TMI Blog2005 (4) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... a J.- Facts in brief: An unprecedented novel situation arose in the State of Andhra Pradesh due to the decisions of this court holding certain portions of the excise policy of the State Government being bad, ultimately paving the way for issuance of No. DDIT/U-1(2)/2004-05, dated March 16, 2005, whereunder the Superintendents of Prohibition and Excise of the State of Andhra Pradesh were called upon by the first respondent, evidently representing the investigative agency of the Income-tax Department, to produce all the demand drafts along with the applications of the applicants within 24 hours of the delivery of the judgment of this court in a pending writ petition in the manner indicated in the said proceeding purporting to exercise such power under section 131(1) and (1A) of the Income-tax Act 1961, hereinafter in short referred to as "the Act" for the purpose of convenience. The said action is challenged by writ petitioners Nos. 1 to 4. The first petitioner is M/s. A. P. Wine Dealers Association, represented by its general secretary, a registered Association, the second petitioner is M/s. Twin Cities Wine Merchants Association, represented by its president, an unregistered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act it can be safely concluded that this action would not be protected falling under the issuance of summons for the purpose of section 131 of the Act. Counsel would submit that the investigative agency is definitely at liberty to take action following the procedure as specified by different provisions of the Act and not beyond it and at any rate omnibus summons or directives to all the Excise and Prohibition Superintendents of the State calling upon them for the production of the original demand drafts and the applications exercising powers under section 131 of the Act is impermissible under law. Learned counsel also explained the different expressions and the words and the language employed in the provisions in this regard. Learned counsel also would comment that even otherwise the powers specified under section 131(1) of the Act can be exercised only for the limited purpose as specified under the Act as such and not otherwise. It is no doubt true that each applicant has a right to get his demand draft back but on that ground distinct court fee need not be paid by each of such applicants, since a common cause or common grievance of the participants is being ventilated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first respondent is totally without jurisdiction, such action may have to be held to be bad for lack of power and authority to exercise such power and hence the legal rights of the writ petitioners and the applicants cannot be defeated on such technical grounds of the plea of locus standi and the plea of non-furnishing of the details and other like reasons. Counsel also would maintain that when a prejudicial action is taken, the professional bodies representing the trade quite often would be espousing the cause and would be protecting the interests of the members of such society or association and hence the writ petition cannot be thrown out on the ground of locus standi. Learned counsel also placed reliance on certain decisions to substantiate his submissions in this regard. Submissions of Sri S. R. Ashok, senior counsel appearing on behalf of the Income-tax Department: Sri S. R. Ashok, learned senior counsel representing the Income-tax Department raised a preliminary objection relating to the locus standi of the writ petitioners to maintain the writ petition and the maintainability of the writ petition and also the objection relating to the payment of court fee. Learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dual grievances. Learned counsel also would maintain that this is not a public interest litigation and inasmuch as the writ petitioners approached the court with oblique motive for extraneous considerations to lend a helping hand to dishonest persons who are concealing their wealth, this court cannot definitely extend its helping hand. Counsel also made elaborate submissions relating to the scope and ambit of sections 131 and 132 of the Act. Counsel would maintain that too numerous persons are involved and in order to protect the exchequer which is needed since large scale fraud is involved in the monetary transactions only for the limited purpose, these documents, demand drafts, were called upon and even by furnishing photostat copies of the demand drafts, the same cannot be worked out and learned counsel explained the difficulties involved in relation to the same. Learned counsel also had drawn the attention of this court to several definitions of "document" and would contend that at the best this may fall under the "escrow arrangement" and made elaborate submissions in this regard. Counsel made it very clear that this is not a case of seizure falling under section 132 and the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Advocate General however made it clean that the question of interpreting article 256 of the Constitution of India) and the directives of the Central Government and the obligations of the State Government in this regard and the extreme stand of the break down of the constitutional machinery may not come into play at all for the reason that the specific stand of the State Government is that in the light of the excise policy the applicants had submitted the applications and the demand drafts had been deposited and in the light of the decisions rendered by this court the present novel situation arose and absolutely the State Government has no role to play and the State Government is not coming in the way of the Income-tax Department and its investigative agency in taking such steps which are permissible in law under the provisions of the Act. Further, the learned Advocate General would submit