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TMI Blog1973 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... na Motor Market, Kashmeri Gate, Delhi. On 8th October, 1971, searches were carried out at both these premises by the income-tax authorities under authorisations issued under section 132 of the Income-tax Act, 1961. In respect of the premises at No. 1, Raj Narain Road, the authorised officer was Shri D. N. S. Sinha, Income-tax Officer, District VIII. In the presence of witnesses, a panchnama was prepared and certain books of accounts and other documents were seized. Two lists described as lists " A " and " B " were prepared. Of these, list " A " consists of books of accounts and other documents which were taken possession of by the authorised officer, and list " B " consists of books of accounts and documents which were handed over to the petitioner in the presence of witnesses, which he was asked to keep in safe custody and produce before the authorities as and when required. The documents in list " A " were also signed by the petitioner and the witnesses as well as the authorised officer at places mentioned in the list. The search at the premises of M/s. Ganeriwala Trading Company at No. 1/2784, Lothian Road, Kashmeri Gate, Delhi, was conducted at 5-15 p.m. on the same date. Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " B " filed along with the petition is the Panchnama which relates to No. 1, Raj Narain Road. This has led to some confusion in the affidavits filed in reply to the petition. The petitioner has challenged the actions of the authorities on several grounds. It is submitted that the documents seized from No. 1, Raj Narain Road, are being retained without any extension beyond the statutory period of 180 days. It is also urged that, as far as the documents seized from the premises in Kashmeri Gate are concerned, extension of time has been granted without notice to the petitioner which is contrary to natural justice. The action of the authorities in retaining the documents is challenged on the ground that it is mala fide particularly, the petitioner challenges the sending of information to the Central Bureau of Investigation, the sales tax department and the Municipal Corporation of Delhi. These are in substance the allegations in the writ petition. The petitioner has sought a writ in the nature of certiorari to quash the order extending the period for retaining the documents and also for a declaration that the information given by the respondents to the sales tax department and other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 132(8) of the Act for the Commissioner to hear before he extends the period. If the petitioner was aggrieved by this extension, he had the right to move the Central Board of Direct Taxes under section 132(10) of the Act. If such an application had been moved, the Board was bound to hear the petitioner. Thus, this extension of time cannot be declared to be invalid. As far as the retention of the documents seized from No. 1, Raj Narain Road, is concerned, there seems to have been considerable confusion as to the contents of the order extending the period. In the affidavit of Shri Tejinder Singh in reply to the show cause notice, it was stated that the extension was granted as per the letter as annexed annexure " F " to the petition. It so happens that there is no annexure " F " to the petition, and it appears that the deponent must have meant annexure " E ". That document does not relate to No. 1, Raj Narain Road, at all. However, the document does mention annexures " A " and " B " and the petitioner has marked the panchnaama relating to the seizure at No. 1, Raj Narain Road, as annexure " B ". Apparently, this confusion led the department to believe that annexure " E " cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his mistake appears to be that the petitioner did not mark the annexures " A " and " B " in the panchnama relating to the Kashmeri Gate premises as annexures " A " and " B ", but instead marked the panchnama relating to No. 1, Raj Narain Road, as annexure " B " in his petition. We are only concerned with the existence of the order extending the period. Once the existence of that order is established, the retention must be treated to be valid. There is a strong submission by the counsel for the petitioner that the order of the Commissioner has been fabricated. This, however, does not seem to be correct, because there are several notings on the file which show that this order has also been conveyed to the other authorities. Unfortunately, this order was not communicated to the petitioner and this forms another part of the petitioner's challenge to the further retention of the documents. The petitioner's case is that the extension of time under section 132(8) of the Act has to be granted after hearing him, and also that the order of extension had to be conveyed within the period of 180 days mentioned in that sub-section. That sub-section states : " The books of account or other docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax . The former judgment is based on the latter judgment, where it was held that the approval had to be given by the Commissioner and the order communicated to the person from whom the books or documents were seized. In fact, in Mahabir Prosad's case the position was that the order extending the period beyond 180 days was not communicated to the petitioner in that case. The court concluded that no order could be effective till it had been communicated and, as there had been no communication, the order was ineffective. In fact, the position is exactly the same in the present case. Hence, the only question to be considered is whether the order which was passed was ineffective, on the ground that it was not communicated to the petitioner. The Calcutta High Court did not hold that the order was to be communicated within 180 days. In the subsequent case, i.e., C. K. Wadha's, it was also held that an order extending the period of retention was invalid unless communicated. Now, we have to consider whether the communication of the order is an essential condition for its validity under section 132(8) of the Act. The statute itself is quite silent as to whether the extension has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to make a search and retain the articles seized for a period of 180 days. The effect of an extension under section 132(8) is merely to renew and keep alive that autlhorisation for a further period. It is, therefore, not an essential condition for the application of section 132(8) that the extension of time should conveyed to the person whose books of account and other documents have been seized. It is equally apparent that the order has got to be conveyed to that person in order to enable him to take effective steps to