9911796707
TMI Blog2000 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... September 26, 1995, the officers of the Income-tax Department seized the books of account and documents. This was followed by attachment of their bank accounts. After about one year, the Assessing Officer passed an order of assessment dated September 27, 1996, and created a demand of Rs. 85 lakhs. The applications filed by the petitioners for stay of the recovery were dismissed by the Assistant Commissioner of Income-tax, the Deputy Commissioner of Income-tax, Ambala Range, Ambala; and the Commissioner of Income-tax, Rohtak. However, by an order dated May 29, 1998, the Income-tax Appellate Tribunal accepted their applications and stayed the recovery subject to certain conditions. The relevant extract of that order is reproduced below : "After considering the rival submissions, we are of the view that these are fit cases in which the Tribunal can exercise its discretion of granting stay of the demand but only on the basis of the following conditions : (i) Paras Rice Mills shall deposit 10 per cent. of the outstanding demand in three equal instalments, the first by June 15, 1998, and the remaining two by July 15, 1998, and August 14, 1998. The remaining assessees shall deposit 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be appropriated by the Department towards the tax liability that may be ultimately fixed, if the appeal preferred by the petitioner is dismissed, otherwise, the same shall be returned to it. In this view of the matter, there is no need for the Tribunal to ask for 10 per cent. of the total liability to be deposited. The appeal be heard and decided as early as possible. This order shall, however, not prejudice the rights of the parties, in other proceedings that may be launched by them against each other. Disposed of accordingly." Thereafter, the petitioners filed applications dated October 20, 1998, and November 7, 1998, through their advocates for lifting of the attachment and return of the books of account. Their prayer was declined by the Deputy Commissioner of Income-tax, Investigation Circle-II, Ambala, vide communications dated November 16, 1998, and December 2, 1998 (filed as annexures P-17 and P-21 with C. W. P. No. 2087 of 1999). The petitioners have challenged the continued attachment of their bank accounts and the retention of books of account and documents beyond the period of 180 days stipulated in section 132 of the Act by contending that the action tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-firm did receive the approval of the Commissioner from respondent No. 3 vide his letters Nos. 2112, dated July 1, 1997 (received on July 4, 1997), after 626 days of the search and seizure operation and 6523, dated December 11, 1998. The petitioner never received any communication prior to July 4, 1997, and also has not received the alleged communication No. 6152, dated December 30, 1997, from respondent No. 3. The respondents did not bring on record the alleged approval obtained from the Commissioner of Income-tax, Rohtak, dated March 19, 1996, and the same was not conveyed within 180 days of the search and seizure operation as was required under law." The respondents have filed a reply to the replication, but the statement made in para. 10 of the replication about the non-receipt of any communication prior to July 4, 1997, and the letter dated December 30, 1997, has not been controverted. At this stage, we may mention that during the pendency of the writ petitions, the respondents have lifted the attachment of the bank accounts of the petitioners and to this effect, a statement was made before the court by Shri R. P. Sawhney, senior advocate for the Revenue, on Aug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Chief Commissioner, Commissioner, Director-General or Director for such retention is obtained : Provided that the Chief Commissioner, Commissioner, Director-General or Director shall not authorise the retention of the books of account and other documents for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed . . . . (10) If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub-section (1A) objects for any reason to the approval given by the Chief Commissioner, Commissioner, Director-General 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 person concerned. In the absence of such communication the Commissioner's decision according his approval will not become effective. Moreover, sub-section (10) confers upon the person legally entitled to the return of the seized books and documents a right to object to the approval given by the Commissioner under sub-section (8) by making an application to the Central Board stating therein the reasons for such objection and under sub-section (12) it is provided that the Central Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit. It is obvious that without the knowledge of the factum of the Commissioner's approval as also of the recorded reasons on the basis of which such approval has been obtained it will not be possible for the person to whom the seized books or documents belong to make any effective objection to the approval before the Board and get back his books or documents. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recording of reasons and communication thereof in the following words : "The object of communicating the order granting approval for retention of the seized records and the reasons recorded by the assessing authority is to enable the petitioner, if he is aggrieved, to file objection to the Commissioner of Income-tax as contemplated under sub-section (10) of section 132. Sub-section (10) of section 132 provides that, if a person legally entitled to the books of account or other documents seized under subsection (1) or sub-section (1A) objects for any reason to the approval given by the Commissioner of Income-tax 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. Sub-section (11) provides the procedure also. From the provisions of sub-section (10) of section 132 it is clear that it is mandatory that the order granting approval for the continued retention of the seized records together with the reasons recorded by the assessing authority are communicated to the petitioner and that too expeditiously." The learned single judge then examined the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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