that taking the over-all facts and circumstances it would be just and proper to dispose of the matter at an early date. Locus standi of the writ petitioners and the maintainability of the writ petition: While dealing with the aspect of locus standi one of us (P. S. Narayana J.) in the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e can join as petitioners and are also liable to pay only one set of court fee. Different judgments have been referred to during the hearing. One of the judgments relied by learned counsel for the petitioner is a recent judgment of this court in M. Thirupathi Reddy v. A. P. Co-operative Oilseeds Growers' Federation Ltd. [2000] 4 ALD 1, in which certain petitioners had joined together and had paid only one set of court fee. Those petitioners had been transferred by a single order and the court while disposing of the objection with regard to the court fee held: 'There is no merit on the contention of learned standing counsel for the APOILFED that a single writ petition on behalf of 21 employees is not maintainable, and each petitioner shall pay a separate set of court fee. It is relevant to note that the cause of action to file the writ petition as regards all the petitioners is common. The cause of action is the refusal of the management of APOILFED to treat the petitioners as its employees. Since the writ petition is grounded on a common cause of action and since common relief is sought by all the petitioners, a single set of court fee on behalf of the petitioners is sufficient.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intendents of Excise and Prohibition. In pursuance of the changed excise policy of the State Government, which no doubt had been held to be invalid as referred to supra, the individual applicants made applications and also deposited the demand drafts. Thus it is a common action and a common cause wherein the public at large, the intending participants, participated in pursuance of the aforesaid excise policy of the State Government. The said action being one and common, if the impugned action is held to be bad or illegal, or without authority or jurisdiction, the derivative beneficiaries may be numerous, but however in the light of the clear language employed in rule 4A of the Rules referred to supra, this may not alter the situation in any way. Apart from this aspect of the matter, in the decisions referred to supra, rule 4A of the Rules had not been referred to nor a decision had been rendered considering the language employed in the aforesaid rule. Inasmuch as it is a common cause of action, especially in the light of the impugned proceeding which had been questioned being common, this objection that the individual court fee is payable by each applicant cannot be sustained. In A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been furnished for the reason that jail these applicants are not members of the said association and may be certain of them may be members. But however, there is no clear picture before this court. The submissions in elaboration had been made that because of the non-furnishing of these particulars, serious prejudice is caused to the Income-tax Department to take any specific stand and even in this view of the matter, the writ petition cannot be maintained. In Calcutta Gas Co. (Proprietary) Ltd. v. State of West Bengal, AIR 1962 SC 1044 it was held that the right that can be enforced under article 226 of the Constitution of India shall ordinarily be a personal and individual right to the petitioner himself though in the case of some of the writs like habeas corpus or quo warranto this rule may be relaxed or modified. In Bombay Dyeing and Mfg. Co. Ltd. v. State of Bombay, AIR 1958 SC 328 it was held by the apex court at para. 28: "It is then argued that this is an objection open only to the employees, and that the appellant can make no grievance of it. It is no doubt true that a question as to the constitutionality of a statute can be raised only by a person who is aggrieved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The Central Council of Homoeopathy has also recognised these two colleges. The public interest was not in any manner adversely affected by the impugned decision. The Students Council has now filed an affidavit disclosing its status and its constitution. It does not disclose whether the Council was authorised to file the present litigation, and if so, by whom; whether it has the funds to indulge in this litigation and whether it had the backing of a majority of its members for this litigation. Since on merits also we find that the action must fail, we are not examining these questions any further except for the purpose of indicating that such organisations, without disclosing any material regarding their nature and functions and funding, should not be allowed lightly to undertake litigation in the name of public interest which can cause a lot of damage to others. In the present case, because of the litigation the students have not been able to complete their B.H.M.S. course for a number of years. Pursuant to the interim order these students have been permitted to appear for examinations conducted in December, 1996, and the results have also been declared. We direct that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... injury, but who is not a mere busy body or a meddlesome interloper; since the dominant object of PIL is to ensure observance of the provisions of the Constitution or the law which can be best achieved to advance the cause of community or disadvantaged groups and individuals or public interest by permitting any person, having no personal gain or private motivation or any other oblique consideration but acting bona fide and having sufficient interest in maintaining an action for judicial redress for public injury to put the judicial machinery in motion like action popularis of Roman Law whereby any citizen could bring