TMI Blog2000 (3) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... further pursuant to the aforesaid notices and summons. The facts leading to the filing of this petition, briefly stated and as averred by the petitioners, are as under: Petitioner No. 1, Madhupuri Corporation, is a Hindu undivided family (HUF) carrying on the business as a shroff at Rameshwar Complex, Lokhand Bazar, Bhavnagar. Petitioner No. 3, Mahendra Himmatlal Shah, is the karta of the said Hindu undivided family. Petitioner No. 3 is also a proprietor of petitioner No. 2-firm, Sagar Corporation, which also has a place of business at Rameshwar Complex. A search was carried out by respondent No. 1 at the office premises of petitioners Nos. 1 and 2 and residential premises of petitioner No. 3 and also at the office premises of the other 12 concerns on December 7, 1999. The panchanama was prepared and inventory was made and books and documents and computer with floppies were seized. A statement of petitioner No. 3 was recorded under section 132(4) of the Act on December 8, 1999. Respondent No. 3 issued notice under section 158BC of the Act on December 10, 1999, and January 18, 2000, to petitioner No. 3 and Nos. 1 and 2, respectively, calling upon them to prepare true and correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise-Current Account No. 4316 in Shri Vardhman Co-operative Bank Ltd., on May 21, 1999. Cheques worth Rs. 7,30,000, Rs. 8,70,000, Rs. 7,50,000, Rs. 6,50,000 are paid to Madhupuri Corporation on January 25, 1999. 2. Nirav Computers-Cuffent Account No. 3772 in Shri Vardhman Cooperative Bank Ltd., worth Rs. 4,95,000, Rs. 5,15,000 was paid to M. Sagar Corporation (proprietary concern of Shri Mahendra H. Shah) on January 13, 1999. 3. Mahakali Enterprise-Current Account No. 4317 in Shri Vardhman Co-operative Bank-Cash of Rs. 21,00,000 is withdrawn by Shri Bhavesh Shah, accountant of Madhupuri Corporation on July 31, 1998. 4. Nirav Soap Factory-Account No. 320 in Shri Vardhman Co-operative Bank Ltd. It has a transaction of cash deposit and withdrawal of Rs. 22,00,000 over the years although return was not filed. This is a sister concern of Madhupuri Corporation. 5. Hitesh Trading Co. Account No. 8314 in Shri Vardhman Co-operative Bank Ltd., on October 5, 1998, Shri Bhavesh Shah, accountant of Madhupuri Corporation withdrawn Rs. 39,50,000 in cash. Further, on December 12, 1998, Hitesh Trading Co. gave a cheque of Rs. 4,25,000 to Madhupuri Corporation. 6. Paramount Trading Co. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 parties as petitioner No. 3 is the karta of petitioner No. 1-Madhupuri Corporation (HUF), and a proprietor of petitioner No. 2-Sagar Corporation. The authorisation, therefore, suffers from non-application of mind. (ii) There were several irregularities at the time of search. (iii) Although the search was concluded on December 8, 1999, respondent No. 1 who was the authorised officer did not hand over all the documents and books of account seized from the petitioner to the Assessing Officer having jurisdiction over the petitioners within a period of 15 days, as stipulated by the proviso to sub-section (9A) of section 132 of the Act. Therefore, all the notices issued under section 158BC as well as summons issued under section 131(1A) on January 13, 2000, were illegal and without jurisdiction. In support of the said contentions, strong reliance is placed on the decision of the Madras High Court reported in K.V. Krishnaswamy Naidu and Co. v. CIT [1987] 166 ITR 244 and Dr. C. Balakrishnan Nair v. CIT [1999] 237 ITR 70 (Ker). (iv) There are post search illegalities. Submissions on behalf of the Department: In reply,. Mr. Naik for the respondent has submitted as under: (i) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y authorisation is to be issued, it should be with reference to one single individual or a person and not in respect of a number of persons or individuals. As per the provisions of section 2 of the General Clauses Act, 1897, singular includes plural and there is no prohibition against issuance of common authorisation when the competent authority has reason to believe that a number of persons are involved in interconnected transactions as reflected from the prima facie material available with the competent authority. Mr. Naik has shown for our perusal the original satisfaction note which was initially prepared by respondent No. 1 and which was approved by the Additional Director of Income-tax (Investigation) at Rajkot, as well as the Director of Income-tax (Investigation) at Ahmedabad. On a perusal of the said note and considering that the petitioners were dealing with large sums of money running into crores of rupees and still petitioners Nos. 1 and 3 had not filed any income-tax return all these years and that petitioner No. 2 had also not filed any return for the last four years, as stated on behalf of the petitioners, we find that there was material available on the record o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore if the authorised officer is an Income-tax Officer having jurisdiction over the person he can retain the records under sub-section (8) but if the authorised officer happens to be an officer other than the Income-tax Officer who is the Assessing Officer, that officer shall hand over the documents to the Assessing Officer immediately after 15 days from the date of search. On the other hand, Mr. Naik for the respondent has submitted that the view of the Division Bench of the Madras High Court in the aforesaid decision is not the correct view and that the correct view is the one which was taken by the learned single judge of the same High Court in the decision in K. Raju v. Third ITO [1985] 153 ITR 138, where the learned single judge held as under: "Thus, it is clear that the jurisdiction of the officers of the Intelligence Wing over the persons will be co-extensive with that of the Commissioner's charge in which the wing is located. Therefore, when an Assistant Director of Inspection is authorised by the Commissioner under section 132(1)(a) of the Act to conduct a search, it would follow that such an Assistant Director of Inspection would also be the authorised officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no likelihood of any particular investigating officer having any scope for abusing his powers as all the developments are to be reported to the higher officers within 24 hours and the cash and jewellery are also to be deposited at the earliest opportunity, as stated above. In our opinion, the legal contention urged on behalf of the petitioner is not required to be dealt with, as in the facts of the present case, we do not think it necessary to express any opinion on the said question since the documents and books of account were already handed over by the authorised officer to the concerned Assessing Officer before January 18, 2000, and that no prejudice is shown to have been caused to the petitioners by their retention for a few days beyond a period of 15 days. In this connection, we may also refer to the principle enunciated by the apex court in Dr. Partap Singh v. Director of Enforcement [1985] 155 ITR 166; Pooran Mal v. Director of Inspection (Investigation) [1974] 93 ITR 505 and Radha Kishan v. State of U.P. [1963] AIR 1963 SC 822, that illegality of search does not vitiate evidence collected during such search, though the court or the authority before which such mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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