9911796707
TMI Blog1994 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... s, papers and documents seized from the petitioners during the search and seizure operations on the aforesaid dates. The short facts are that the office premises of the petitioners were searched on January 23/24, 1992, by the Income-tax Officers under the provisions of section 132 of the Income-tax Act, 1961/section 37A of the Wealth-tax Act, 1957. According to the petitioners, the said seizure is made indiscriminately and large number of documents were seized, which include the original documents of title, power of attorneys in favour of the petitioners, original papers, original maps and the plans of construction, which had been approved by the Allahabad Development Authority, including the accounts of all the members of the petitioner-so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (8) of section 132 of the Act. referred to above, the authorised officer has to record reasons for retaining the same for a period exceeding 180 days and, secondly, approval has to be obtained from the Chief Commissioner or Commissioner for such retention. The proviso provides that the Chief Commissioner or Commissioner shall not authorise the retention of the books of account for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922, are completed. In the counter filed on behalf of the respondent the only relevant paragraph is 15 wherein it is averred that : "The record regarding the communication of the approval of the Commissioner of Income-tax to return the seized books, etc., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." This authority not only holds the retention of the books of account beyond 180 days without approval of the Commissioner or, in the absence of reasons recorded, bad but even non-communication to the petitioner of the same makes the retention illegal. To similar effect is the case of Survir Enterprises v. CIT [1986] 157 ITR 206 in which the Delhi High Court has held as under : "It has been state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be taken seriously and no lapse should occur. If the Revenue has been able to collect material showing tax evasion, it was its duty to have obtained the Commissioner's approval within one hundred and eighty days. This is a mandatory requirement and every one is supposed to know the law." Learned counsel for the petitioner relied on the case of Prasadamal Saktumal v. State of U. P. [1983] UPTC 1091 ; [1982] Tax LR 3277 (All), which was a case under section 13(3A) of the U. P. Sales Tax Act, 1948. Section 13(3A) provides as under : "(3A). Notwithstanding anything contained in sub-section (3), the officer seizing any account, register or other document under that sub-section may, for reasons to be recorded by him in writing and with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not record any reasons in writing for retaining the seized material beyond the period of ninety days." Lastly, the case Jhunjhunwala Oil Mills v. State of U. P. [1994] UPTC 172 (All) is again a case of sales tax which follows the same principle of law as laid down in Prasadamal Saktumal v. State of U. P. [1983] UPTC 1091 ; [1982] Tax LR 3277 (All). Learned counsel for the petitioners placed reliance on paragraph 33 of the writ petition wherein a request was made that the Department can keep photostat copies of the originals and the originals may be returned to the petitioners. The Department may be permitted to take photostat copies before returning the documents seized. Though this question was gone into in the case of Prasadamal S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the person concerned on the fulfilment of conditions. Thus, so long as the books of account or documents remain in the custody of the Department and till they are returned to their lawful owner, the Department continues to have custody thereof notwithstanding the expiry of one hundred and eighty days. On the expiry of one hundred and eighty days, the Department loses the right to retain the books of account and documents. But, nevertheless, the Department is under a duty to ensure the safety of the books of account and documents till the owner gets back their possession. Thus, under law, it cannot be said that custody of the books of account and other documents by the Department is unlawful." Hence, we hold that the retention of the sei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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