TMI Blog1980 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act (hereinafter referred to as " the Act ") to seize the money. It issued notice to the petitioner to explain the source of the money. After the money was seized, the case was assigned by respondent No. 1 to respondent No. 2, as the petitioner, from the material available with respondent No. 1 up till that time, was shown to be a resident of Jullundur. Respondent No. 2 sent notices to the petitioner, out of which one was served on him by way of affixation on 14th of February, 1967, and the other on 16th of February, 1967, through the postal authorities. The petitioner then through his counsel entered appearance before respondent No. 2 on the 7th of April, 1967, and made some applications. The petitioner filed an application under s. 124(4) of the Act, questioning the jurisdiction of respondent No. 2, on 14th of April 1967, and addressed it to respondent No. 1. This is annex. V to the petition Note No. 2 at the foot of annex. V shows that its copy had been endorsed to the Commissioner of Income-tax, Delhi. On 19th of April, 1967, the petitioner sent a similar application, annex. U to the petition, to respondent No. 2 intimating him about his application to respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the concerned authorities before the assessment was finalized by respondent No. 2. The learned counsel for the petitioner, relying on H. L. Sibal v. CIT [1975] 101 ITR 112 (P H), argued that the information with the Commissioner, before he elected to act under s. 132(1) of the Act for issuing the search and seizure warrant, if not precise and definite, must be such, on which a reasonable and prudent mind could form a conclusion in favour of issuing the warrant. He referred to the observations of the learned judges deciding this case at page 131, where the purport and extent of such an information has been dealt with. With fairness to the learned counsel for the petitioner, I may state that the facts of H. L. Sibal's case [1975] 101 ITR 112 (P H) were different from the facts of the case in hand. In that case, there was no definite information about the precise nature of the things to be recovered by search and seizure. In the case in hand, the money had also been recovered by the customs authorities and the amount involved is of a sizable quantity. The I.T. authorities on that information were within their rights to ask the petitioner to explain the source of his acquisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by way of affixation on 14th of February, 1967, and the time-limit ran out after thirty days. On this basis, Mr. Awasthy urged that the petitioner had lost that right and as the time had run out against him, he could not, on 14th of April, 1967, move this application. For a proper and better appreciation of the rival contentions raised before me, it is appropriate to reproduce the provisions of ss. 124 and 132 of the Act in extenso. These run as under: "124. (1) Income-tax Officers shall perform their functions in respect of such areas or of such persons or classes of persons or of such incomes or classes of income or of such cases or classes of cases as the Commissioner may direct. (2) Where any directions issued under sub-section (1) have assigned to two or more Income-tax Officers, the same area or the same persons or classes of persons or the same incomes or classes of income or the same cases or classes of cases, they shall have concurrent jurisdiction and shall perform their functions in relation to the said area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, in accordance with such general or special orders in writi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under subsection (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the Director of Inspection or any other Commissioner of any such Deputy Director of Inspection or Inspecting Assistant 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 authorisation under sub-section (1), such Commissioner may, notwithstanding anything contained in section 121, authorise the said officer to take action under any of the clauses aforesaid in respect of such building place, vessel, vehicle or aircraft. (2) The authorised officer may requisition the services of any police officer or 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 authorised 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, serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (1 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 ; (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts, referred to in clauses (ii), (iia) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized: Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having jurisdiction over such person within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Income-tax Officer. (10) If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub-section (1A) objects for any reason to the approval given by the Commissioner under sub-section (8), he 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. (11) If any person objects for any reason to an order made under subsection (5), he may, within thirty days of the date of such order, make an application to such authority, as may be notified in this behalf by the Central Government in the Official Gazette (hereinafter in this section referred to as the notified authority), stating therein the reasons for such objection and requesting for appropriate relief in the matter. (12) On receipt of the application under sub-section (10) the Board, or on receipt of the application under sub-section (11), the notified authority, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded by the concerned ITO. The language of s. 124(4) is mandatory and leaves no option to the concerned authorities, but to decide the application for transfer and makes it obligatory, upon them, in case that application was not decided. Mr. Awasthy has, as referred earlier, asserted that by virtue of s. 124(5), the objection was not raised within one month from the date of notice and it could not be raised later. perusal of s. 124(5) shows that it embraces only ss. 139 and 148 of the Act in its ambit. Section 132(5) is not mentioned in it. The omission of reference to s. 132(5) from s. 124(5) is not accidental. It is a deliberate omission and the reasons for this inference about the legislative intent are not far to seek. A closer study of s. 132 of the Act shows that it has the trappings of a small code in itself. It concerns with search and seizure and also provides a machinery as well as the procedure in its provisions for determining the tax liability or other ancillary matters of interest to the revenue, when such seizures are effected. As earlier stated, the proceedings under s. 132(5) are of a quasi-judicial nature, and the matters have to be determined after affording ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32(5). It was then argued by Shri Awasthy that the petitioner had submitted to the jurisdiction of respondent No. 2, and he could not raise this objection after such submission. A specific statutory provision of the I.T. Act gives the person who is arrayed before the ITO for certain assessments, a right to question his jurisdiction. Such a right cannot be taken away by the simple acquiescence of the person in submitting to that jurisdiction. Before the proceedings are finally decided, such an objection can be raised at any time. The assessment proceedings had not yet made any specific headway, when the application, annex. " V ", was filed by the petitioner. It required to be decided expeditiously by the Commissioner, Patiala, himself or in consultation with the Commissioner, Delhi, to whose jurisdiction the objection of the petitioner related. The mere fact that at one or more than one occasion the petitioner had given his address as " 219, Model Town, Jullundur ", does not bind him permanently to that address. For certain circumstances or in the quest of the business one can change his address to a place which is convenient to him and raise an objection taking shelter under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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