9911796707
TMI Blog1973 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee under the Income-tax and Wealth-tax Acts. The assessments under these Acts have been completed (according to the petition) up to the assessment year 1970-71. On 10th March, 1970, the family purchased No. 1, Raj Narain Road, Civil Lines, Delhi, and informed the department of the purchase. These premises are now apparently the residence of the petitioner and his family. The business premises are situated at No. 1, Krishna 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body of this letter, it is stated that the books of accounts and documents listed as per annexures " A " and " B " have been allowed to be retained. In the documents filed in court along with the writ petition, these annexures " A " and " B " are not marked as such. Instead, the petitioner has filed the panic as annexure " C " to the petition, without marking its two annexures as " A " and " B ". In fact, the only annexure " 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises are concerned there is no doubt that an extension has been granted by the Commissioner of Income-tax and that extension has been conveyed to the petitioner by letter dated 1st April, 1972, annexure " E " to the petition. Although, this extension is challenged on the ground that it was granted without hearing the petitioner, this ground has not been seriously pressed at the hearing. In fact, there is no requirement under 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the order on 28th March, 1972, as averred by Shri Tejinder Singh, respondent No. 3, in his affidavit dated 16th April , 1973. It is regrettable that Shri Tejinder Singh had previously taken the position that the annexure " E " which related to the extension of the period of retention in respect of documents seized from the Kashmeri Gate premises related to No. 1, Raj Narain Road. This was incorrect. The only explanation for this 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner within the specified period of 180 days. It is also the case of the petitioner that not only has the order of extension to be passed within the period of 180 days but that order has also to be conveyed to him within that period, otherwise it becomes invalid. Reliance is placed on the judgments of the Calcutta High Court reported as C. K. Wadha v. commissioner of income-tax and Mahabir Prosad Poddar v. Commissioner of 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 Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation. Under the terms of the authorisation contemplated by section 132(1), the authorised officer can search premises and seize articles, including books of account and documents. That authorisation is not effective because of being conveyed to the person whose premises are to be searched, but is effective as soon as it is communicated to the officer concerned. Once that autlhorisation has been given, the officer concerned has the right 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further. In the event of an omission to convey the approval and the reasons on which it is based, that person has a right to get a copy of the order from the authorised officer. It does not, however, mean that the order is invalid and ineffective till the date or time that he learns about it. Hence, we are of the view that the order in the present case was validly passed, and became effective, even though it was not communicated. There 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed form for any information relating to any assessee in respect of any assessment made under this Act or the Indian Income-tax Act, 1922, on or after the 1st day of April, 1960, the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is within the public interest to do so. Hence, if some other authority applies to the Commissioner to obtain information, the same may be disclosed in the discretion of the Commissioner. Under sub-clause (a) there is also a power to furnish information to other authorities. As this matter has not been fully argued or discussed in the present case, it is sufficient to note that there is no power to disclose information to other authorities 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Board. The question now arises as to whether the restriction contained in section 132(8) concerning the retention of the books of account and other documents applies also to other Income-tax Officers. Once the books have been seized by the two authorised Income-tax Officers, they are normally expected to supply the books and documents to the Income-tax Officer dealing with the case of the petitioner as the assessment cannot be completed by 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 cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorised offwicer " appearing in that sub-section as also including the Income-tax Officer, to whom the initially authorised officer might hand over the books of account or documents or other articles seized. If this interpretation is not placed on section 132(8), the present Income-tax Officer, Shri Jeevan Lal, could retain the books of account and documents for an indefinite period without any approval of the Commissioner. This cannot be the true 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 vali ..... X X X X Extracts X X X X X X X X Extracts X X X X
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