TMI Blog1985 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... for the following reasons: For further investigation. I, therefore, approve the ADI's proposal to retain the account books and other documents for a further period up to December 31, 1985. " The ADI referred to therein is a reference to the Assistant Director of Inspection. The petitioner is a firm of income-tax practitioners at Coimbatore. The firm consists of two partners. The Assistant Director of Inspection (Intelligence), the second respondent in the writ petition, who was authorised by the Director of Inspection with reference to the provisions of section 132(1)(c) of the Act conducted a search in the head office and the branch office of the firm and also the residential premises of both the partners on November 28, 29, 1984. The authorities had seized a sum of Rs. 40,000 in cash and some items of jewellery along with certain documents from the residence of one of the partners. It is contended by learned counsel that no undisclosed money, bullion or jewellery, nor any incriminating material were seized from the office premises of the firm, though learned counsel admits that some of the records and account books of the firm were seized from those offices. It is furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Act and it is only the Income-tax Officer who has jurisdiction over the firm and who had received the documents under section 132(9A) of the Act who has the jurisdiction under section 132(8) of the Act to apply for an extension of the period of detention and since in this case that Officer not having applied for such extension, the order of the Commissioner granting extension of time was without jurisdiction. Relevant provisions which need be considered in this connection are sub-sections (5), (8) and (9A) of section 132 and they read as follows: Sub-section (5) : " Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) is seized under sub-section (1) or sub-section (1A), the Income-tax Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed, shall, within 120 days of the seizure, make an order, with the previous approval of the Inspecting Assistant Commissioner." Sub-section (8): " The books of account or other documents seized under sub-section (1) or sub-section (1A) shall not be retai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson, the authorised officer was directed to hand over the documents or assets seized to that Income-tax Officer within a period of 15 days from the date of seizure. In the circumstances, therefore, there could be no doubt that when sub-s. (9A) refers to an authorised officer having no jurisdiction over the person, it is a reference to an officer other than an Income-tax Officer having jurisdiction to make an order under sub-section (5). Any other construction will make sub-section (5) unworkable. For the same reason, the authorised officer referred to in sub-section (8) is the same authorised officer referred to in sub-section (9A) as having no jurisdiction over the person. The net result, therefore, would be that if the authorised officer is an Income-tax Officer having jurisdiction over the person, he can retain the records himself for 180 days under subsection (8). But, however, he will have to make an order under sub-section (5) within 120 days. If the records are required by him for any other purpose, for example under section 288(5), that Income-tax Officer also can ask for approval of the Commissioner for such retention. If the authorised officer happens to be an officer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble the Income-tax Officer to make an order under sub-section (5), though the physical custody may be with the Income-tax Officer, the legal custody is with the Assistant Director of Inspection, and therefore, the impugned order is valid. In this connection, she referred to the definition of " Director of Inspection " in section 2(21) of the Act and the provisions contained in sections 131(1A) and 135. Section 2(21) defines "Director of Inspection" as a person appointed to be a Director of Inspection under sub-section (1) of section 117, and includes a person appointed to be an Additional Director of Inspection, a Deputy Director of Inspection or an Assistant Director of Inspection. Section 131(1A) provides that if the Assistant Director of Inspection has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons within his jurisdiction, then, for the purpose of making any enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under subsection (1) on the Income-tax Authorities, notwithstanding that no proceedings with respect to such person or class of persons are pending b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself is made with reference to money, bullion, jewellery or other valuable article or thing seized under sub-section (1) or sub-section (1A) and there is no provision other than sub-section (9A) which authorises the person who has seized those records to hand them over to the Income-tax Officer for making an order under sub-section (5). We may also state that learned counsel for the Revenue could not rely upon any provision in the Act or any rule or notification conferring specifically the powers of the Income-tax Officer under sub-section (5) to be exercisable by the Assistant Director of Inspection. The only communication which she could refer to is the Board's Circular No. XII/II/199, jurisdiction of Intelligence Wing, which reads as follows (at p. 146 of 153 ITR): " The jurisdiction of Intelligence Wing is, for the present, confined to the Commissioner's charges in which the various units of the Wing are located so that they may be able to do intensive work in the limited area and show results. There is, however, no objection to Utilising the officers of the Intelligence Wing outside the present Commissioner's charges, if an important case arises and it is necessary to do s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (8) would apply to all other cases. This contention cannot be accepted for more than one reason. There are no words either limiting the scope of sub-section (9A) to an Income-tax Officer who has no jurisdiction or limiting the scope of sub-section (8) to an authorised officer other than an Income-tax Officer who has no jurisdiction over the person. Secondly, in a case where the authorised officer happens to be an officer other than an. Income-tax Officer, the provision of sub-section (5) could not be invoked. We are, therefore, unable to accept the contention of learned counsel. In the foregoing circumstances; if the Assistant Director of Inspection had retained the records beyond the period of 15 days from the date of seizure, the retention itself would have been illegal. However, factually we find that the records were handed over to the Income-tax Officer who made the order under section 132(5) even before December 10, 1984, that is, within 15 days from the date of seizure. Though the notice issued under section 132(5) is dated December 10, 1984, and that establishes the handing over the documents, in the counter-affidavit filed in the writ petition on behalf of responde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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