2009 (8) TMI 233 - HC - Income Tax

In this petition filed under article 226 of the Constitution the petitioner has sought issuance of direction to the respondents to release the share certificates of the petitioner illegally retained as a result of search and seizure operation of the house of the petitioner on November 20 1997 being contrary to the provisions of section 132B - short affidavit filed by the Commissioner of Income-tax-1 Chandigarh now states that the retention of documents have been reconsidered and the same have been released. The documents have been personally handed over by the Assessing Officer on August 24 2009 - petition has been rendered infructuous.

Summary

Issues:
1. Petition seeking direction to release illegally retained share certificates.
2. Justification for retention of documents under section 132(8) of the Income Tax Act.
3. Change of stand by the Commissioner leading to release of documents.
4. Judicial scrutiny of the impugned order.
5. Unconditional apology tendered by the Commissioner.
6. Displeasure expressed by the court on the functioning of the Commissioner.
7. Disposal of the writ petition as infructuous.

Analysis:

1. The petitioner filed a petition under Article 226 of the Constitution seeking a direction to release share certificates illegally retained after a search and seizure operation. The petitioner's counsel informed the court that the documents had been released and handed over by the Assessing Officer, rendering the petition infructuous.

2. The Commissioner of Income Tax had initially justified the retention of documents under section 132(8) of the Income Tax Act. However, a change in stance occurred following a reconsideration prompted by a legal precedent cited by the petitioner's counsel. The court noted that the impugned order would not have withstood judicial scrutiny.

3. The Commissioner's change of stand, as reflected in an affidavit, led to the release of the documents. The court refrained from making adverse comments due to the unconditional apology tendered by the Commissioner. However, the court expressed displeasure at the casual approach in filing the initial affidavit and emphasized the need for improved performance of duty by the Commissioner.

4. Despite refraining from adverse comments, the court highlighted the need for a holistic change in the Commissioner's duty performance. It was made clear that any future lapses in duty by the Commissioner could result in serious consequences, as the court would not hesitate to take a serious view.

5. Consequently, the writ petition was disposed of as infructuous, with a directive for the Computer Branch of the Registry to record the order. This was intended to serve as a reference in case of any future instances of duty-related lapses by the Commissioner, ensuring the observations made by the court were duly implemented.