TaxTMI 
TaxTMI 
1971 (11) TMI 44
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.... Flour Mills, Ambala City, which was being run between the period 1st of April, 1956, to the 31st of March, 1957, constituted by five partners except Mrs. Prem Lata, referred to above. This firm had its head office at Ambala and was being assessed by the Income-tax Officer, Ambala, under G.I.R. No. 133-B. The petitioner-firm ceased to carry on the business after 31st of March, 1965, and up to March 31, 1965, all the returns were filed from the 1st of April, 1957, to the end of the assessment year 1965-66. It is further averred that on 7th of June, 1963, the Income-tax Officer, "C" Ward, Ambala, the Income-tax Officer, Special Investigation Circle, Ambala, the Income-tax Officer, "A" Ward, Ambala, and the Income-tax Officer, Ambala, visited the Imperial Flour Mills, Ambala, under the directions of the Commissioner of Income-tax, Punjab, Himachal Pradesh and Jammu and Kashmir at Patiala, along with six inspectors and a posse of police and after surrounding the Imperial Flour Mills, served the letter of authorisations which had been issued in favour of these officers by the then Commissioner of Income-tax, Punjab, Himachal Pradesh, Jammu and Kashmir, at Patiala, in Form No. 45 give....
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....horised under the said sub-section." The learned counsel also sought support from a Division Bench decision of the Allahabad High Court in Seth Brothers v. Commissioner of Income-tax. On the other hand, it was contended by Mr. D. N. Awasthi, learned counsel for the respondents, that section 6 had nothing to do with retrospectivity, that it was only a curing section and that it had been enacted in order to obviate two attacks against searches in which: (a) the authorised officer had associated with himself an unauthorised officer ; and (b) where no proceedings were pending against the assessee either under the 1922 Act or under the 1961 Act (as amended by the 1964 Act). The learned counsel also contended that the decision of the Allahabad High Court in Seth Brothers' case, did not lay down the correct law. After giving my thoughtful consideration to the entire matter, I am of the view that there is considerable force in the contentions of the learned counsel for the petitioners. The short question that requires determination on the respective contentions of the learned counsel for the parties is whether, by virtue of section 6, the provisions of section 132(1) of t....
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....x Act 1965"), with effect from April 12, 1965, which replaced section 132 by a more detailed provision. Sub-section (8) with which we are concerned reads as under: " 132. (8) The books of account or other documents seized under sub-section (1) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained : Provided that the Commissioner shall not authorise the retention of the books of account and other documents for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (XI of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed." Under section 132(1) of the principal Act, an Income-tax Officer specifically authorised by the Commissioner in this behalf was empowered to enter and search any building or place where he had reason to believe that any account books or other documents useful for or relevant to any proceedings under the Act might be found and to seize su....
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.... that a search made under section 132(1) of the principal Act is to be deemed to have been made in accordance with section 132(1) as now substituted. If I accept the contention of the learned counsel for the respondents that section 6 had nothing to do with retrospectivity and that it was only a curing section and had been enacted in order to obviate two attacks against searches mentioned in clauses (a) and (b) of that section, then the words "shall be deemed to have been made in accordance with the provisions of that sub-section as amended by this Act as if those provisions were in force on the day the search was made" would become redundant. Thus, viewed from any angle, I find no escape from the conclusion that the provisions of sub-section (8) of section 132 are applicable to the searches which were carried out under the provisions of the principal Act and that the Income-tax Officer cannot retain the books of account without recording reasons in writing for doing so and without obtaining the approval of the Commissioner for such retention. The view I have taken is fully supported by the Division Bench decision of the Allahabad High Court in Seth Brothers' case wherein it was he....