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TMI Blog2016 (12) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... that this is not the appropriate stage to entertain the writ petition for the reasons discussed herein above. Accordingly the writ petition is dismissed, however reserving liberty to the petitioners that if they chose to avail the alternative remedy of appeal, they may avail the same by raising all points which are available to them and in that situation the authority concerned will take decision in accordance with law. - W. P. (C) No. 20421 of 2016 - - - Dated:- 7-12-2016 - Sanju Panda And Sujit Narayan Prasad, JJ. For the Petitioners : M/s. R. P. Kar, A. N. Ray and S. Das. For the Opp. Parties : Mr. Sanjaya Kumar Acharya, Sr. Standing Cousel for Income Tax Department. ORDER S. N. Prasad, J. The notice issued U/s.153-A for the assessment years 2009-10 to 2014-15 of Income Tax Act, 1961 dtd.30.09.2016 is under challenge in this writ petition. 2. The facts leading to institution of this writ petition is that the petitioner no.1 is a company incorporated under the Companies Act, 1956 having its place of business as well as Registered office at Paradip and the petitioner no.2 to 3 are the Directors of petitioner no.1. The petitioner company is dealin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities concerned by giving proper reply in terms of the said notice, but instead of doing so, they have invoked the extraordinary jurisdiction conferred to this court under Article 226 and 227 of the Constitution of India and as such the same is not fit to be entertained at this stage. He further submits that there are alternative remedies of appeal provided under the statute. In reply, learned counsel for the petitioners has submitted that at this stage this court has got power to entertain this writ petition since the very authority of the action of the concerned authority is under challenge who has issued notice U/s.153-A of the Income Tax which is the result of search and seizure operation conducted U/s.132 of the I.T. Act, 1961, but the reasons which led the authority to conduct search and seizure cannot be looked into by the appellate forum and as such this writ petition has been filed, hence it can be entertained even at this stage by this Court sitting under Articles 226 and 227 of the Constitution of India. 4. We have heard the learned counsels for the parties and gone through the materials available on record. Before appreciating the argument advanced on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-] (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; (iia) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing; (iib) require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided also that nothing contained in the second proviso shall apply in case of any valuable article or thing, being stock-in-trade of the business: Provided also that no authorisation shall be issued by the Additional Director or Additional Commissioner or Joint Director or Joint Commissioner on or after the 1st day of October, 2009 unless he has been empowered by the Board to do so. [(1A) Where any [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, in consequence of information in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the [Principal Director General or] Director General or [Principal Director or] Director or any other [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true ; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (5) [***] (6) [***] (7) [***] (8) The books of account or other documents seized under subsection (1) or sub-section (1A) shall not be retained by the authorised officer for a period exceeding thirty days from the date of the order of assessment un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or] Director General or [Principal Director or] Director under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents and the Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit. (11) [***] (11A) [***] (12) [***] [(13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under sub-section (1) or sub-section (1A).] (14) The Board may make rules in relation to any search or seizure under this section ; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer- (i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available ; (ii) for ensuring safe custody of any books of account or other documents or assets seized. Explanation 1.-For the purposes of sub-section (9A), execution of an author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x authorities require the power furnished by clause (b) for the very reason that they do not know what the relevant books of account and documents are, and are afraid that they will be concealed or suppressed. The power of seizure under section 132 shall be exercised in accordance with sub-rules (2) to (14). Sub-rule (2) provides that the commissioner must first of all record his reason for issuing a warrant of authority. It then provides as to what should be the form of such warrant and the commissioner after going through the relevant records will reduce the reasons in writing for the future exercise and as such under the law, it is the Commissioner or the competent authority who must have reason to believe that the assessee would not produce certain books of account or document is called upon to do so, and it is he who must be of the opinion that they are relevant for the purpose of any income tax proceeding, under these underlying principles the power conferred U/s.132 is to be exercised by the competent authority. 5. Section 131(1A) reads as forllows:- 131. (1A) If the [Principal Director General or] Director General or [Principal Director or] Director or Joint Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on of such business or profession- (i) to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place, (ii) to afford him the necessary facility to check or verify the cash, stock or other valuable article or thing which may be found therein, and (iii) to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act. Explanation.