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TMI Blog1983 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... udge(s) : D. P. MADAN., V. BALAKRISHNA ERADI., V. D. TULZAPURKAR. JUDGMENT The judgment of the court was delivered by TULZAPURKAR J.- All these appeals, at the instance of the Commissioner of Income-tax, raise a common question whether the Revenue is under a statutory obligation to communicate to the person (from whose custody books of account and documents have been seized under s. 132(1) of the I.T. Act, 1961), the approval obtained from the Commissioner of Income-tax and the recorded reasons of the Authorised Officer/Income-tax Officer on which such approval is based for the retention of the seized books of account and documents by the Department for a period exceeding 180 days from the date of seizure under s. 132(8) of the I.T. Act, 1961. Since in all these appeals the facts giving rise to the aforesaid question are almost similar, it will suffice to indicate briefly the facts obtaining in M/s. Oriental Rubber Works' case (Civil Appeal No. 1652 of 1973). Under a proper authorisation issued in that behalf under s. 132(1) of the Act, on 17th February, 1965, a search was conducted by the I.T. Dept. in the factory premises at Kantalia as well as the offices and godown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, that there was no obligation under s. 132(8) of the Act to communicate the Commissioner's approval for such extended retention or the recorded reasons of the Income-tax Officer therefor to the respondent-assessee and that in any event due inspection of the seized books and documents was afforded to the respondent-assessee who was also permitted to take copies of the entries in the books and after giving proper hearing to the respondent-assessee the assessment for the year 1964-65 had been validly completed on 5th February, 1969, long before the respondent-assessee approached the court and obtained a rule nisi. A learned single judge of the High Court held that the seized books of account and other documents could not be retained beyond the period of 180 days without a complete and effective order of approval for such extended retention of the said books and documents and that since the approval of the Commissioner and the recorded reasons therefor had not been communicated to the respondent-assessee, the retention of the books and documents beyond 180 days was unlawful. The learned judge, therefore, ordered the issuance of a mandamus directing the Commissioner and the concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based was unlawful or illegal. Secondly, the counsel contended that in any event since proper opportunity to inspect the seized books and documents and to make copies of the entries was given to the respondent assessee and since after issuing proper notices and giving hearing to the respondent-assessee, the assessment for the assessment year 1964-65 had been completed long before the issuance of the rule nisi, the same ought to have been upheld as binding on the respondent-assessee. In other words, according to the counsel for the Revenue, the unauthorised retention of the seized books and documents beyond 180 days, if any, could not render the assessment for the year 1964-65, properly made, invalid. Counsel further pointed out that the respondent-assessee had even preferred appeals to higher authorities challenging the said assessment on merits. It may be stated that counsel for the respondent-assessee in this appeal conceded that in all the circumstances of the case the assessment already made on 5th February, 1969, should be allowed to stand subject of course to the result of the appeals that have been preferred by the respondent assessee against it. In this view of the matter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval of the Commissioner for such retention is obtained. In other words, two conditions must be fulfilled before such extended retention becomes permissible in law ; (a) reasons in writing must be recorded by the authorised officer or the concerned ITO seeking the Commissioner's approval, and (b) obtaining of the Commissioner's approval for such extended retention and if either of these conditions is not fulfilled such extended retention will become unlawful and the concerned person (i.e., the person from whose custody such books or documents have been seized or the person to whom those belong) acquires a right to the return of the same forthwith. It is true that sub-s. (8) does not in terms provide that the Commissioner's approval or the recorded reasons on which it might be based should be communicated to the concerned person but in our view since the person concerned is bound to be materially prejudiced in the enforcement of his right to have such books and documents returned to him by being kept ignorant about the factum of fulfilment of either of the conditions, it is obligatory upon the Revenue to communicate the Commissioner's approval as also the recorded reasons to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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