TMI Blog2000 (5) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... o the search and seizure carried out under the provisions of section 132(1) and the summons issued under the provisions of section 131(1A) and the notices under section 158BC of the Act be quashed. We have heard the learned advocate, Shri K. A. Puj, appearing for the petitioners, and the learned advocate, Shri B. B. Naik, appearing for the respondent authorities. At the time of hearing of these petitions, the learned advocate, Shri Puj, has firstly submitted that the search and seizure operations initiated against the petitioners under the provisions of section 132(1) of the Act were not valid and legal for the reason that the Director of Income-tax (Investigation), who had issued authorisations for the purpose of search, had not applied his mind before issuance of the authorisations and he was not having any material for issuance of authorisations. Moreover, he had not recorded any reason for issuance of the authorisations and, therefore, the entire proceedings initiated under the provisions of section 132 of the Act are invalid and illegal. He has relied upon the decisions rendered in the cases of Madhya Pradesh Industries Ltd. v. ITO [1970] 77 ITR 268 (SC) ; Janak Raj Shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 132 of the Act. The learned advocate, Shri B. B. Naik, has also submitted that as per the normal practice, when the notes were placed before the Director of Income-tax (Investigation), the material which is referred to in the note was also placed for his perusal so that upon perusal thereof, he can express his satisfaction and do the needful for the purpose of issuance of authorisation. If this is the normal practice, there is no reason for us to believe in this case, that the normal practice was not followed by the authorised officers and the relevant material was not produced before the Director of Income-tax (Investigation). Upon a perusal of the relevant record, we are of the view that there was sufficient material with the Director of Income-tax (Investigation) for issuance of the warrants of authorisation for carrying out the search and seizure operations against the petitioners. By no stretch of imagination it can be said that there was no application of mind on the part of the Director of Income-tax (Investigation). Upon the perusal of the comprehensive notes, it is also revealed that there was sufficient application of mind not only on the part of the Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax (Investigation) for being satisfied for issuance of warrants of authorisation against the petitioners, Shri Puj, the learned advocate for the petitioners, has submitted that the affidavit of the Director of Income-tax (Investigation) has not been filed in the instant case. In our opinion, as an affidavit has been filed by a responsible officer after perusal of the record and when the original record was also perused by the court, we do not think it necessary that the Director of Income-tax (Investigation) ought to have filed an affidavit to support his case. Shri Puj has also relied upon the judgment delivered in the case of Janak Raj Sharma v. Director of Inspection (Investigation) [1995] 215 ITR 234 (P H), to substantiate the above referred submissions. It has been submitted by him that if there is no information in the possession of the concerned authority on the basis of which warrant of authorisation is issued, search and seizure carried out in pursuance of such an authorisation would not be valid. The said proposition cannot be disputed, but the facts in the instant case are different. As stated hereinabove, the relevant notes were submitted to this court for its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Investigation), with regard to undisclosed income of the petitioners and, therefore, warrants for authorisation cannot be treated as invalid or illegal. For the reasons stated hereinabove, we are of the view that it cannot be said that the Director of Income-tax (Investigation) had issued the warrants of authorisation without having any information with him and without any application of mind. In our opinion, the submission of the learned advocate for the petitioners that the search and seizure proceedings are illegal is not proper and, therefore, is not accepted by us. The learned advocate, Shri Puj, has submitted that the notices and summons issued under the provisions of section 131(1A) of the Act are bad in law and while issuing the said notices and summons, the officer issuing the summons had exceeded his jurisdiction. Section 131(1A) of the Act reads as under : "131. (1A) If the Director-General or Director or Deputy Director or Assistant Director, or the authorised 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 concealed, or is likely to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of section 132 of the Act. In our opinion, it would be absolutely logical to call for information so as to have better particulars or to have a complete idea about the material seized during the search. If some material is. seized at the time of the search and the authorised officer wants to have some details so as to understand the nature of the documents, he may issue notice under section 131(1A) of the Act. In our opinion, in a given case such a notice cannot only help the Department but can also help the assessee. If the assessee is in a position to give more explanation so as to satisfy the authorised officer that the documents seized by him do not reveal any