Interpretation of Section 132(9A) of the Income-tax Act, 1961 - Income Tax - F.No. 286/27/84-IT(Inv.-lII)

F.No. 286/27/84-IT(Inv.-lII) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Date : 24.3.1984 To, All Commissioners of Income-tax, Sir, Sub : Interpretation of Section 132(9A) of the Income-tax Act, 1961. A copy of note wherein the Board has examined the above matter in consultation with the Ministry of Law is forwarded herewith for information: Chief Commissioner, Delhi has sought the instruction of the Board regarding interpretation of the provisions of section 132(9A) of the Income Tax Act, 1961. Section 132(9A) reads as under: Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the book of account or other documents or assets seized under that sub-section shall be handed over by the authorized officer to the Income-tax Officer having jurisdiction over such person within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorized officer under sub-section (8) or sub-section(9) shall be exercisable by such Income-tax Officer. The sub-section was introduced by Taxation Laws (Amendment) Act 1975 with effect from 1.10.1975. The Board s instructions contained in the explanatory notes on the provisions of Taxation Laws Amendment Act, 1975 vide circular No. 179 F.No.l31(17)/TPL/ dated 30.9.1975 read as under: Under the existing provision, the authorized officer has to take action for the retention of the seized books of account etc., beyond the initial period of 180 days, whether or not be exercises jurisdiction over the case. Under the amended provision, the authorized officer, if he is not the assessing officer will be required to hand over the books of account, etc. seized by him to the assessing officer within a period of 15 days of the seizure and thereafter the powers and functions of the authorised officer under sub-section (8) and (9) of section 132 will be exercised by the assessing officer. The Chief Commissioner desires to know whether or not an A.D.I. (Investigation) who may he an authorized officer for a particular case is also required to hand over the books of accounts within 15 days of the seizure to the Income Tax Officer. The Chief Commissioner had referred the matter to Shri D.P. Wadhwa, Advocate, the then Central Government Standing Counsel in Delhi High Court. The learned advocate (now an Hon. Judge of the Delhi High Court) opined that an A.D.I. has the jurisdiction for the purposes of section (9A) of section 132 and that he was not required to hand over the books of account to the Income Tax Officer within 15 days of the seizure. The learned Standing Counsel considered the provisions of section 131, 132-A, 133-A, 135, 119(3) and section 2(21) of the Income Tax Act and observed that a co-joint reading of these provisions shows that sub-section (9A) of Section 132 has no applicability to the case of the A.D.I. who will be covered by section (8) to section 132. According to him the Board s instruction No. 179 reproduced above would apply to the authorized officer who had no jurisdiction u/s 132 (9A) and would not apply in the case of an A.D.I. who has the jurisdiction over a case referred to under clauses (a), (b) and (c) of section 132(1). While coming to this conclusion Shri Wadhwa has also examined the provisions of sub-section (1) and (1-A) of section 131 and noted that A.D.I. has the power to issue summons etc. similar to those of Civil Court under Civil Procedure Code when trying a suit. Similarly under sub-section (1-A) of section 131 if an A.D.I. has reasons to suspect that any Income has been concealed or is likely to be concealed by any person within his jurisdiction then for the purposes of making any enquiry or investigation relating thereto he is competent to exercise the same powers as under sub-section (1) of section 131 notwithstanding that any proceedings with respect to such persons are pending before him or any other income-tax authority. Shri Wadhwa is of the view that interpretation to the contrary will make provision of section 132(8) redundant because section 132(8) lays down the basic provisions that the authorised officer who has seized the books of accounts cannot retain the same for a period exceeding 180 days except with the prior approval of the Commissioner of Income Tax. Sub-section (9-A) in only exception carved out of sub-section (8). 2. There is no notification as such defining the jurisdiction of an A.D.I. Section 2(21) provides that Director of Inspection means a person appointed by Director of Inspection under sub section (1) of section 97 and includes the persons appointed to be an Additional Director of Inspection, Dy. Director of Inspection or an Assistant Director of Inspection. The Directors of Inspection exercise all-India jurisdiction. Therefore, Assistant Directors of Inspection working under them will have the same jurisdiction as assigned to Directors of Inspection. In other words, the A.Ds.I. will have all-India jurisdiction for the purposes of making any enquiry. The views expressed by Shri Wadhwa appear to be correct. However, keeping in view the complexities of the matter we may seek the advice of Ministry of Law in the matter. Sd/- (K. D. GUPTA) Deputy Secretary (Inv.III) Sd/- Member (Inv.) P.S. Bhaskaran 27.3.1984 Ministry of Law, Department of Legal Affairs Advice (B) Section The question for consideration is whether an Assistant Director of Inspection, who may be an authorized officer for a particular case is also required to hand over the books of accounts within fifteen days of the seizure to the Income Tax Officer. Section 132 (9A) of the Income Tax Act, 1961 provides that where the authorized officer has no jurisdiction over the person referred to in clauses (a) or (b) or (c) of sub-section (1), the books of account or other documents or assets seized under that sub-section shall be handed over by the authorized officer to the Income Tax Officer having jurisdiction over such person within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorized officer under sub-section (8) or sub-section (9) shall be exercisable by such Income Tax Officer. 2. Sub-scction (9A) will come into play only where the authorized officer has no jurisdiction over the person referred to in clauses (a) to (c) of sub-section (1). 3. Under sub-section (1) of section 132, even an Assistant Director of Inspection is an authorized officer and he has jurisdiction over the persons mentioned in that sub-section. On this ground alone it would appear that sub-section (9A) would not be applicable to the case of an Assistant Director of Inspection. 4. We have also gone through the opinion given by Shri D.P. Wadhwa, the then Advocate, in regard to the interpretation of section 132 and we are in general agreement with the views expressed by him. Sd/ (P. K. KARTHA) Joint Secretary Legal Adviser 5.4.1984. Yours faithfully, (K. D. GUPTA) Secretary Central Board of Direct Taxes,