TaxTMI 
TaxTMI 
2006 (12) TMI 111
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....rit petition. The Income-tax Department having not returned the impounded documents even after several requests were made by the petitioner and more than five months having elapsed after the impounding, the petitioner has approached this court praying for issuance of a writ in the nature of certiorari and for quashing the impugned order at annexure C and holding that the entire proceedings of survey conducted as on June 22, 2006, at the premises belonging to the partnership firm were not in accordance with law and that it was not duly authorized; that the respondents-income-tax authorities have no power to take away valuable things such as title deeds of immovable properties and other stamped documents; that such impounding is not permitted under the provisions of section 133A(4) of the Act; that the communication dated August 4, 2006, indicating that the retention is authorised up to December 31, 2007, by the Chief Commissioner of Income-tax, Bangalore-III, is not permitted in law; that such authorisation, if any, should be quashed by declaring it as null and void and for other consequential reliefs in the context. Notice having been issued to the respondents, the respondent....
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.... Sri. K. S. Hanumantha Rao, learned counsel appearing for the petitioner, is that the very authorisation is not proper; that the person who is not duly authorised has conducted the survey; that what has been seized is certain documents pertaining to the transaction of petitioners-partnership firm, whereas the authorisation was in respect of the premises of Paniraj; that these two persons are distinct legal persons for the purpose of the Income-tax Act as both are assessed to tax separately and have separate permanent account numbers; that even the existing authorisation for continued retention of the documents has not been properly done; that the authorisation is not in favour of the officer who has impounded the documents at the premises and in respect of the very documents, the subject matter of impounding in the survey conducted as on June 22, 2006; that in the light of such glaring inconsistencies and this anomaly being obvious even on a perusal of the records also, the writ petition has to be allowed, the impugned order has to be quashed and the respondents have to be directed to return the impounded documents forthwith. On the other hand, Sri. Aravind, learned counsel appeari....
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....ven if the legality of the action taken is scrutinized applying the strict standards of compliance with the statutory provisions particularly in the background of the fact that the impugned order is an invasion into the rights of the petitioner and is an invasion of the privacy of the citizens, I find that the justification for continued retention of the document though technically might have been authorised by the Chief Commissioner of Income-tax by approving the proposal for their continued retention up to December 31, 2007, is not forthcoming in the statement of objections filed on behalf of the respondents. The entire action of conducting the survey is in the context of the power vested under section 133A. The object of conducting the survey is to gather information. The provisions of section 133A, as it stood earlier, did not contain any power of impounding of documents during the course of search of a premises. The power for impounding documents is a later addition by the Amending Act 20 of 2002 with effect from June 1, 2002, to which my specific attention has been drawn by Sri Aravind, learned counsel for the respondents. The provision reads as under: "Section 133A. Po....
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.... Provided that such income-tax authority shall not (a) impound any books of account or other documents except after recording his reasons for so doing; or (b) retain in his custody any such books of account or other documents for a period exceeding ten days (exclusive of holidays) without obtaining the approval of the Chief Commissioner or Director General therefor, as the case may be, (ii) make an inventory of any cash, stock or other valuable article or thing checked or verified by him, (iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act." The impounding can be initially for a duration of 10 days, i.e., retention of the impounded documents and thereafter, unless it had been properly authorised for continued retention, it should be returned. The intention is not to trespass into the privacy of the citizen and trample upon their private rights unless warranted. The other provisions also indicate that the officer exercising the power of survey should not remove from the place of survey any cash, stock or other valuable or other things. In the present case, it is a fact that the respondents have removed cer....
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....es are expecting or hoping that the retention of the document would pressurise the petitioner to abide by what he has agreed, it means that they are using powers under the Act to coerce the petitioner to submission rather than for any bona fide purpose. It is not for the authorities to embark upon such adventures, rather misadventures, though the intention may still be for gathering revenue to the State. If it is a fact that the petitioner should have offered income of Rs. 10 lakhs and if he had not offered it to tax, there is sufficient power under the Act enabling the income-tax authorities to take such necessary action as the situation warrants and that cannot be achieved by coercive method of retention of such impounded documents. No doubt, the investigation is for the purpose of gathering information. The information having been already gathered, it is open to the respondent to follow it up with such action as is permitted under law pursuant to such information, but not to sit tight on the document seized to the detriment of the petitioner. Though it is urged that the documents belong to third parties and not to the petitioner-partnership firm or the partner-Paniraj and theref....