undisclosed income, but the income or transactions referred to in the documents had been duly shown by him in his books of account or if the assessee gives any information to the effect that the first impression of the authorised officer with regard to the nature of the documents was not correct, we are sure that such a notice would help the assessee himself. If the assessee is called upon to give some information or to explain certain documents or writings seized during the process of search, in our opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of 15 days from the conclusion of such search. All such powers exercisable by the authorised officer under section 132(8) or 132(9) shall be then exercised by such Income-tax Officer having jurisdiction over the assessee. In the instant case, as the authorised officer is also an officer having jurisdiction over the assessee, in our opinion, it is not necessary for him to part with the material seized as per the provisions of section 132(9A) of the Act. So far as the judgment delivered in the case of Dr. C. Balakrishnan Nair v. CIT [1999] 237 ITR 70 (Ker) is concerned, the facts of the said case cannot be compared with the facts of the present case for the reason that in that case the authorised officer did not part with the record within a period of 15 days. Moreover, unnecessarily the search proceedings had been delayed. It was also found in the said case that the retention of the documents and record by the authorised officer was contrary to the provisions of the Act whereas in the instant case the facts are absolutely different. In the instant case, the authorised officer is having jurisdiction over the assessee. There is no allegation that without justifiable reasons the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, in the instant case, the said reasons have been communicated to the petitioners along with the affidavit in reply which have been placed on the record of the court but have not been directly communicated to the petitioners. We do not find any substance in the above submission made by the learned advocate, Shri Puj, because the purpose for which the said section is enacted has been served when the petitioners have been informed about the reasons for which the documents were permitted to be retained by the concerned officer beyond the period of 180 days. It is open to the petitioners to challenge the validity of the said reasons in an appropriate proceeding. The intention of the Legislature to enact the provision in the section with regard to the communication of the reasons is normally to see that the officer passing the order applies his mind and states the reasons for acting in a particular manner so that the higher authority can look into the validity of the reasons recorded by the concerned officer. It is pertinent to note that the section nowhere provides for communication of the reasons but the learned advocate, Shri Puj, has relied upon the judgment delivered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons were not furnished at an earlier stage and more particularly when the reasons have been now communicated to the petitioners. The learned advocate, Shri Puj, has also relied upon the judgment delivered in the case of Thanthi Trust v. CIT [1987] 167 ITR 397 (Delhi). As per the law laid down in the said judgment, it is very clear that if the documents are retained beyond the period of 180 days from the date of seizure without obtaining permission from the Commissioner, the seizure of the documents is bad in law. As stated hereinabove, in the instant case, as necessary permission was obtained from the Commissioner for the purpose of retaining the material beyond the period of 180 days, we do not think that this judgment is applicable in the instant case. In the case of Tin Box Co. v. ITAT [1990] 185 ITR 630 (Delhi), a similar view was taken by the Delhi High Court. In that case, necessary permission under section 132(8) was not obtained by the concerned officer. In the instant case, as the necessary permission has already been obtained and as the reasons have already been recorded by the Commissioner of Income-tax, we do not think the said judgment is relevant. Similarly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were transferred from Bhavnagar to Rajkot and, therefore, at present the petitioners do not press the said point in these petitions. We, therefore, do not deal with the said contention raised in the petitions. It is pertinent to note here that the petitions have been filed at a belated stage. Though the search and seizure proceedings had taken place in January, 1999, these petitions have been filed in the month of April, 2000. Normally, a vigilant litigant would rush to the court immediately if his right is violated. In the instant case, the petitioners are neither illiterate nor persons without means. They have availed of services of competent lawyers throughout the search proceedings and, therefore, it cannot be said that they did not know the legal provisions or did not know whom to approach for the purpose of redressal of their grievances. Moreover, the petitioners have made absolutely incorrect statements to the effect that without recording any reason or without any application of mind the search proceedings had been initiated. Upon the perusal of the original record and the affidavit filed by the respondent authorities it is very clear that the said statements have been m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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