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TMI Blog2003 (9) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... r impounding the document, therefore, is not tenable in law and is liable to be set aside - - - - - Dated:- 17-9-2003 - Judge(s) : B. LAMARE. B. LAMARE J. -Heard Mr. D. Das, learned counsel for the petitioner and Mr. U. Bhuyan, learned counsel for the respondent. The petitioner is the managing director of Rahman Properties Limited having its registered office at S.S. Road, Lakhtokia, Guwahati. The said company runs a hotel under the name and style of Hotel Dynasty. On November 3, 1997, a group of about 8 to 10 income-tax officials led by the Assistant Director of Income-tax (Investigation) (respondent No. 3), entered into the office of the Hotel Dynasty and inquired about the petitioner. The said persons identified themselves as inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded after notice was issued to the petitioner under section 131 of the Act and thereafter, the documents were impounded under section 131(3) of the Act. Therefore, according to the respondents, there is no illegality in the process of survey as the documents were not impounded in the course of survey under section 133A of the Act. Mr. Das, learned counsel for the petitioner, submits that under the provisions of section 133A, respondent No.3 has no occasion to impound the documents in the course of the survey. According to counsel, respondent No.3 has circumvented the provision of section 133A by issuing notice under section 131 of the Act and thereafter, impounded the documents under section 131(3) of the Act. According to counsel, the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Tezal Patty Tea Company, Mohijuli Tea Company Pvt. Ltd. and prepared an inventory of the documents. The documents were removed to another room, sealed with paper paste and directed the petitioner not to enter into the sealed room. It is also stated in paragraph 7 of the petition that on November 4, 1997, at about 9.30 a.m., two Inspectors of the Income-tax Department led by respondent No.3 carne to the office of the petitioner in their vehicle, removed the paper seal and entered into the room by opening the lock and lift the documents in their vehicle and some in the vehicle of the petitioner. The respondents in paragraph 5 of the affidavit in opposition, while replying to paragraph 4 of the affidavit filed by the petitioner have stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace whenever, required by the authority where they conduct the survey. Section 131(3) of the Act provides that any authority referred to in sub-section (1) or sub-section (1A) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act. The first proviso to sub-section (3)(a) of section 131 of the Act, provides that an Assessing Officer or an Assistant Director shall not impound any books of account or other documents without recording his reasons for so doing. In the instant case, it is not disputed that the documents, books of account, files, etc., were removed from the place of survey, kept in a separate room under lock and key and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that while conducting survey under section 133A of the Act, removing of the books of account and other documents is in violation of the provision of sub-section (4) of section 133A. Therefore, issue of notice under section 131 of the Act, is only to circumvent the procedure and to cover up removal of documents in the course of survey. So also, in the case of Gheru Lal Bal Chand v. ITO [1982] 137 ITR 190, the Punjab and Haryana High Court held that the Income-tax Officer can resort to the powers under sub-sections (1) and (2) of section 131 only when the assessee refuses or evades to co-operate in terms of sub-section (6) of the section. Therefore, in that case the order to impound the documents under section 131(3) of the Act was turned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so observed that it is the Assistant Director of the Income-tax Department who made impounding of the documents. In such a situation, a proviso to sub-section (3)(a) of section 131 of the Act provides that an Assessing Officer or an Assistant Director shall not impound any books of account or other documents without recording his reason for doing so. A perusal of the notice issued under section 131 of the Act shows that, as disclosed, no reason was recorded in the order of impounding the documents. The order impounding the documents dated November 4, 1997, reads as follows: "The books of account, papers and documents marked HD 1 to HD 196, RR 1 to RR 14, MTC 1 to MTC 53 and DW 1 to DW 42 found during the course of survey under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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