
4. Waiver of the period of limitation prescribed under section 132(5).
5. Authority of the High Court to order the return of the silver bars.

Detailed Analysis:

1. Validity of the Income-tax Officer's Order Dated June 5, 1972:
The Income-tax Officer conducted a fresh enquiry and passed an order on June 5, 1972, holding that the silver bars belonged to Pooran Mal individually and not to the first respondent-firm. The respondents challenged this order, arguing that the silver bars were the property of the firm and not Pooran Mal individually. The High Court set aside the order, but the Supreme Court found that the fresh order was valid and within the jurisdiction of the Income-tax Officer as it was made pursuant to the High Court's direction in Writ Petition No. 82 of 1972.

2. Jurisdiction of the Income-tax Officer to Pass the Order Beyond the Prescribed Period Under Section 132(5):
The Supreme Court held that even if the period of time fixed under section 132(5) is considered mandatory, it was satisfied when the first order was made. Any subsequent order directed under section 132(12) or by a court in writ proceedings is not subject to the limitations prescribed under section 132(5). The court emphasized that the statutory period is intended for the benefit of the person whose property has been seized, and it is competent for the person to waive this benefit.

3. Legality of the Attachment and Retention of the Silver Bars:
The silver bars were attached under the provisions of sub-section (3) of section 132 of the Income-tax Act, 1961. The Supreme Court noted that only properties seized under section 132(1) could be ordered to be released, not those attached under section 132(3). Therefore, the High Court's order for the return of the silver bars was deemed illegal.

4. Waiver of the Period of Limitation Prescribed Under Section 132(5):
The Supreme Court held that the period of limitation prescribed by section 132(5) is intended for the benefit of the person whose property has been seized, and it is competent for that person to waive it. The respondents had, in fact, waived this period by agreeing to a fresh disposal of the case by the Income-tax Officer, as recorded in the consent order of the High Court in Writ Petition No. 82 of 1972.

5. Authority of the High Court to Order the Return of the Silver Bars:
The Supreme Court found that the High Court was not competent to order the return of the 114 silver bars to the first respondent-firm without going into the correctness of the Income-tax Officer's fresh order. The High Court should have examined whether the silver bars belonged to Pooran Mal individually or to the firm before making such an order.

Conclusion:
The Supreme Court allowed the appeal, set aside the judgment and order of the High Court, and directed the High Court to address the other contentions raised in the writ petition. The Court emphasized that the fresh order by the Income-tax Officer was valid and within jurisdiction, and the period of limitation under section 132(5) could be waived by the respondents. The High Court's order for the return of the silver bars was deemed improper without a thorough examination of the ownership issue.

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