such an action in respect of a public delict. It will be befitting to recall the observation of this court in People's Union for Democratic Rights v. Union of India [1982] 3 SCC 235; [1982] SCC (L S) 275 which reads thus: 'But the traditional rule of standing which confines access to the judicial process only to those to whom legal injury is caused or legal wrong is done has now been jettisoned by this court and the narrow confines within which the rule of standing was imprisoned for long years as a result of inheritance of the Anglo Saxon system of jurisprudence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f society and in certain circumstances the conduct of Government policies. Necessarily, both the party structure and the matters in controversy are sprawling and amorphous, to be defined and adjusted or readjusted as the case may be, ad hoc, according as the exigencies of the emerging situations. The proceedings do not partake of predetermined private law litigation models but are exogenously determined by variations of the theme.' Though we have, in our country, recognised a departure from the strict rule of locus standi as applicable to a person in private action and broadened and liberalised the rule of standing and thereby permitted a member of the public, having no personal gain or oblique motive to approach the court for enforcement of the constitutional or legal rights of socially or economically disadvantaged persons who on account of their poverty or total ignorance of their fundamental rights are unable to enter the portals of the courts for judicial redress, yet no precise and inflexible working definition has been evolved in respect of locus standi of an individual seeking judicial remedy and various activities in the field of PIL. Probably, some reservation and diver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not have undertaken the onerous duty of adjudicating upon these questions which were required to be decided on merits by the authorities themselves. Only on the short ground and without going into the merits of the controversy between the parties, orders passed by the learned single judge and Division Bench are vacated. Now the show-cause notice will be required to be adjudicated upon on merits. The respondents will be given liberty to file written reply within eight weeks from today. Thereafter the adjudicating authority will decide the question on merits strictly on the basis of evidence led before it without being in any way influenced by the communication dated September 20, 1982, by Superintendent, Central Excise to the respondents or on the basis of any superior authority's order as mentioned in para. 33 of the order of the learned single judge at page 291. We also make it clear that the decision shall be rendered by the adjudicating authority strictly on merits after considering the evidence led before it and without being influenced; whatsoever by the earlier observations of the High court. It is also made clear that if adjudication ultimately culminates against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell settled that when a petitioner invokes the jurisdiction of the High Court under article 226 of the Constitution, it is open to the High Court to consider whether, in the exercise of its undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice. The court always has power to refuse relief where the petitioner seeks to invoke its writ jurisdiction in order to secure a dishonest advantage or perpetuate an unjust gain. This is a case where the High Court was fully justified in refusing relief. On that ground alone, the appeal must fail." Lengthy submissions were made on the ground of bona fides and learned senior standing counsel representing the Income-tax Department would maintain that when the facts are suppressed and when the material is not placed bona fide before the court, definitely such party is not entitled to any relief under article 226 of the Constitution of India. Yet another submission was made that this is not a writ petition filed in a representative capacity nor is it a case of public interest litigation since 1,43,000 applicants are neither the persons who are incapable of pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; a solid central zone of certainty, and a grey outer circle of lessening certainty in a sliding centrifugal scale, with an outermost nebulous fringe of uncertainty. Applicants falling within the central zone are those whose legal rights have been infringed. Such applicants undoubtedly stand in the category of "persons aggrieved". In the grey outer circle the bounds which separate the first category from the second, intermix, interfuse and overlap increasingly in a centrifugal direction. All persons in this outer zone may not be "persons aggrieved".'... In the light of the expanded concept of the locus standi and also in view of the finding of the Division Bench of the High Court that the order of the Excise Commissioner was passed in violation of law, we do not wish to nip the motion out solely on the ground of locus standi. If the Excise Commissioner has no authority to permit a liquor shop owner to move out of the range (for which auction was held) and have his business in another range it would be improper to allow such an order to remain alive and operative on the sole ground that the person who filed the writ petition has strictly no locus standi. So we proceed to consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icence fee payable for the retail shop applied for, the value of the licence fee being fixed at Rs. 2,50,000, Rs. 5,00,000 and Rs. 8,00,000 depending on the area in which the retail shop is located. Whereas it is learnt that a class of persons filed nearly 1,43,000 applications for about 7,500 retail shops all over the State of Andhra Pradesh for which the applications are called for. Whereas it is learnt that the policy of