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TMI Blog2006 (8) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... aiswal for the respondents. JUDGMENT 1. Petitioner No. 1 before this court is a public trust with petitioner No. 2 is its President. It appears that later on the Joint Charity Commissioner by order dated July 7, 2000, appointed ad hoc body to administer the said trust and the said body is joined as petitioner No. 3 as per the orders of this court dated January 8, 2002. All the three respondents are officers of the Union of India in its Income-tax Department. The petitioners challenge the order dated July 29, 1992, passed by respondent No. 1-Commissioner of Income-tax in proceedings under section 132(12) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). In short their contention is that they are exempt from the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e crore nineteen lakhs two thousand four hundred and fifty eight only and on June 17, 1991, the said authority issued notices under section 148 for the assessment years 1984-85 to 1990-91. This order was challenged by the petitioners in proceedings under section 132(11) on July 12, 1991, and on December 31, 1991, the petitioners prayed for its expeditious disposal. On January 31, 1992, the petitioners approached this court in Writ Petition No. 380 of 1992 and challenged the order dated June 13, 1991, and in the alternative sought direction to respondent No. 1 to dispose of their application under section 132(11) immediately. A Division Bench of this court on March 5, 1992, disposed of the said writ petition after recording the submission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. It is stated that by refusing to consider this issue, the remedy available to the petitioner has been declined and, hence, this court must interfere and ask respondent No. 1 to reconsider this aspect. 5. Learned advocate on behalf of the respondents has stated that the issue of exemption cannot be decided in limited jurisdiction under section 132(11) of the Act. It is stated that orders under section 132(5) or 132(12) are not final but of interlocutory nature passed only with a view to determine whether entire assets or securities discovered in search need to be retained till finalization of assessment. He argues that the question of entitlement of the petitioner to claim exemption will be considered in section 148 proceedings and at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned and order under the said provision is not final and conclusive for all purposes. Similarly the hon'ble Division Bench of this High Court in the case of Narayan R. Bandekar [1989] 177 ITR 207 held that an order under section 132(5) is an order of summary nature and does not conclude the rights of the petitioner because while passing the assessment order, it is always open to him to point out that assets recovered in search do not represent undisclosed income. It is further observed that if there is any violation in exercise of that power by the income-tax authority, the proper remedy is to lodge an appeal before the appellate authority. The hon'ble Division Bench, therefore, refused to interfere with the order under section 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be heard, provision therein for inquiry, the time limit for passing order and previous approval of superior to such orders as also provision for appeal to higher authority against it reveal that the Legislature has provided for enough protection to the assessee even in these proceedings. The power of search and seizure is extraordinary power and hence, the Legislature has incorporated these measures to safeguard the interest of the assessee. The provision being in favour of the assessee and that too in a taxing statute, it needs to be interpreted liberally in favour of the assessee. The provision is made only to see that power of search is not misused to the prejudice of the citizen and the officer must find out the quantum of asset or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumscribed by the considerations which are not relevant under section 132(5) of Act. The appellate authority, i.e., respondent No. 1 is equally obliged to prima facie consider correctness or otherwise of entitlement of the present petitioners to claim exemption. If in summary inquiry, it is found that the petitioner is entitled to claim exemption, there is no question of respondent No. 1 or respondent No. 3 retaining any assets or property towards tax liability if undisclosed income is otherwise explained. 8. In the present case, respondent No. 1 has refused to consider the claim for exemption on the ground that it would result in premature decision of matters which need to be decided during course of regular assessment proceedings. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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