TMI Blog1997 (9) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed in the Schedule to annexures-1 and 2 to the writ petition and for other suitable orders. On July 26, 1994, the Assistant Commissioner of Income-tax, Central Range-I, came to the place of business of the appellant at about 3.45 p.m. and wanted to conduct a survey under section 133A of the Income-tax Act, 1961, which provides the procedure for survey. The said section provides that the income-tax authorities shall conduct the survey only during business hours and sub-section (4) provides that an income-tax authority acting under the section, shall on no account, remove or cause to be removed from the place wherein he has entered, any cash, any books of account or other documents, stock or other valuable articles or things. In the instant case, the survey was started at 3.45 p.m. on July 26, 1994, and concluded at 5.00 a.m. on July 27, 1994. During the inspection, the Deputy Commissioner of Income-tax, Central Range-I, the first respondent herein was present. During the survey, respondents Nos. 1 to 3 impounded several documents including several pronotes issued in the name of the Hindu undivided family and other partnership firms and took them away. It is contended by Mr. G. Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the pronotes. According to the respondents, at the time of survey, various books of account and documents were impounded under section 131(3) of the Act and certain pronotes were seized by the Tax Recovery Officer-I (Central) Madras, who came to the place of survey later under rule 30 of the Second Schedule to the Income-tax Act. These books of account, documents and the promissory notes were impounded and seized in accordance with the powers vested under the Act and the rules framed therefor. As such there is no violation of any of the provisions of the Act and the rules. They also deny the allegation to the effect that the Assistant Commissioner of Income-tax and the Tax Recovery Officer, the second and third respondents herein, had no authority to be present during the survey. They also deny the other allegations contained in the affidavit filed in support of the writ petition. The Tax Recovery Officer has stated that he has impounded certain documents and account books including 76 pronotes and seized them under rule 30 of the Second Schedule to the Income-tax Act, 1961, after invoking the provisions of section 131 read with sub-section (6) of section 133A of the Act, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the present context : "Section 133A opens with a non-obstante clause. The income-tax authorities may exercise the powers conferred by this section notwithstanding anything contained in any of the other provisions of the Act. The power so conferred is also subject to certain limitations. The power of survey may be exercised only at a place where a business or profession is carried on and the authority may enter any such place of business or profession only during the hours at which such place is kept open for conducting the business or profession, and in case of any other place, i.e., place where the business or profession is deemed to be carried on ; only after sunrise and before sunset. After so entering the premises, the income-tax authority may require the proprietor, employee or other person attending to or helping in the carrying on of business or profession at that place to afford him necessary facility to inspect such documents as the authority may require and which may be available at the place ; to check or verify cash, stock or other valuable article or thing which may be found therein ; and to obtain from such person such information as may be required by the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him on oath, and (c) compelling the production of books of account and other documents, and (d) issuing of commissions, are also conferred on the income-tax authority while carrying out a survey, if the persons connected with the business or profession present at the time of survey, refuse or evade complying with the requisitions made in respect of the matters referred to in section 133A(1). The learned single judge also held in para. 19 of his order that the powers conferred on the authority constituted under the Act are to be exercised having due regard to the nature of the proceeding and all the powers conferred by statute cannot be exercised in all proceedings under the Act. Though section 132 authorises search and seizure and section 131(3) enables the authorities to impound documents produced before them in any proceeding under the Act, those powers cannot be read into the power to carry out survey under section 133A. The object of survey is not the same as of search or seizure under section 132. The power of survey also does not include the power to impound documents as the object of the survey is only to ascertain the existence, nature and contents of documents and valuabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king clause 15 of the Letters Patent. Mr. G. Rajagopalan, learned counsel for the appellant, submitted that the promissory notes that were seized during the survey stands on a different footing. Therefore, the learned single judge ought to have seen that the promissory notes are also documents and the protection given under section 133A(4) is also available to promissory notes. Explaining further, Mr. Rajagopalan submitted that the words used in sub-section (4) viz., "books of account or other documents or any cash or any other valuable article or thing", clearly suggest that promissory note will definitely come within any of the clauses mentioned above, and that since the promissory notes have been unauthorisedly removed during the survey, the learned single judge ought to have directed the respondents to return the same. The arguments of learned counsel for the appellant were countered by learned senior standing counsel for the Income-tax Department by taking us through the counter affidavits filed by the respondents. We have gone through the counter affidavits filed by the respective respondents and also the order passed by the learned single judge which is impugned in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Boards of Revenue Act, 1963 (54 of 1963), (b) Directors-General of Income-tax or Chief Commissioners of Income-tax, (c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals), (cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals), (d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals), (e) Assistant Directors of Income-tax or Assistant Commissioners of Income-tax, (f) Income-tax Officers, (g) Tax Recovery Officers, (h) Inspectors of Income-tax." "Section 2. (7A) 'Assessing Officer' means the Assistant Commissioner or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provisions of this Act, and the Deputy Commissioner who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act." It is argued that the Tax Recovery Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the proceedings of the Assistant Commissioner of Income-tax Department is fully justified under section 133A, as it is necessary that the authorities empowered to authorise action can also remain present at the spot for supervising and doing all that is necessary for the purpose of the Act. Therefore, the presence of the Tax Recovery Officer, the third respondent herein was also perfectly valid and justified by virtue of the powers vested in him under the Second Schedule to the Income-tax Act, 1961. As rightly pointed out by the learned single judge, the promissory notes were seized during the survey, the seizure of the promissory notes stand on a different footing. Those promissory notes being negotiable instruments had been attached by the Tax Recovery Officer by issuing an order of attachment under rule 30 of the Second Schedule to the Act, pursuant to a certificate for recovery of taxes due from the petitioner/appellant herein. In our opinion, though the Tax Recovery Officer was present at the time of the survey, along with the other officers, it was pursuant to a certificate for recovery of taxes, and he is entitled to issue an order of attachment under rule 30 of the Seco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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