TaxTMI 
TaxTMI 
2023 (11) TMI 654
X X X X Extracts X X X X
X X X X Extracts X X X X
....uestion relates to Section 132(1) but not u/s. 132(3) of IT Act. It is contended that Section 132(3) has been intentionally invoked to gain advantage of sixty days limitation period prescribed u/s. 132(8) by exposing petitioners/assessee to frequent access and intrusion into the privacy of their premises where the said cupboard is kept. 2.1 Counsel for petitioners in support of contention has placed reliance on 2023 (150) taxmann.com 301 (SC) (D.N. Singh Vs. Commissioner of Income-tax, Central Para 64 and 73) and (1991) 192 ITR 436 (Delhi) (B.K. Nowlakha Vs. Union of India). 3. Revenue, in turn, has justified the impugned order by assigning singular reason that since the cupboard contains liquor bottles of different brands valued as per the petitioners at Rs. 1,24,493/-, the same could not have been seized u/s. 132(1) without permission of the Excise Authorities and, therefore, Section 132(3) was invoked imposing prohibitory order. 3.1 For this purpose, Revenue has relied upon letter dated 10.10.2023 (Annexure-R/1) of the Assistant Director, Income Tax (Inv.) - I informing Excise Authority about the prohibitory order passed by Revenue u/s. 132(3) qua cupboard containing fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sclosed 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 Deputy Commissioner] or Income Tax Officer], (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-] (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue: Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii): [Provided also that nothing contained in the second proviso shall apply in case of any valuable article or thing, being stock-in-trade of the business.] [Provided also that no authorisation shall be issued by the Additional Director or Additional Commissioner or Joint Director or Joint Commissioner on or after the 1st day of October, 2009 unless he has been empowered by the Board to do so.] [Explanation.- For the removal of doubts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gard to various articles which for reasons other than the reasons mentioned in second proviso to Section 132(1) make it impossible or impracticable for the competent authority to take physical possession or to remove. 5.3 The expression "valuable article" is not defined in Income-tax Act but is understood in common parlance to include all such things which have value or in other words are marketable. 5.4 Liquor is undoubtedly a thing which is a valuable article since it has value in the market. Thus, by the very wide sweep and extent of expression "valuable article", liquor stands included within the expression "valuable article". 5.5 The expression "valuable" in dictionary is defined as such: Dictionary meaning of "Valuable" As per Concise Oxford English Dictionary As per New Webster's Dictionary and Thesaurus As per Collins Cobuild English Dictionary As per Black's Law Dictionary adj. Worth a great deal of money, very useful or important, small valuable items of personal property. Precious, worth a good price, worthy thing of value 1. If you describe something or someone as valuable, you mean that they are very useful and can help someone a great ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ary n.1 an object that one need not, cannot, or does not wish to give a specific name to (things) personal belongings or clothing. 2. an inanimate material object as distinct from a living being. a living creature or plant. a person or animal in terms of one's feelings of pity, approval, etc. you lucky thing 3 an action, activity, concept, or thought (things) unspecified circumstances or matters. 4 (the thing) informal what is needed or required. what is socially acceptable or fashionable. 5. (one's thing) informal one's special interest or concern. n. material or inanimate object; entity; specimen; commodity; event; action; person (in pity or contempt); pl. belongings; cloths, furniture [O.E. thing, an object]. 1. You can use thing to refer to any object, feature, or event when you cannot, need not or do not want to refer to it more precisely. The objects of dominion or property as contradistinguished from "persons". Western Union Telegraph Co. v. Bush, 191 Ark. 1085, 89 S.W.2d 723, 725, 103, A..L.R. 367; Gayer v. Whelan, 59 Cal. App.2d 255, 138 P.2d 763, 768.. The object of a right; i.e., whatever is treated by the law as the object over which one person e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such valuable article or thing. 6.5 The factors necessary for invoking the second proviso to Section 132(1) are enumerated below: (i) volume; (ii) weight; (iii) other physical characteristics; (iv) and dangerous nature making it impossible or impracticable for the competent authority to remove articles. 6.6 Moreso, the objection of Revenue that liquor cannot even be included in the expression "valuable article"/"thing" defies the very definition of "valuable article" or thing understood in common parlance and, therefore, deserves to be and is rejected. 6.7 Pertinently, Section 132 deals with search and seizure contains comprehensive provisions for which the Revenue may encounter. This provision thus is quite exhaustive. The entire Section 132 does not give any indication that the expression "valuable article"/"thing" can have restrictive meaning to the extent as indicated by counsel for Revenue. 7. Another aspect which deserves consideration is that Taxing Statute is to be understood by the plain meaning of the words employed and to which no intendment or implication is permissible. While interpreting Taxing Statute in case of doubt,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arge number of reasons which make it impracticable to seize documents and valuable things. The word "practicable" indicates that, for some good and valid reason, it is not possible to seize the valuable articles or the books of account. Sub-section (3) of Section 132 would apply only in those cases where the second proviso to Section 132(1) does not apply. Where it is not practicable to seize the account books and valuable articles for the reason stated in the second proviso to Section 132(1), a restraint order would be regarded as a deemed seizure but where it is not practicable to do so for any other reason, then a restraint order will be regarded as having been validly passed under Section 132(3) and the restraint order will continue till a formal seizure is effected. xxx xxx xxx In our opinion, the power under Section 132(3) cannot be so exercised as to circumvent the provisions of Section 132(1) read with sub-section (5) thereof. When a search is conducted and valuable movable articles are found which are liable for seizure, then they should be seized. Because such seizure was not effected due to their physical characteristics, Parliament thought it necessary to en....