the Government of Andhra Pradesh for awarding contracts for running retail shops selling Indian liquor from the auction system to a lottery system is a subject-matter of a writ filed by the existing shop owners and the matter is presently pending before the hon'ble High Court of Andhra Pradesh. Whereas the undersigned has reason to suspect that large amounts of cash were deposited in various banks from undisclosed sources, to obtain the demand drafts submitted along with the applications and thus it constitutes concealed income. Whereas on a prima facie enquiry, it is opined that a large number of applicants and/or account holders from whose accounts the funds were drawn for obtaining the aforesaid DDs are found to be either benami/fictitious persons and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The specific stand taken by the learned Advocate General representing the State Government is that due to the law and order problem and the other like problems, the State Government is taking such a stand and requesting for early disposal of the writ petition inasmuch as the first respondent had exercised the power purporting to be under section 131 of the Act. Learned senior counsel representing the Income-tax Department though at a particular point of time made certain submissions in this regard this question had not been seriously pursued further. In the light of the language employed in the Constitutional provision referred to supra, this question need not be deeply gone into especially in view of the remoteness of this question and not being directly germane to the present litigation. Hence, this court is not inclined to express any opinion relating to the same in this regard. Pleadings in brief: In the affidavit filed in support of the writ petition, certain details relating to the excise policy in pursuance of which the applications and the deposits by way of demand drafts had been made and also the policy of the State Government which had been questioned in the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 131(1A) of the Act relied upon by the first respondent are confined to gathering of evidence under section 131(1) of the Act and the same cannot be extended to taking custody of an instrument such as a demand draft which is essentially money, and such a power is absent in section 131(1) of the Act. It was further pleaded that the first respondent under the guise of exercise of power under section 131 of the Act cannot take custody of the demand drafts. As a matter of fact the demand draft would not give any information as to the sources of funds of a particular applicant or by what process it was purchased. So long as the first respondent has information of particulars about demand draft which are filled up in the application form in any case, there would be no necessity for the first respondent to take the demand drafts from the custody of the Excise Superintendents. Certain other details also had been averred in paras. 13 and 14 of the affidavit filed in support of the writ petition and ultimately the relief which had been referred to supra had been prayed for. In the counter affidavit filed by the first respondent, several of the aspects had been specifically denied. No d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government by way of demand drafts is of the order of Rs. 1,900 crores, it was opined by the Directorate of this Department that further investigation into the whole aspect is necessary more so in view of the prima facie information received that substantial part of the amount so utilized for demand drafts represented cash deposits made across the counter in the banks. Demand drafts were also obtained in a sum of Rs. 40,000 and to Rs. 49,000 in most of the cases in order to circumvent the instructions issued by the Reserve Bank of India that demand draft for Rs. 50,000 and above cannot be purchased by a cash deposit. In some cases, even that norm was broken by the bankers in issuing demand drafts for more than Rs. 50,000 against cash deposits. In view of the aforesaid facts and circumstances the Directorate of Income-tax Department called upon the Joint Commissioner and Commissioner of Prohibition Excise to furnish photostat copies of the applications and/or in the alternative permit the Income-tax Department to peruse the material by letter dated March 11, 2005. The second respondent replied on March 15, 2005, that the issue was sub judice before this court and that the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the benefit of about 40 applicants and there are many such instances. It was pleaded that it is in this context the pattern of purchasing the demand drafts is also required to be noticed and investigated. In a few cases the demand draft application had been signed by one person while the demand draft had been used for the benefit of another application. In the context of verifying the sources and resources for these demand drafts it is absolutely essential to look at the original demand drafts because there had been a designed process adopted by the applicants or the benamis. It was also further stated that it was understood by the Income-tax Department that quite a good number of applicants are non-existing and their names had been used by vested interests. There is every possibility for existence of quite a good number of benami cases and fictitious persons and it was averred that if the demand drafts are allowed to be returned it would be impossible for the Income-tax Department to unearth the real persons and keeping these aspects in mind the Income-tax Department had invoked the jurisdiction under section 131 read with section 131(1A) of the Act for summoning all the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative and contrastive analysis sought to be made by the petitioners for the purposes of interpreting section 131(1) of the Act is not correct in law. It is not the