TaxTMI 
TaxTMI 
1987 (4) TMI 8
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....2 of 1970, informing each of them that his attendance was required " in connection with a proceeding under the Income-tax Act in the case of Aruna Estate Limited " to give evidence either personally or through an authorised representative, the books of account and other documents specified and not to depart until permitted to do so, in the respective letters dated June 19, 1968. It was also mentioned that " If you intentionally omit to so attend to give evidence, a fine up to Rs. 500 may be imposed upon you under section 131(2) of the Income-tax Act, 1961 ". Each of these persons, i.e., Sri Gopal Das Gupta and Sri Ranendra Chandra Roy, by separate letters, raised various objections and in the course of that correspondence, by letter dated June 24, 1968, each of them asked for information regarding " legal powers " to require attendance although " you are not an assessee of mine " as was mentioned in the letter of the Assistant Director of Inspection dated June 22, 1968. Then only, by a letter dated June 25, 1968, the Assistant Director of Inspection said " I am to inform that I called you to appear before me in terms of the summons issued under section 131 of the Income-tax Act, 19....
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....ommissions. (2) Without prejudice to the provisions of any other law for the time being in force, where a person to whom a summons is issued either to attend to give evidence or produce books of account or other documents at a certain place and time, intentionally omits to attend or produce the books of account or documents at the place or time, the income-tax authority may impose upon him such fine not exceeding five hundred rupees as it thinks fit, and the fine so levied may be recovered in the manner provided in Chapter XVII-D. (3) Subject to any rules made in this behalf, any authority referred to in sub-section (1) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act : Provided that an Income-tax Officer shall not (a) impound any books of account or other documents without recording his reasons for so doing, or (b) retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Commissioner therefor. 135. The Director of Inspection, the Commissioner and the Inspecting Assistant Com....
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....35 of the Income-tax Act, 1961, for the proposition that it confers on the Director and other authorities mentioned therein all the powers of an Income-tax Officer to make any enquiry under the Act and such enquiry must necessarily involve summoning of witnesses and production of material books or documents. The learned trial judge, K. L. Roy J., overruled the contentions advanced on behalf of the Department by holding that the question raised was not entirely one of construction of the relevant section of the Act. He held that the authority to issue the impugned notice is sought to be derived from section 131 which section specifically empowers the four authorities mentioned therein to exercise the powers vested in a court under the Civil Procedure Code. Section 135, inter alia, gives the Director all the powers of the Income-tax Officer to make any enquiry under the Act, but section 131 does not specifically deal with any enquiry under the Act though it authorises taking of certain steps to facilitate such an enquiry. Further, the learned trial judge was inclined to agree with the contention raised on behalf of the petitioner that when section 135 speaks of the power of an Incom....
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....appeared on behalf of the respondents. Arguments advanced in both the appeals have been the same and we shall deal with these judgment in this statute for disposing of both the appeals. Mr. Pal, for the appellant, in Appeal No. 129 of 1971, adhered to the same contentions that were raised for the Department before the learned trial judge and only in elaboration Mr. Pal drew our attention to the definition of Director of Inspection as it appears in section 2, sub-section (21), to show that the definition includes the Additional Director of Inspection, Deputy Director of Inspection, and also Assistant Director of Inspection. The learned counsel also drew our attention to section 116 which mentions the income-tax authorities in six categories: (a) the Central Board of Revenue, (b) the Director of Inspection, (c) Commissioners of Income-tax, (d) Assistant Commissioners of Income-tax, (e) Income-tax Officers and (f) Inspectors of Income-tax. Next, Mr. Pal referred to section 117 to show how appointment of income-tax authorities are made, particularly emphasis was put by Mr. Pal on section 120 which deals with the jurisdiction of Directors of Inspection and is in these words: "Directo....
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....ent in the case of Jain Brothers v. Union of India [1970] 77 ITR 107. In furtherance of this contention, Mr. Pal also referred to section 297 of the Income-tax Act, 1961, and the decision of the Supreme Court in the case of Kalawati Devi Harlalka v. CIT [1967] 66 ITR 680. Reference was also made by the learned counsel to the decision of the Supreme Court in the case of CIT v. Singh Engineering Works P. Ltd. [1970] 78 ITR 90. We do not feel the necessity of going into the detailed facts of the cases cited by the learned counsel except that we may at once point out that the decision of the Supreme Court, turning on section 297(g) of the Income-tax Act, was in a case in which the provision that was held to be per se unnecessary but added by way of abundant caution was not provision of legislative enactment by Parliament but was by an order made by the Executive Government on the authority of a section in the statute. That distinction has to be kept in mind for considering the matter of the loud fact that an amendment of section 131 of the Income-tax Act has been carried out by Parliament in 1965 by adding the Inspecting Assistant Commissioner, although that officer would have power co....
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.... the powers as are vested in the court under the Code of Civil Procedure ", and that is why the insertion of " Inspecting Assistant Commissioner " in section 131 by amendment in 1965 was felt necessary although that category of officer has been mentioned in section 135. There is great force in the contention on behalf of the respondents before us that if section 135 has conferred by these general words also the specific powers mentioned in section 131, then the amendment of section 131 in 1965 would have been unnecessary and that is in our view, quite enough reason for rejecting the contention raised on behalf of the Department. We also accept the view of the learned trial judge that by weighing the two sections 131 and 135, it appears clear that section 135 is a general provision while section 131 is a special provision and the special provision will have to be given the meaning for the special and limited purpose for which the provision has been incorporated in the section. Again, on examining section 142, it cannot be missed that while taking the provision from the old section 22(4) of the Act of 1922, certain improvements appear to have been made. Most important of them is the....
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....s will be available to that particular officer. Mr. Pal tended to make the point that the petitioners who are the respondents before us had not challenged the impugned notice or summons on the ground that there was no such assignment under section 120. In doing so, in our view, Mr. Pal was really not following the logic of events. During the controversy by correspondence, the petitioners who are the respondents before us had sought for information as to the legal authority and in answer they were only told about the legal proceeding by pointing to section 131 of the Income-tax Act. It was never contended by the officer or Department that during that correspondence or even in their affidavit in opposition at the trial stage they were under the authority of section 135 or for that matter under the authority of any assignment of function under section 120. That being so, there was no occasion for the petitioner to challenge any imaginary contention that will be raising a Frankenstein only to slay the demon. What is more important is that even in their affidavit-in-opposition in paragraph 9, the Department said only this in paragraph 7 at page 29: " I deny and dispute the correctness ....