TMI Blog1984 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... 1972-73. On March 3, 1982, the 7th respondent, under the purported instructions of respondents Nos. 5 and 6, made a search under s. 132 of the I.T. Act (hereinafter referred to as " the Act ") simultaneously at No. 2/D, S. V. Lingam Salai, K. K. Nagar, Madras-78, H.I.G. Flat Site, Ashok Pillar Road, K.K. Nagar, Madras-78, and at the open plot in Jeevanandam Street, K.K. Nagar, Ashok Nagar, Madras-83. In respect of the seizure, a panchanama was prepared and given to the petitioner. While searching the premises at No. 2/D, S. V. Lingam Salai, K.K. Nagar, Madras-78, the 7th respondent had locked up one room with the petitioner's records and served a prohibitory order on the petitioner under s. 132(3) of the Act. Similarly, the residence of the petitioner at Seelanaickenpatti, Salem, was searched and in that house, a steel almirah was sealed and a prohibitory order under s. 132(3) of the Act was given to the petitioner. After the search, a panchanama was prepared and the same was served upon the petitioner. The 7th respondent has further served a prohibitory order under s. 132(3) of the Act to the various banks whereby the petitioner was not allowed to operate either the savings bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re has become ineffective. Under s. 132(9A) of the Act, according to the petitioner, respondents Nos. 5 to 7, who had seized the materials, should have handed over all the materials seized from the petitioner within 15 days of such seizure. In this case, the documents and assets seized from the petitioner have not been handed over by the 7th respondent to the 1st respondent within 15 days from March 4, 1982. The seizure of the documents and other records having been made on March 3, 1982, and March 4, 1982, the retention of the documents any further has become illegal since the authorities concerned ought to have passed orders under s. 132 of the Act within 90 days from March 4, 1982. Even assuming that the seizure was completed on September 30,1982, the petitioner submits, there is a clear violation of s. 132(5) of the Act. The petitioner has further contended that as per s. 132(8) of the Act, the books of account and other documents seized shall not be retained for a period exceeding 180 days from the date of seizure unless the reasons for retaining the same are recorded in writing by the officer who seized the same and the approval of the Commissioner for such retention is obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs will be the concealed income from 1973 to 1983. The respondents then stated that they have released the fixed deposit receipts which were kept under the prohibitory orders, and that the prohibitory order issued with regard to the almirah at the petitioner's native place was lifted on March 4, 1982, itself. The respondents have further stated that the petitioner has been given adequate opportunity to inspect the records and the petitioner cannot insist on all the documents and records seized from him to be released forthwith because they are required for further scrutiny in the course of investigation. That is why, according to the respondents, the Commissioner of Income-tax has been periodically extending the time-limit for keeping the documents and papers seized in the custody of the Department. It is further contended by the respondents that the delay in the matter of investigation and enquiry is wholly due to the petitioner's delaying tactics and wanton non-co-operation with the Department and his refusal to furnish the requisite particulars. The current account of the petitioner was not put under prohibitory orders and the petitioner was allowed to operate the same. The pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were again required to co-ordinate further investigations under s. 132 of the Act, they were taken back from the ITO for that purpose, and that, consequently, there is no infringement of the provisions of s. 132(9A) of the Act as alleged by the petitioner. The respondents have further reiterated that the time-limit of 90 days provided under s. 132(5) of the Act when assets are actually seized under s. 132(1) or s. 132(1A) of the Act will not apply to this case. It has been specifically averred by the respondents in their counter-affidavit that the approval of the Chief Commissioner of Income-tax has been taken, for the retention of the books, from time to time. As the investigation has been impeded by the action of the petitioner and/or the non-co-operation of the petitioner and/or the interlocutory orders of this Hon'ble court, according to the respondents, the petitioner cannot make any grievance by raising the question of retention of the books in excess of the specified period. According to the respondents, if the seized books and records are handed over to the petitioner at this stage, there is every reason to apprehend that the petitioner will either tamper with them or cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. He further contended that the present value of the assets cannot be taken into consideration but their value as on the date of their acquisition alone has to be taken into consideration and that if the matter is looked at from that angle, there cannot be any question of excess investment. Finally, the petitioner prayed that the writ petitions may be allowed since there is an inordinate delay in completing the assessment. W.P. No. 181 of 1983 is for the issue of a writ of mandamus directing the respondents to return all the seized materials to the petitioner immediately including the fixed deposit receipts, etc., covered by the prohibitory orders to the banks. The facts of the case clearly reveal that the seizure was made as early as March 3, 1982, and March 4, 1982. It is unnecessary to repeat the facts of the case once over again since I have already extracted them in paragraphs supra. Section 132(5) deals with the procedure as to how any money, bullion, jewellery or other valuable article or thing is to be seized under sub-s. (1) or (1A) of s. 132 of the Act. Here, the seized materials will not fall under the category mentioned in s. 132(5) but will come under s. 132(8) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection to utilising the officers of the Intelligence Wing outside the present Commissioner's charges if an important case arises and it is necessary to do so in the interests of Revenue. This may be done only when the case is very important and you consider it necessary in the interests of Revenue." Thus, it is clear that the jurisdiction of the officers of the Intelligence Wing over the persons will be co-extensive with that of the Commissioner's charge in which the wing is located. Therefore, when an Assistant Director of Inspection is authorised by the Commissioner under s. 132(1)(a) of the Act to conduct a search, it would follow that such an Assistant Director of Inspection would also be the Authorised Officer having jurisdiction over the person subjected to search within the meaning of s. 132(8) of the Act. Hence, the 7th respondent can perform all the functions under sub-ss. (8) and (9) of s. 132 of the Act in his capacity as the Authorised Officer having jurisdiction over the person referred to in clause (a) or (b) or (c) of subsection (1) of s. 132 of the Act without prejudice to the power of the ITO who his jurisdiction under s. 124 of the Act over the persons subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents were seized and who objects to the reason recorded by the Commissioner for extending the time under s. 132(8) of the Act, may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books Of account or other documents. As far as the present case is concerned, the seizure of the documents was made on March 3, 1982, and March 4, 1982. The 7th respondent has put in an application to the 4th respondent for the retention of the books and documents impounded for period extending 180 days, as per s. 132(8) of the Act. The reason given for obtaining the extension is for conducting a detailed investigation. The 4th respondent allowed the retention of the documents until March 31, 1983. In this application made on August 23, 1982, it has been specifically mentioned that the documents were seized on March 3, 1982. The approval for extension was granted by the 4th respondent on August 27, 1982. In CIT v. Oriental Rubber Works [1983] 145 ITR 477 (SC), a three judges Bench of the Supreme Court had an occasion to deal with s. 132(8) read with s. 132(1) of the Act. The Supreme Court, after extracting s. 132(8), (10) and (12) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard, pass such orders as it thinks fit. It is obvious that without the knowledge of the factum of the Commissioner's approval as also of the recorded reasons on the basis of which such approval has been obtained, it will not be possible for the person to whom the seized books and documents belong to make any effective objection to the approval before the Board and get back his books or documents. In our view, the scheme of sub-ss. (8), (10) and (12) of s. 132 makes it amply clear that there is a statutory obligation on the Revenue to communicate to the person concerned not merely the Commissioner's approval but the recorded reasons on which the same has been obtained and that such communication must be made as expeditiously as possible after the passing of the order of approval by the Commissioner and in default of such expeditious communication any further retention of the seized books or documents would become invalid and lawful. It is obvious that such obligation arises in regard to every approval of the Commissioner that might have been accorded from time to time. In the result, the orders passed by the High Court directing the return of the seized books of account and docu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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