case of the Department that the demand draft is being seized much less the funds covered by the demand drafts are being appropriated under the impugned communication. It is only for the limited purpose of investigation and for gathering of evidence for effective investigation the demand drafts had been summoned. It is akin to treating of currency involved in a crime and there is absolutely no infirmity whatsoever in summoning of such demand drafts for conduct of effective investigation of an important issue like tax evasion of a huge order. In any event, having regard to the scheme and background of the tendering process evolved by the Excise Department of the State of Andhra Pradesh, the demand drafts cannot be said to be intended to be used as a negotiable instrument and it is not as if the Prohibition Excise Superintendent has got unfettered freedom to encash the demand drafts drawn in his favour at any and every stage. Under the scheme of tendering, all the applicants have to furnish demand drafts for an amount eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the funds had been procured for purchasing of the demand drafts in question. It is depending on the exigencies and warrant further proceedings would be initiated in identified cases under section 132 of the Act or any other provisions of the Act. For the present, the Department would rest content collecting the information and other documents for appropriate investigation as to the sources of the unaccounted funds and unearthing the real persons behind untrue, benami or fictitious applicants. It was further pleaded in para. 15 of the counter affidavit that though averments had been made that funds were borrowed by a few applicants for buying demand drafts the petitioners have not given details of those small merchants much less the cases in which borrowed funds were utilized at higher rate of interest. At any rate the same has no relevance in the context of adjudication of the jurisdictional aspect on the relief required to be granted. However, it is surprising that the petitioner, without specifying the details as to the members of the Association, is espousing the cause of third persons without indicating its authority to represent their case and thus the petitioners appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was further pleaded in para. 18 that the assertion in paragraph 14 that some of the applicants could have been outside the jurisdiction of this respondent authority is not true and correct. The Directorate of Income-tax has got State wide authority and its jurisdiction extends to the entire State. The Deputy Director draws his power and authority only through the Director. It is only after taking the assent of the Director of Income-tax (Investigation) that the first respondent had issued summons under section 131 read with section 131(1A) of the Act. At any rate, at the stage of calling for documents in terms of section 131 of the Act for the purposes of conducting investigation, it is not necessary that the possible assessee should be within the jurisdiction of the first respondent. It was pleaded in para. 19 that the petitioners have not made out a case for invoking the jurisdiction of this court and the real person who is possibly affected by the impugned action is not before this court. None of the applicants who submitted their applications or demand drafts came forward before this court seeking any relief. It is not the case of the writ petitioners that any of the 1,43,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the provisions of section 131(1) and (1A) of the Act. Relevant statutory provisions: The whole theme revolves around sections 131 and 132 of the Act, and in particular section 131 of the Act and the said provisions read as here-under: "Section 131. Power regarding discovery, production of evidence, etc.-(1) The Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner, Commissioner (Appeals) and Chief Commissioner or Commissioner shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely:- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions. (1A) If the Director-General or Director or Joint Director or Assistant Director or Deputy Director, or the authorized officer referred to in sub-section (1) of section 132 before he takes action under clauses (i) to (v) of that sub-section, has reason to suspect that any income has been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,- (A) the Director-General or Director or the Chief Commissioner or Commissioner, as the case may be, may authorize any Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Joint Director or Joint Commissioner, as the case may be, may authorize any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, (the officer so authorized in all cases being hereinafter referred to as the authorized officer) to- (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of which an officer has been authorized by the Director-General or Director or any other Chief Commissioner or Commissioner or any such Joint Director or Joint Commissioner as may be empowered in this behalf by the Board to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorization under sub-section (1), such Chief Commissioner or Commissioner may, notwithstanding anything contained in section 120, authorize the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft. (2) The authorized officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or sub-section (1A) and it shall be the duty of every such officer to comply with such requisition. (3) The authorized officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed or attested. (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) as a result of a search initiated or requisition made before the 1st day of July, 1995, 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 one hundred and twenty days of the seizure, make an order, with the previous approval