challenge the same by an application to the Board as contemplated by sub-section (10) of section 132. This means that the petitioner had the right to get the information that the period of extension has been extended and is also a copy of the reasons. This is not the same as saying that the extension of the period of retention is ineffective unless it is communicated. It is the right of the petitioner to get a copy of the reasons as well as the approval, so that he can agitate the matter further before the Board. The right of the authorised officer to retain the books of account and documents is not, however, dependent on the petitioner getting that order or info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no averment in the petition that the petitioner asked for a copy of the order of extension, which was not complied with. It is noteworthy that the allahabad High Court in Seth Brotherss v. commissioner of Income-tax took the view that the order approving the retention could be passed even after 180 days and would be valid. That was a case of seizure made before the present section 132(8) was introduced and to which that provision became operative by amendment of law. That case must be confined, as far as the date of the order is concerned, to its peculiar facts. In our view, the order under section 132(8) has to be passed within the period of 180 days to be valid. It is obvious from the facts of the present case that because of the writ petition in the Supreme Court by the petitioner and the stay order passed therein that the income-tax authorities have not been able to utilise the books of account and other documents seized to complete the petitioner's assessment. This has resulted in the extension of time. That extension is merely the consequence of the order restraining the department from utilising the books of accounts and documents seized. This is a factor which has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion in any court of law. (2) Notwithstanding anything contained in sub-section (1) or any other law for the time being in force, the Central Government may, having regard to the practices and usages customary or any other relevant factors, by order notified in the Official Gazette, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authority as may be specified in the order. " The section clearly contemplates the giving of information by the Board or other income-tax authorities including the Commissioner to others in certain circumstances and on the fulfilment of certain conditions. As it is not at all clear as to how the information has been passed, it is not possible to accept the petitioner's contention that there has been an infringement of the section. In any case, section 138 deals with the voluntary passing of information under this Act. It does not relate at all to the powers of other authorities to get information under their own powers. For example, the Central Bureau of Investigation is entitled to take out a search warrant, and the sales tax autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and officers outside the provisions of the section. As far as the information already given is concerned, we have no power to give any direction concerning the same. As far as the future is concerned, we can only point out that information has to be given in accordance with section 138 of the Act if voluntarily given. This restriction does not apply if the information is obtained by other authorities themselves under powers granted to them under some other law. The above conclusions are sufficient to dispose of this petition, but certain submissions have been made concerning facts which have arisen even after the petition was filed. Both the extensions of time referred to above have expired. The extension in respect of the books of account seized from the Kashmeri Gate premises expired on 5th October, 1972, and in respect of No. 1, Raj Narain Road, the extension expired on 3rd September, 1972. In the last affidavit of Shri Tejinder Singh, dated 16th April, 1973, it was shown that there was a further extension sought from the Commissioner of Income-tax in respect of both lots of books and documents. These extensions were granted by P. L. Malhotra, Commissioner of Income-tax, Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the officer authorised to make the search, unless he derives jurisdiction under section 130A of the Income-tax Act, 1961. Every assessee has a specific Income-tax Officer who has jurisdiction over that assessee. That officer in the case of the petitioner is obviously Shri Jeevan Lal, to whom the case had been transferred by the Board. The use of the words " authorised officer " in the provisions of section 132 first occur in sub-section (1). That provision states that the search may be carried out by a person authorised to do so, who may be a Deputy Director of Inspection, an Inspecting Assistant Commissioner, an Assistant Director of Inspection or an Income-tax Officer. Once the search has been carried out the authorised officer has certain powers but the section does not enable that authorised officer to do anything with the books of account and other documents seized, nor can he complete the assessment. It, therefore, follows that once the search has been made, then the section can only be validly and effectively acted upon, if the books and other documents are handed over to the Income-tax Officer having jurisdiction to deal with the assessee. That Income-tax Officer is speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of the provision. Hence, he must also be treated as the authorised officer as far as the petitioner is concerned, as soon as the books of account and other documents were handed over to him. This would mean that the restriction appearing in section 132(8) regarding the retention of the books of account and other documents would also apply to Shri Jeevan Lal, who would also have to return the books and documents if he did not obtain extension of time. It would clearly follow that he, Shri Jeevan Lal, would be the authorised officer also for the purpose of obtaining a further extension of time. It would follow that the extension of time granted by Shri P. L. Malhotra, Commissioner of Income-tax, up to 30th June, 1973, would be valid although it was obtained, apparently, on the application of the Income-tax Officer having jurisdiction over the petitioner and not the officer who had originally conducted the search. It may be pointed out that there may be cases in which the initially authorised officer may be transferred, or may leave the service, or retire, or otherwise become incompetent to deal with the books of account and other documents seized. The section contains a lac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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