9911796707
TMI Blog2000 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999, cancelled the transfer of the petitioner's case and in pursuance of the order dated February 23, 2000, passed by the court, the F. D. Rs. seized during the search operation have been released by the Department and the only issue which survives for consideration is whether the continued retention of the books of account and other documents seized during the search operation is ultra vires section 132(8) of the Income-tax Act, 1961 (for short, "the 1961 Act"). The petitioner is a society registered under the Societies Registration Act, 1860, and also under section 11/12 of the 1961 Act. In the search and seizure operations conducted on May 21, 1998, at the premises of Spring Dale Senior Secondary School, which is managed by the petitioner, the authorities concerned seized books of account, F. D. Rs. an other documents. After about ten days, the petitioner through its advocate submitted a representation annexure P-1, dated June 2, 1998, for releasing the F.D.Rs. seized during the search operations. This request was repeated vide letters annexure P-2, dated June 6, 1998, annexure P-4, dated July 3, 1998, and annexure P-5, dated August 10, 1998. In the last mentioned representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e more than one joint Commissioners, the senior-most officer shall handle these cases. Mr. Sawhney states that the respondents have no objection to this order, but he prays that the cases of the petitioners may be sent to one of the officers of the Central circle who alone deals with the raid cases. In the circumstances of these cases, we think it would be proper that the cases are examined by a senior officer against whom nobody is able to raise a little finger and has any apprehension. Therefore, we do not find any justification for accepting the request. In view of the above, Mr. Mittal, learned counsel for the petitioners, prays that the writ petitions may be disposed of as having been withdrawn. He further states that the interim order may be vacated and each of the petitioners be given a reasonable time to file the income-tax returns in pursuance of the impugned notices. The income-tax returns shall be filed within one month from today. The writ petitions are, accordingly, disposed of as having been withdrawn. No costs." However, in apparent violation of the statement made by counsel for the Department, the petitioner's case was transferred vide order dated June 11, 1999, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [1986] 157 ITR 206 (Delhi) ; Nutan Sahkari Avas Samiti Ltd. v. Director of Income-tax (Investigation) [1994] 208 ITR 843 (All) ; Rajendra Prasad Agarwalla v. IAC of I. T. [1994] 209 ITR 784 (Cal) and Dr. George Philip Modayil v. Assistant CIT [1999] 238 ITR 517 (Ker) and argued that the failure of the concerned authority to communicate the approval allegedly granted by the Commissioner of Income-tax (Central), Ludhiana, has the effect of rendering the retention of the books of account and the documents unlawful and, therefore, the respondents should be directed to release the same. Learned counsel stated that the assessment proceedings have been finalised during the pendency of the writ petition and, therefore, the retention of the documents would serve no purpose and a direction similar to the one issued by the Kerala High Court in the case of Dr. George Philip Modayil [1999] 238 ITR 517 may be issued in this case. Shri R. P. Sawhney, senior advocate, appearing for the Department, argued that the retention of the documents beyond the period of 180 days was necessitated because the assessment proceedings were pending and this has been done with proper approval of the compete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the approval obtained from the Commissioner of Income-tax and the recorded reasons of the authorised officer/Income-tax Officer on which such approval is based for the retention of the seized books of account and documents by the Department for a period of exceeding 180 days from the date of seizure. After analysing sub-sections (1), (8), (10) and (12) of section 132 of the Act, their Lordships laid down the following proposition: "On a plain reading of the aforesaid provisions it will be clear that ordinarily the books of account or other documents that may be seized under an authorisation issued under sub-section (1) of section 132 can be retained by the authorised officer or the concerned Income-tax Officer for a period of one hundred and eighty days from the date of seizure, whereafter the person from whose custody such books or documents have been seized or the person to whom such books or documents belong becomes entitled to the return of the same unless the reasons for any extended retention are recorded in writing by the authorised officer/the concerned Income-tax Officer and approval of the Commissioner for such retention is obtained. In other words, two conditions must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpeditiously as possible after the passing of the order of approval by the Commissioner and in default of such expeditious communication any further retention of the seized books or documents would become invalid and unlawful. It is obvious that such obligation arises in-regard to every approval of the Commissioner that might have been accorded from time to time." In Survir Enterprises' case [1986] 157 ITR 206, a Division Bench of the Delhi High Court held that once the bar set out in section 132(8) of the 1961 Act operated, the Department had to return the books of account or other seized documents to the person concerned. In Nutan Sahkari Avas Samiti Ltd.'s case [1994] 208 ITR 843, a Division Bench of the Allahabad High Court relied on the decisions of the Supreme Court in the case of Oriental Rubber Works [1984] 145 ITR 477 and of the Delhi High Court in Survir Enterprises' case [1986] 157 ITR 206 and held that non-compliance of the requirement of passing of a reasoned order by the authority concerned, approval by the Commissioner and communication of such approval together with the reasons to the assessee would vitiate the retention of the books of account and documents beyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he retention of books of account and the documents seized during the search operation beyond November 21, 1998, is legally sustainable. The admitted position which emerges from the pleadings of the parties is that the order allegedly passed by the Commissioner of Income-tax (Central), Ludhiana, granting approval to the proposal for extension of the retention of books of account and the documents was not communicated to the petitioner for a period of more than ten months. As per the respondents, version it was done on September 23, 1999. In our opinion, this long time-gap between the alleged approval by the Commissioner and communication thereof to the petitioner has the effect of rendering the retention of the documents illegal in view of the law laid down by the Supreme Court and various High Courts and, therefore, a direction deserves to be issued to the respondents to release the documents to the petitioner. In the result, the writ petition is allowed. The concerned authority of the Income-tax Department is directed to release the books of account and other documents seized on May 21, 1998, from the premises of the school of the petitioner within one month of the presentation o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
