TMI Blog1974 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 23rd April, 1974, respondents Nos. 1 to 4, who are Income-tax Officers of various circles at Kanpur, together with a number of income-tax inspectors and a peon raided the business premises of the petitioner. They searched the business premises and the account books of the petitioner-firm. They took control of the cash box, counted its contents and compared the same with the balances in the books, noted down the same in the statement of the accountant and procured the signature of the cashier on it. At that time Murlidhar, a manager of the firm, was in the office. Satya Narayan Jopat, who is alleged to be the petitioner's agent for doing income-tax cases, was also present there. It is alleged that after the books of account of the petitioner-firm had been seized by the respondent they placed about eleven sheets, some of them in type-script and others in manuscript, and insisted that Murlidhar and Jopat sign them. These persons refused to sign the sheets as they did not know anything about them. Thereupon, the respondents who were present at the shop telephoned Sri H. C. Garg, respondent No. 5, who was Assistant Director (Investigation), Kanpur, and told him that these persons were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has also been prayed that the respondents be directed not to make any copy or to make any abstract or note from the documents illegaly seized by them and that they be directed not to initiate any proceedings of any kind against the petitioner on the basis of the seized documents. Respondent No. 1 in his counter-affidavit states that he alone conducted the survey of the petitioner-firm's business premises. In the same premises nineteen other firms carry on business. According to the respondent these firms are inter-related. The other Income-tax Officers accompanying respondent No. 1 conducted the survey of the various other firms. According to him, after he had seen the account books of M/s. Yarn Traders and M/s. Vanaspati Agents, the account books of M/s. United Chemical Agency (the petitioner-firm) were produced for survey. The stock register of the petitioner-firm had, however, inside it five typewritten and seven handwritten papers. Respondent No. 1 required Murlidhar to provide necessary facility to inspect the documents and place marks of identification on them, and he further wanted to take extracts therefrom. He also wanted to verify these loose papers with reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of whom the Income-tax Officer exercises jurisdiction, at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in the carrying on of, such business or profession to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place, and on the inspection of such accounts or documents he may, if he so deems necessary, place marks of identification thereon or cause to be made extracts therefrom : Provided that the Income-tax Officer or such Inspector of Income-tax may enter any place referred to in this section only during such hours as the place is open for the conduct of the business or profession : Provided further that while acting under this section the Income-tax Officer or such Inspector of Income-tax shall not remove or cause to be removed from the place which he has entered any books of accounts or other documents. (2) If a person who under sub-section (1) is required to afford fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the account books of the petitioner-firm present at the spot and that Murlidhar refused to allow him to place marks of identification and to take extracts from the said loose papers. Thereupon, at 2-50 pm. he served a notice upon S. N. Jopat under section 131 of the Act. A copy of this notice is annexure " I " to the writ petition. This notice stated : " To Shri S. N. Jopat, M/s. United Chemical Agency, 49/27-F, Generalganj, Kanpur. Whereas your attendance is required in connection with the proceedings under the Income-tax Act in the case of M/s. United Chemical Agency you are hereby required personally to attend my office at Kanpur on the 23rd day of April, 1974, at 3-00 O' clock p.m. there to give evidence and/or to produce either personally, or through an authorised representative the books of account or other documents specified overleaf, and not to depart until you receive my permission to do so. Without prejudice to the provisions of any other law for the time being in force, if you intentionally omit to so attend, to give evidence or produce the books of account or documents, a fine up to Rs. 500 may be imposed upon you under section 131(2) of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the first respondent, after the service of notice, the books were produced (though according to him those very books had been produced earlier). The officer examined Murlidhar and recorded his statement. In view of section 133A, the powers under sub-sections (1) and (2) of section 131 which include the power to examine a person on oath could be utilised only for enforcing compliance of the requirements made. According to this officer, the requirement made was to provide facility to place marks of identification and to take extracts. The power of the officer to examine a person on oath was thus confined to enforcing compliance of the requirements made. He had no power to examine anyone for any other purpose. A perusal of the statement of Murlidhar as recorded by the surveying officer shows that he did not put a single question with a view to enforce compliance of the requirements aforesaid : all the questions were directed to elicit information about the contents of the accounts and the loose sheets as well as the business affairs of the petitioner-firm. For instance, he is alleged to have stated that the loose sheets are in the handwriting of Chandra Bhushan Shukla, munim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the surveying officer only to enforce compliance of the requirements made, and for no other purpose. The power to impound books of account or documents mentioned in sub-section (3) to section 131 could have no possible relation or relevance for enforcing compliance of the requirements of either facilitating the inspection or placing of the identification marks or causing extracts to be made from the account books or documents. The action of the first respondent in impounding and taking away the books of account or other documents belonging to the petitioner-firm was without the authority of law. They must return them. The loose sheets and papers which the respondents alleged were discovered in the stock register of the petitioner-firm pose a curious problem. The petitioner does not accept this case of the respondents. In the writ petition it has been stated : " 16. That after the books mentioned above had been seized and taken away into custody by respondents, they placed about eleven loose sheets, some of them in type-script and others in manuscript, and insisted Sri Murlidhar and Sri Jopat to sign them. 17. That these two persons refused to sign the sheets as they did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the phone as the respondent was pressurising Murlidhar and S. N. Jopat to sign on the loose sheets of which they had absolutely no knowledge, that neither Murlidhar nor S. N. Jopat had any knowledge of the contents of those loose sheets and that Sri Pandey advised them not to sign on those sheets. To corroborate this, an affidavit of R. R. Pandey, advocate, has been filed. In this Sri Pandey says that Sri Jopat wanted to know his opinion whether he should sign some loose papers about which he had absolutely no knowledge either of the contents or other whereabouts and for signing of which Sri R. K. Singh and others had been insisting, and that Sri Pandey advised him not to sign those papers. It is thus evident that consistently and persistently the petitioner's case is that these loose sheets were not found in the stock register of the petitioner-firm and that its employees and its manager had no knowledge of their existence or contents. In substance, the petitioner's case is that these loose sheets did not belong to the petitioner-firm but that they were placed in the account books by the surveying officer. As we have seen, the impounding of documents and their being taken i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
