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2021 (3) TMI 1172
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....espondent, the Deputy Commissioner of Income tax, Central Circle 2(1), (in short, Assessing officer/AO), in respect of assessment years (AY) 2013-14 to 2018-19 ('block period'). The prayer in W.P.13209 of 2019 filed by R.N.Jayaprakash, a director in the company, is for a Declaration to the effect that the search conducted on the premises in terms of Section 132 of the Act is without jurisdiction as are all consequences thereof. The prayer in W.P.No.13218 of 2019 is for mandamus directing the return of documents seized and the prayer in W.P.No.13368 of 2019 is for a mandamus forbearing the respondent from retaining the books and documents and other articles and /or calling upon the petitioner or its directors or employees to appear before him for the purpose of taking evidence/recording statements with reference to the aforesaid books, documents and articles seized from the premises of the petitioner, its directors and its employees. 2. The petitioners were subject to search and seizure operation under Section 132 of the Act in their premises including the residential premises of promoter/Directors between 05.07.2018 and 09.07.2018. 3. W.P.13209 of 2019 seeks a declaration on ....
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....accepts notice for all respondents and seeks some time to take instructions and to file counter to the writ petitions as well as the Miscellaneous Petitions. 2.The petitioners have requested the respondents to furnish them with copies of various documents seized as well as statements recorded in the course of the enquiry. This request has been rejected by the Deputy Director of Income Tax on 04.04.2019 stating that copies of relevant statements and seized documents that are proposed to be used against the assessee for the assessment proceedings will be furnished as and when notices under Section 153A/153C are issued. 3.It is thus clear that assessments in terms of the provision of the Income Tax Act, 1961 are yet to be initiated by the department. 4.Mr.A.P.Srinivas, learned Senior Standing Counsel clarifies that it is only assessment of black money in terms of the provisions of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ('Black Money Act') that are ongoing. The normal practice adopted is for furnishing of copies of statement as well as seized materials and records to be supplied to an assessee upon a reques....
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....g the process of assessment, invalid. 7. In a common counter affidavit filed in W.P.Nos.35076, 35082, 35084, 35086, 35088 & 35090 of 2019, all of which are filed by the company and challenge notices issued in terms of Section 153A of the Act, the Deputy Director of Income Tax (Investigation)/R2 gives the background to the entire proceeding. A joint search and survey was conducted by the Income Tax Department and Enforcement Directorate (ED) in the premises of Advantage Strategic Consulting Private Limited and others on 01.12.2015. Upon analysis of the electronic devices seized by the ED in that search and handed over to the Department, transactions of purchase of immovable property inter se the petitioner company and Karthi P. Chidambaram and his family were found. The seized details revealed that unaccounted cash had been paid to the sellers and subsequent enquiries showed that the properties in question had been sold to a company by the name of Handhold Ventures Private limited. 8. On the basis of the above intel, action under Section 132 was conducted in the case of the petitioner company, its affiliates and connected personnel from 05.07.2018 to 09.07.2018, covering in al....
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....are at a preliminary stage. Thus, I have dealt solely with the legal issue raised and argued, the facts of the matter being irrelevant in this regard. However, the averments of the petitioner and respondent as borne out in the pleadings are recorded in the preceding paragraphs only for proper completion of the narrative and serves no other purpose save this. 12.The provisions of Section 153A have been inserted in the Act w.e.f 01.06.2003 and provide for the framing of assessments for a block period of six years in the case of a person subject to search and seizure action under Section 132 of the Act. Section 153A, to the extent it is relevant, is extracted below: Assessment in case of search or requisition. 153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the ....
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....r, 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 undisclosed income or property), then,- (A) the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or De....
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....referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) seized under that sub-section shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of sixty days from the date on which the last of the authorisations for search was executed and thereupon the powers exercisable by the authorised officer under sub-section (8) or subsection (9) shall be exercisable by such Assessing Officer. . . . . 14. According to the petitioner, the IO has delayed the handing over of the seized documents to the AO and this vitiates the process of assessment. They refer to the provisions of Section 132(9A) as per which, in cases where the Investigating Officer, if he is not the assessing officer of the assessee concerned, is to hand over the seized material to the AO of the concerned assessee within a period of 60 days. Such delay is sought to be arrived by a series of inferences. However, as the IO, vide common counter....
