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TMI Blog2024 (11) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner were also covered. During the course of search, various documents including the original title deeds of the properties of the petitioner were seized under section 132 (1) of the Act by order dated 10.10.2020. Thereafter, the respondent-authorities provisionally attached 17 properties of the petitioner under section 132 (9B) of the Act by order dated 17.11.2020. Three assessment orders were passed for the Assessment Years 2017-18 to 2020-21 in the month of March 2022. Being aggrieved, the petitioner preferred Appeal before the CIT (A). The Principal Commissioner of Income Tax - respondent No.3 by order dated 23.11.2022 granted conditional stay to the petitioner directing the petitioner to pay total amount of Rs. 7,73,52,000/- as against the demand of more than Rs. 100 Crore raised by the Assessing Officer. 4. It is the case of the petitioner that the petitioner deposited part of the said amount belatedly and as the petitioner wanted to make further payment, a request was made to return the original seized documents so as to enable the petitioner to sale the property and make the payment of the outstanding demand. 5. The petitioner also made an application under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of the appeal proceedings. It was therefore submitted that now the appeal proceedings before the CIT (A) are over and the respondent authority therefore are required to return the books of accounts and the other documents. In support of her submissions reliance was placed on the following decisions: * CIT vs. Oriental Rubber Works (1983) 15 Taxman 51 (SC); * Cowasjee Nusserwanji Dinshaw vs. ITO (1987) 165 ITR 702; * Madhupuri Corporation vs. S.S. Khan (2001) 250 ITR 656; * Tin Box Co. vs. ITAT (1990) 14 Taxman 261. 11. On the other hand, learned Senior Standing Counsel Mr. Patel submitted that the respondent-authorities have followed the provisions of section 132 (8) of the Act by recording the reasons and as per the reasons recorded by the respondent-authorities, books of accounts and other documents are required to be retained upto 30.04.2025. It was further submitted that as on today, the outstanding demand is of Rs. 4,27,17,403/- and the respondent-authorities are contemplating to challenge the order passed by the CIT (A) before the Tribunal. 12. It was therefore submitted that when there is approval for retention of the books of accounts till 30.04.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-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." 15. On perusal of the above provision, it is clear that the respondent-authorities are required to return the books of accounts and other documents within 30 days from the date of passing of the assessment order to the petitioner unless the reasons are recorded in writing for retention of the same with the approval of the higher authority specified in the said provision. 16. On perusal of the facts on record, it is apparent that the respondent-authorities have never communicated the reasons recorded to the petitioner and as such, the petitioner was not aware about the reasons for retention of the books of accounts and other documents which has prevented the petitioner from raising the objections before the Central Board of Direct Taxes as provided under sub-section (10) of section 132 of the Act which reads as under: "Section 132 (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 [Principal Chief Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit." On a plain reading of the aforesaid provisions it will be clear that ordinarily the books of account or other documents that may be seized under an authorisation issued under sub-sec.(1) of sec.132 can be retained by the authorised officer or the concerned Income-tax officer for a period of one hundred and eighty days from the date of seizure, whereafter the person from whose custody such books or documents have been seized or the person to whom such books or documents belong becomes entitled to the return of the same unless the reasons for any extended retention are recorded in writing by the authorised officer/the concerned Income Tax Officer and approval of the Commissioner for such retention is obtained. In other words two conditions must be fulfilled before such extended retention becomes permissible in law: (a) reasons in writing must be recorded by the authorised officer or the concerned Income-tax Officer seeking the Commissioner's approval and (b) obtaining of the Commissioner's approval for such extended retention and if either of these conditions is not fulfilled such extended retention will become unlawful and the concerned person (i.e. the person from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after analyzing the provisions of section 132 of the Act and conjoint reading of the provisions of sub-sections (8), (10) and (12) held "that the assessee must be communicated reasons recorded by the Authorized Officer on the basis whereof the Commissioner granted necessary approval". Thereafter, considering the decisions of the Hon'ble Apex Court in case of Oriental Rubber Work (supra) it was held that failure to communicate the reasons recorded would render further retention of the account books and documents seized udder sub-section (8) of section 132 illegal, invalid and unlawful. 19. In case of Madhupuri Corporation (supra) it was held as under: "10. Upon hearing the learned advocates, we had specifically asked learned advocate Shri Naik appearing for the respondent authorities about the reasons for which the respondent authorities wanted to retain the books of account and other material beyond the period of 180 days. It was impressed upon him that the respondent authorities must have a sound reason for further retention of the books of account and other material belonging to the assessees. Upon perusal of the reasons stated in the application given by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should accord his approval to the authorised or Assessing officer as and when he makes a request for retention of the books of account or other material beyond the period of 180 days. In the circumstances, looking to the facts of the case, we hold that the reasons which have been recorded by the Assessing Officer do not appear to be just and proper as there is no logic behind the retention of the books of account and other material till the entire block assessment is over. The respondent authorities can very well take out copies of the documents required by them and can do the needful with the help of the said copies. It is always open to the respondent authorities to ask the petitioners to return the original documents in case of need." 20. The Delhi High Court in case of Metal Fittings (P.) ltd (supra) in similar facts has held as under: "7. In our opinion, the period of 180 days prescribed by the sub-section is mandatory. It is not directory. A plain reading of the sub-section suggests that the books of account seized shall not be retained by the authorised officer for a period exceeding 180 days form the date of the seizure unless two things are done before the expiry of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manner and within the time prescribed. The requirement as to the time of exercise of the power is mandatory." 21. In view of the above conspectus of law and considering the facts of the case as well as further development which has taken place during the pendency of this petition in form of passing of the order by the CIT (A) granting substantial relief to the petitioner reducing the demand by more than Rs. 90 Crore, we are of the opinion that the respondent-authorities are not justified in continuing the retention of books of accounts and other documents contrary to the provision of section 132 (8) of the Act and the petitioner is entitled to receive the same forthwith from the respondent-authorities. 22. In view of the foregoing reasons, this petition succeeds and the respondent-authorities are directed to return the books of accounts and other documents seized during the course of search under section 132 (1) of the Act forthwith. However, if the respondent-authorities are desirous to retain the copies of such books of account and other documents, the same shall be provided by the petitioner prior to receipt of the original documents with an undertaking to be filed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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