1973 (4) TMI 17 - HC - Income Tax

Whether an order u/s 132(8) should be communicated to the assessee and should be made within 180 days from the date of seizure - Whether the time can be extended at the instance of the officer to whom documents, etc. are handed over and whether information obtained during seizure can be obtained by other authorities under their own powers - petitioner has challenged the retention of the documents beyond the period of 180 days specified in section 132(8) - Petition dismissed.

Issues Involved:
1. Retention of documents beyond the statutory period of 180 days.
2. Extension of time without notice to the petitioner.
3. Sending of information to other authorities.
4. Validity of the retention order without being communicated to the petitioner.
5. Authority of the officer to seek an extension.

Detailed Analysis:

1. Retention of Documents Beyond the Statutory Period of 180 Days:
The petitioner challenged the retention of documents seized from No. 1, Raj Narain Road, beyond the statutory period of 180 days specified in section 132(8) of the Income-tax Act, 1961. The court noted that the Commissioner of Income-tax had granted an extension for the documents seized from the Kashmeri Gate premises, which was conveyed to the petitioner by a letter dated 1st April, 1972. The court held that the extension of time was valid as it was granted within the statutory period and there was no requirement under section 132(8) for the Commissioner to hear the petitioner before granting the extension.

2. Extension of Time Without Notice to the Petitioner:
The petitioner argued that the extension of time for retaining documents was granted without notice to him, which was contrary to natural justice. The court clarified that section 132(8) does not require the Commissioner to hear the petitioner before extending the period. The petitioner had the right to move the Central Board of Direct Taxes under section 132(10) if aggrieved by the extension, where he would be heard.

3. Sending of Information to Other Authorities:
The petitioner contended that the information from the seized documents was sent to the Central Bureau of Investigation, the sales tax department, and the Municipal Corporation of Delhi in violation of section 138 of the Income-tax Act, 1961. The court found no material evidence to support this claim and noted that section 138 allows the Board or other income-tax authorities to furnish information to other authorities under certain conditions. The court concluded that there was no infringement of section 138 as the other authorities could obtain information under their own powers.

4. Validity of the Retention Order Without Being Communicated to the Petitioner:
The petitioner argued that the extension order must be communicated to him within the 180-day period to be valid. The court disagreed, stating that the statute does not require the extension order to be communicated within that period. The court emphasized that while the order should be communicated to enable the petitioner to challenge it before the Board, the retention of documents remains valid even if the order is not communicated within the 180 days.

5. Authority of the Officer to Seek an Extension:
The petitioner questioned whether the Income-tax Officer, Shri Jeevan Lal, who sought the extension, was the authorized officer to do so. The court interpreted the term "authorized officer" in section 132(8) to include any officer to whom the books of account or documents are handed over by the initially authorized officer. This interpretation ensures that the restriction on retention applies to all officers handling the documents, thus validating the extension obtained by Shri Jeevan Lal.

Conclusion:
The court dismissed the writ petition, holding that the retention of documents beyond 180 days was valid as the extension was granted within the statutory period. The court also clarified that the extension order need not be communicated within the 180 days, although the petitioner has the right to be informed to challenge the extension. The court found no violation of section 138 regarding the sharing of information with other authorities and concluded that the authorized officer includes any officer handling the documents after the initial seizure. The petitioner's failure to properly mark annexures contributed to the confusion, but the court ultimately upheld the validity of the retention orders and extensions.

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