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....er having jurisdiction over the searched person/entity within a period of 60 days from the last of the search authorisations, is specific to the exercise of powers by the authorised officer under sub-section (8) and (9) of Section 132 only and cannot be extended any further. 17.The Division Bench of this Court in K. V. Krishnaswamy Naidu (supra) considered a challenge to an order of the Commissioner of Income Tax under Section 132(8) of the Act. The petitioner in that case, sought the return of documents seized at the time of search under Section 132 on the grounds that firstly, the AO in that case had already passed an order under Section 132(5) which could have been done only if he had been in possession of the seized documents and in any event, the IO could not hold the documents after an order under section 132(5) had been passed, whether such possession be termed 'legal' or 'physical' custody. The provisions of Section 132(5) are also extracted below, merely for the sake of completion: (5) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) is seized under sub- se....
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....w except that the period has been increased to 60 days from 15 days. 20.In that case, as in the case before me now, there was no identity between the IO and the AO having jurisdiction over the assessee. Thus, the AO could pass an order under section 132(5) only if he were in possession of the seized documents and it is to enable this, that the IO was directed to hand over possession of all seized documents/assets to the AO within 15 days from the date of seizure. The AO received the seized material in early December 1984, issued a notice on 10.12.1984 and passed an order under Section 132(5) thereafter. The request for extension for time was made by the IO on 22.05.1985 after passing of the Section 1132(5) order by the AO, and granted on 24.05.1985, and the Bench, being of the view that no valid extension could have been made in the aforesaid circumstances, quashes the extension granted, holding as follows: In the circumstances, therefore, there could be no doubt that when sub-s. (9A) refers to an authorised officer having no jurisdiction over the person, it is a reference to an officer other than an Income-tax Officer having jurisdiction to make an order under sub-sect....
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....g terms: Having heard counsel for the parties and in view of the provisions of Sub-section (i)A) of Section 132 of the Income-tax Act, 1961, we are in agreement with the judgment of the High Court (reported as [1987] 166 ITR 244) that the Assistant Director of Inspection, who was the authorised officer for the purposes of carrying' out search and seizure but was not the Incometax Officer who could pass an order under Sub-section (5) of Section 132 could not retain the seized documents etc., beyond 15 days and, therefore, he could not moot a proposal under Sub-section (8) for further retention of the documents beyond 180 days. This appeal is accordingly dismissed with costs. 22.On a harmonious construction of Sections 132 (5), (8) and (9), the Bench holds that unless the authorised officer also happens to be the ITO having jurisdiction over the assessee, the seized records must be handed over to the ITO having jurisdiction within 15 days from date of seizure to enable the ITO to pass an order in terms of Section 132(5). This case is thus, not an authority for the proposition whether the time limit under Section 132(9A) is mandatory or not, but decides the validity of....
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....R1, R2 confirms that the seized materials were handed over by him to R1 on 22.08.2019 and R1 was thus in possession of the same when he issued the notices under Section 153A. This, according to the revenue, satisfies the statutory prescription in this regard. 27.No doubt, there is a time limit for handing over of the seized document by the investigating officer to the assessing officer and this is to ensure that sufficient time is available to the receiving officer to complete the assessment within the overall limitation provided. 28. In the present case, the revenue in counter has admitted that the documents were handed over beyond the period of 60 days from the date of search but, this lapse in procedure will not vitiate the notices under section 153A as, in my considered view, the period of sixty days is not critical to the legality of the notices impugned before me. 29.The Division Bench of the Delhi High Court in Dr.Nalini Mahajan Vs. Director of Income Tax (252 ITR 123) considered various issues that arose in the context of search proceedings initiated on that petitioner and connected persons and entities. One of the issues framed for consideration was whether the pr....
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....to the effect that the same was enacted only for the benefit of the Revenue. The question whether a provision shall be construed to be mandatory or directory, depends upon the scope and purport thereof. The expression "shall" has been used. Prima facie the said provision is mandatory in nature. The statutory provision uses a negative form, which also provides an indication that the provision is mandatory. By reason of such a provision, the authorities cannot be held to have been conferred with an unlimited power of releasing the seized books of accounts etc. An assessed is required in law to maintain its books of accounts for various purposes. Such books of accounts may be required for several other purposes. A statute must be construed having regard to the doctrine of 'justness'. In Hindalco Industries Ltd. v. Union of India and Ors. it has been held that the word 'may' in the context of Section 25O of the Industrial Disputes Act should be read as imperative. Furthermore, even a directory provision has to be substantially complied with. The respondents, in the instant case, have not pleaded even substantial compliance of the said provisio....