-For the purposes of this sub-section, a place where a business or profession is carried on shall also include any other place, whether any business or profession is carried on therein or not, in which the person carrying on the business or profession states that any of his books of account or other documents or any part of his cash or stock or other valuable article or thing relating to his business or profession are or is kept. (2) An income-tax authority may enter any place of business or profession referred to in sub-section (1) only during the hours at which such place is open for the conduct of business or profession and, in the case of any other place, only after sunr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an income-tax authority acting under sub-section (2A).] (4) An income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein he has entered, any cash, stock or other valuable article or thing. (5) Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the income-tax authority is of the opinion that it is necessary or expedient so to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who, in the opinion of the income-tax authority, is likely to possess information as respects the expenditure incurred, to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act and may have the statements of the assessee or any other person recorded and any statement so recorded may thereafter be used in evidence in any proceeding under this Act. (6) If a person under this section is required to afford facility to the income-tax authority to inspect books of account or other doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: Provided also that the Central Government may by rules made by it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onducted or requisition is made. This provision confers power for making assessment after the search and seizure as contemplated under the provision of sec.132 and sec.133-A in order to reassess the income due to suppression or concealment of the documents of the undisclosed income. These statutory provisions have been taken note by the Hon ble Supreme Court as well as by various High Courts dealing with the power of search and seizure. The Hon ble Apex Court while discussing the issue in the case of Pooran Mal Vrs. Director of Inspector, reported in 1974 93 ITR 505 SC has been pleased to hold the constitutional validity of Sec.132 and it has been laid down that the necessity of recording of reasons in support of the reasonable belief contemplated by Sec.132, however, the principle has been laid down that the reason which led the authorities to conduct search and seizure need not to be disclosed or communicated to the person against whom the warrant of authorization has been issued. The same view has been reiterated in the case of Dr. Pratap Singh Vrs. Director of Enforcement, reported in 1985(155) ITR 166 (SC). We, after going through the statutory provisions as well as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h there is provision of Sec.147 of I.T. Act which deals with the provision for making assessment of escaped assessment. 8. From the case in hand, as we have gathered from the notice impugned dtd.30.9.16, that a search and seizure operation U/s.132 of the Act, 1961 had been conducted on 11.9.14 and subsequent dates in the residential as well as business premises of the petitioner company. The survey operations U/s.133-A were also carried out at various places of Kolkata and Paradip. The authorities have invoked this provision after the assignment of jurisdiction to the circle in question U/s.127 of the Act, 1961. We have further gathered that the authorities have issued a notice U/s.143(2) and 142(1) of the Income Tax Act. Section 143(2) contains a provision that where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income tax authority, as the case may be, if considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch he has reason to believe that any person to whom summons under sub-section (1) of section 37 of the Indian Income Tax Act, 1922, or under sub-section (1) of sub-section 131 of the Act, 1961, or a notice under sub-section (4) of Section 22 of the Indian Income Tax Act, 1922, or under subsection (1) of Section 142 of the Act, 1961 was issued to produce or cause to be produced, any books of accounts or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required by such summons or notice or any person to whom a summon or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income Tax Act, 1922 or Income Tax Act, 1961, or any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property for the purpose of the Indian Income Tax Act, 1922, or the Act, 1961, the authorities can initiate proceeding U/s.132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we found from the pleading that no such allegation has been leveled against the Assessing authority that they are proceeding with ulterior motive. The petitioner has taken a ground that before resorting to the provision of Section 132 of the Act, 1961, a notice ought to have been issued U/s.131(1A) of the Income Tax Act, 1961, but from the bare reading of the said provision it is not required under the provision of Section 131(1A) that before proceeding with the provision of Section 132 a notice is required to be given to the assessee and it cannot be because the provision of section 132 provides power of search and seizure and if the notice would be given, then the whole purpose of conducting search and seizure will vanish, as because the assessee after knowing the fact that a notice for initiating proceeding U/s.132 has been given, he will destroy all the documents making the proceeding a futile exercise. The learned counsel for the petitioner at last argued that the appeal lie before the authority, who is lower in hierarchy than those taken decision to resort to the provision of Section 132 of the Act and as such, the assessee will be prejudiced but we are of the consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LE 291. We, also after taking into consideration the factual aspect of the matter, are of the considered view that the matter pertains to factual determination of the issue and as such this Court cannot assume the power of appellate court, moreover, it is not that there is no other efficacious alternative remedy available to the petitioner assessee, ground on which the jurisdiction of this Court under Article 226 of the Constitution of India is to be invoked, taking into consideration the fact that there is availability of alternative remedy of appeal, we thought it proper not to interfere with the issue since only notice U/s.153-A has been issued to the petitioner with a direction to satisfy the authority, moreover, the search and seizure was conducted on 11.09.2014, well within the knowledge of the petitioner assessee, but he has not challenged the authority of the jurisdiction under the Act fairly for a period of more than two years and it is only after the notice U/s.153-A of the Act, 1961 issued, this writ petition has been filed. Hence we are of the considered view that this is not the appropriate stage to entertain the writ petition for the reasons discussed herein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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