of the Joint Commissioner,- (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act; (iia) determining the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act, as if the order had been the order of regular assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rize the retention of the books of account and other documents for a period Exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed. (8A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order, except where the authorized officer, for reasons to be recorded by him in writing, extends the period of operation of the order beyond sixty days, after obtaining the approval of the Director or, as the case may be, Commissioner for such extension: Provided that the Director or, as the case may be, Commissioner shall not approve the extension of thee period for any period beyond the expiry of thirty days after the completion of all the proceedings under this Act in respect of the years for which the books of account, other documents, money, bullion, jewellery or other valuable articles or things are relevant. (9) The person from whose custody any books of account or other documents are seized under sub-section (1) or sub-section (1A) may make copies thereof, or take extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d seizure under sub-section (1) or sub-section (1A). (14) The Board may make rules in relation to any search or seizure under this section in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorized officer- (i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available; (ii) for ensuring safe custody of any books of account or other documents or assets seized. Explanation 1.- In computing the period referred to in sub-section (5) for the purposes of that sub-section, any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. Explanation 2.- In this section, the word 'proceeding' means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorized under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. make money, to make a profit; become rich: It is an interesting occupation, but you'll never make money at it. - adj. 15. having access to or controlling large sums of money or financial influence: The wall street money men say the stock market will continue to rise. 16. having, spending, or requiring large sums of money: I wanted to invest in the scheme, but it was a money proposition. 17. of or pertaining to money 18. used for carrying, keeping or handling money: Have you seen my little money purse? moneyless - adj. - Syn. 1. coin, cash, currency, specie, change. 7. funds, capital, assets, wealth, riches. In this context a specific stand had been taken by senior standing counsel representing the Income-tax Department that the demand drafts in the present context are only an "escrow arrangement" and placed strong reliance on a Division Bench decision in Global Trust Bank Ltd. v. Kakatiya Cement, Sugar and Industries Ltd. [2000] 6 ALD 135; [2000] 6 ALT 130, 140 wherein it was observed at paras. 17, 18 and 22 as hereunder: "As seen from exhibit B1 plaintiff deposited an amount of Rs. 200 lakhs in 'escrow' deposit with the defendant in connection with the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the plaintiff, in support of his contention that the relationship between the banker and its constituent is that of a debtor and creditor, are of no help for a decision in this case. The facts in those cases are entirely different from the facts of this case, and the court in those cases was not either considering or deciding the nature of amounts deposited with a banker under an 'Escrow' arrangement. The Supreme Court in Shanti Prasad Jain v. Director of Enforcement [1963] 33 Comp Cas 231 (SC); AIR 1962 SC 1764, held: 'the law is well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not trustee and beneficiary. The banker is entitled to use the moneys without being called upon to account for such user, his only liability being to return the amount in accordance with the terms agreed between him and the customer. And it makes no difference in the jural relationship whether the deposits were made by the customer himself, or by some other persons, provided that customer accepts them. There might be special arrangement under which a banker might be constituted a tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A4 to A6, income-tax deduction certificates also have no relevance for a decision in these proceedings, because as long as the money is lying in deposit in the name of the plaintiff, the defendant is under an obligation, under the provisions of the Income-tax Act, to deduct tax on the interest accrued, and send the same to the Income-tax Department. Therefore, defendant rightly deducted income-tax on the interest accrued and sent Form No. 16A, exhibits A4 to A6 certificates to the plaintiff." Section 29 of the Indian Penal Code defines "document" as: "The word 'document' denotes any matter expressed or described upon any substance by means of letters, figures, or marks, or by more than one of those means intended to be used, or which may be used, as evidence of that matter. Explanation 1.