9911796707
TMI Blog1998 (6) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under section 132(8) of the Act on July 7, 1994 (exhibit P-3), according sanction to the first respondent for the retention of books and documents seized on January 21, 1994, from the petitioner's residence up to March 31, 1995, or for a period not exceeding 30 days after all the proceedings under the Act in respect of the years for which the books and documents are relevant are completed, whichever is earlier. It is further stated that subsequently, on March 22, 1996, the second respondent passed another order under section 132(8) according sanction to the first respondent for the retention of books and documents up to March 31, 1997. The petitioner has filed this O. P. stating that exhibit P-4 order is void and without jurisdiction. A counter-affidavit is filed by the first respondent on July 29, 1997. In the said counter-affidavit, it is stated that a statement under section 132 of the Act was recorded during the search and that the petitioner has offered certain amounts as his unaccounted and undisclosed income. It is stated that on a preliminary scrutiny of the seized records even the income disclosed was found to be inadequate and, therefore, the assessment/reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized books of account and documents, it is stated, are absolutely necessary for the completion of both the appeals and penalty proceedings as the seized materials will have a direct bearing in such proceedings. The first respondent has also stated that the petitioner was given ample opportunity to peruse the seized records and to take extracts therefrom. I have heard learned counsel appearing for the petitioner and learned standing counsel appearing for the respondents. Learned counsel appearing for the petitioner submitted that as per the provisions of sub-section (8) of section 132 of the Act, the first respondent has no authority to retain the seized records beyond a period of 180 days from the date of seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained. Learned counsel submitted that in the instant case the search was conducted on January 21, 1994, and the books of account and other documents were also seized on the same date. He submitted that though the second respondent granted approval for retention of the seized books of account and other documents up to March 31, 1995, on Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessing authority in writing and after obtaining the approval of the Commissioner for such retention, which has not been done in the instant case. According to the petitioner, the respondents have not complied with the requirements of section 132(8) for retaining the books beyond the period of 180 days from the date of seizure. In order to see whether the said contention has any force, it is necessary to refer to section 132(8) of the Act which reads as follows : "(8) The books of account or other documents seized under sub-section (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 Commissioner for such retention is obtained : Provided that the Commissioner 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." It is also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." From the aforesaid observations of the Supreme Court, it is clear that the assessing authority is justified in retaining the seized books and records under section 132(8) only if the following conditions are satisfied : (i) reasons are recorded in writing-by the Assessing Officer seeking the Commissioner's approval, (ii) the Commissioner grants approval for the retention, (iii) reasons recorded by the Assessing Officer as well as the Commissioner's approval are communicated to the assessee concerned, and (iv) the communication is made as expeditiously as possible. Various other High Courts have also taken the view that unless the authority retaining the books satisfied all the aforesaid conditions the retention of the seized books and accounts beyond the period of 180 days will be illegal and invalid. (vide Thanthi Trust v. CIT [1987] 167 ITR 397 (Delhi), J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -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. In the instant case, even assuming that the Commissioner has passed an order granting approval for retention of the seized records up to March 31, 1996, since the said order has not been communicated to the petitioner during the period of its efficacy it suffers from the infirmity pointed out by the Supreme Court in Oriental Rubber Works case [1984] 145 ITR 477. Though the second respondent has subsequently passed exhibit P-4 and other orders granting approval for continued retention of the seized records up to March 31, 1997, it cannot cure the illegality in the order granting approval for retention of the books up to March 31, 1996. Accordingly, I hold that the continued retention of the books of account and other records seized as per exhibit P-1 panchanama beyond March 29, 1996 was illegal. In this view of the matter, exhibit P-4 and subsequent orders passed by the second respondent granting approval for contin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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