- It is immaterial by what means or upon what substance the letters, figures or marks are formed, or whether the evidence is intended for, or may be used in, a Court of Justice, or not. Illustrations: A writing expressing the terms of a contract, which may be used as evidence of the contract, is a document. A cheque upon a banker is a document. A power-of-attorney is a document. A map or pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was contended that it being just money it would not fall under the expression "document" and hence even on the prima facie reading of the language employed in section 131 of the Act it cannot be said that the first respondent is empowered to issue the impugned proceeding. Whether the impugned order be sustained: In the light of the excise policy of the State Government several applicants made applications along with the demand drafts and in view of the decisions of this court in relation to the said policy holding the same as bad in law, the State Government may have to return the said demand drafts. The investigative agency of the Income-tax Department had entered this fray to the limited extent of unearthing the real persons behind these monetary transactions. Learned senior standing counsel representing the Income-tax Department had placed a lot of material relating to several districts and also produced the statistical data in several cases and meticulously had explained how the applicants who can be said to have made the applications along with the demand drafts are not the real persons and why bona fide the Income-tax Department is suspecting and how the directions issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inction between the powers that have been conferred directly by the Income-tax Act in section 135 and those which have been made available by drawing from sources in another statute, as section 131 makes the powers under the Civil Procedure Code applicable to income-tax proceedings and section 135 refers to an enquiry which is provided for in section 142 and section 135 is a general provision while section 131 is a special provision and the special provision in section 131 have to be given the meaning for the special and limited purpose for which they have been incorporated in the said section. In ITO v. James Joseph O'Gorman [1993] 204 ITR 454 the Division Bench of the Calcutta High Court while dealing with the powers of income-tax authorities to summon for furnishing information and production of documents under section 131 held (headnote): "A plain reading of sub-section (1) of section 131 of the Income-tax Act, 1961, makes it clear that the persons mentioned in the subsection are vested with the powers of a court as provided under the Code of Civil Procedure, 1908. Order XI of the Code of Civil Procedure empowers a court of discovery and inspection under various rules of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bare perusal of the notice it was clear that it had been issued in connection with the assessment year 1990-91. In other words, pursuant to the said notice, the Assessing Officer was entitled to require the petitioner to furnish Such information as might be necessary in connection with ascertainment of income during the accounting year relevant to assessment year 1990-91. However, it was the definite case of the petitioner that the house in question was constructed during the period from 1967 to 1973. While considering the question of ascertainment of income during the period relevant to the assessment year 1990-91 under section 143(3) of the Act, the Assessing Officer could not travel back to the alleged period of construction. The petitioner had produced evidence which strongly suggested that after purchase of the land in 1965, she constructed a portion of the house at least prior to December, 1968 when she was granted electric connection and completed the construction prior to 1974 when the Ranchi Municipality started collecting taxes, etc., with respect to the house. In her return filed for the assessment year 1982-83, the petitioner had declared rental income, allegedly from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its artificial and extended definition of the word "proceeding", proceeding would mean one actually pending and not one completed and concluded. The assessee submitted his income-tax returns for the assessment years 1972-73, 1973-74 and 1974-75. For the assessment years 1972-73 and 1973-74, assessment orders were passed by the Income-tax Officer in March and April, 1975 and the appeals against these orders and further appeals to the Income-tax Appellate Tribunal were all disposed of finally. For the assessment year 1974-75, the assessment proceedings became time-barred in March, 1977. Subsequently, the assessee received from the Income-tax Officer summons under section 131 of the Act calling upon the assessee to furnish information, documents and books of account on various points specified therein in respect of the previous years relevant to the very assessment years 1972-73 to 1974-75. In reply thereto, it was submitted that the assessments for the assessment years 1972-73 and 1973-74 were completed long back in March/April, 1975 and the assessment for the assessment year 1974-75 had become time-barred. Consequently, as no proceedings were pending, there was no question of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchequer and unearthing the benami monetary transactions and to catch hold of the real persons behind the transactions had commenced this move, but it is unfortunate that it has no legal sanction. When power had been exercised by an authority not conferred by law, such action cannot be upheld on the ground that if otherwise held, it would be detrimental to the public exchequer. Courts of law cannot deviate from the specific statutory provisions unless they are otherwise declared to be either invalid or unconstitutional as such. When the first respondent intends to lake shelter under the umbrella of sub-section (1) and sub-section (1A) of section 131 of the Act, it is the bounden duty of the said authority to justify the issuance of the impugned proceeding and to satisfy the court that in law it is permissible for him to do so. In the absence of such justification, on such a ground, the writ court cannot come to the aid of the Income-tax Department in upholding the impugned proceeding under the guise of protecting the public exchequer. Counsel representing the writ petitioners in fact made it clear that the investigative machinery of the Income-tax Department can be well utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X
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