TaxTMI 
TaxTMI 
2009 (4) TMI 189
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....re and while taking away the papers and documents contained in as many as thirty files, but nevertheless issued summons on September 20, 2005 (copy at annexure Al) calling upon the petitioner to produce the ledger, cash book, etc., as referred to above on the next day at the office of the first respondent-Income-tax Officer, Ward No. 12(2), Rashtrothana Bhavan, Nrupathunga Road, Bangalore-l. 4. It is the version of the petitioner that the petitioner appeared before the first respondent-officer the next day along with the remaining books of account which were left with the petitioner and which had been summoned and while the first respondent-officer retained even those books of account also, did not return the earlier files and documents which had been taken away from the office premises of the petitioner the previous day. 5. It is the version of the petitioner that much later the petitioner was issued with an order dated October 7, 2005, purporting to be an order passed under section 133A(3) (ia) of the Income-tax Act, 1961 (for short "the Act"), inter alia, indicating that at the time of survey of the office premises of the petitioner on September 20, 2005, certain files and doc....
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....ure L) was only to extend the period of retention for further period of one year up to March 31, 2010, along with the memorandum as this order has been communicated to the petitioner subsequent to the filing of the writ petition. 11. It is in the background of such persistent refusal on the part of the respondents to return the impounded documents of the petitioner, the present writ petition seeking for following reliefs: "Issue writ of certiorari or writ of mandamus or writ of prohibition or such other writs which this hon'ble court deems fit in the facts and circumstance of this case and, thus: 1. Ordering for immediate return of the impounded books of account and other documents. 2. Declaring that both the initial impounding of books of account and other documents as well as the subsequent retention of the same is illegal and unlawful. 3. Imposing of exemplary cost as against the respondents and, in favour of the petitioner for the undue hardship and agony endured by the petitioner. 4. May pass such order which best serves the interest of justice, equity and law." 12. The first respondent-Income-tax Officer, Ward No. 12(2) and the second respondent-Commissioner of Income-....
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....e sheets, etc. 15. Harry file containing copy of indemnity bond and receipts. 16. Evsons file containing original sale deed dated July 22, 2002, and June 2, 2003, and loose papers. 17. Super thickest file containing copy of sale deed, etc. 18. Triplex file containing copy of sale agreements, receipts, etc. 19. Thickest file containing receipts. 20. Triplex file containing copy of sale agreements and receipts. 21. Double extra thick file containing loose papers. 22. Triplex file containing receipts and correspondence. 23. Harry file containing copy of sale agreement, receipts. 24. Epsons file containing original sale deed dated July 31, 2002, and connected papers. 25. Triplex file containing receipts and correspondence. 26. Super thickest file containing bank pass sheets and loose sheets. 27. File containing copy of sale d and loose sheets. 28. Cobra file containing original lease deeds Andal. 29. Triplex file containing correspondence and receipts. 30. Cobra spring file containing copies of sale agreements, absolute sale deeds, etc. The writ petition is on the premise that the income-tax authorities, who have power to impound the documents under the provisions of s....
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....is an exception for retaining the impounded documents for some duration, puffing an outer limit of 15 days for such detention and beyond this can only with the approval of the Chief Commissioner. A period beyond 15 days can be understood as a few days supplementing the outer limit of 15 days. Be that as it may the stand of the respondents to retain the documents for as long as a period of more than four years is absolutely without any justification in law nor are the authorities enabled to retain the documents for such a long period, In the circumstances, an interim direction is issued to the respondents to return the documents impounded forthwith to the petitioner and if it is so needed, it is open to the respondents to retain the photo copies of the documents obtaining the signature of the managing director of the petitioner-company to indicate that it is the affirmed copy of the very documents which were impounded by the authorities from the petitioner and is being returned now and use that for any purpose as needed by the respondents. The documents referred to in annexure B which had been impounded from the petitioner and retained with the respondents shall be returned to t....
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.... challenge to the retention of the impounded documents for a period beyond eight to ten months and during the pendency of the assessee's appeal before the Appellate Commissioner was not found illiegal, no relief was extended to the petitioner and the writ petition was dismissed holding that the proviso to sub-section (3) of section 131 of the Act was applicable for such retention. 19. Likewise, in the case decided by the single Bench of the Madhya Pradesh High Court, the retention of the documents during the pendency of the proceedings in appeal were again sustained and it was observed that while the mandamus for return of the documents cannot be issued during the pendency of the proceedings, the only option open to such aggrieved assessee is to seek for early disposal of the case and not for direction to return the impounded documents and the petition was dismissed. 20. Sri Kiran Kumar, learned counsel for the petitioner, on the other hand, has drawn attention to the statutory provision of sub-section (3) of section 131 of the Act which reads as under: "131. Power regarding discovery, production of evidence. etc.—. (3) Subject to any rules made in this behalf, any authori....
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.... as long as a period of five years as has been done now and not returning the documents in spite of persistent demands by the petitioner for the return of the same. 22. It is also the submission of Sri Kiran Kumar, learned counsel for the petitioner that the period of extension should be in consonance with the spirit and intendment of fixing the outer limit of fifteen days and cannot be in total derogation of the period prescribed by the statute and, therefore, also assuming that there is an order for impounding and with prior approval of the Commissioner, the period of impounding extended by later order, such order still is not sustainable and not permitted in law and, therefore, is to be quashed. 23. In support of the submission that the reasons for recording should be found in the records before passing the order, etc., reliance is placed on the decision of the Rajasthan High Court in the case of Sugan Chand Vinod Kumar v. CIT reported in [1989] 175 ITR 273 and further submission is that the statutory provision being quite clear and unambiguous, it should be understood and enforced as it is and there being no scope for interpreting for extending the period of fifteen day....
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....he approval of the Chief Commissioner, etc. In the normal course, the outer limit is fifteen days, as an exception, it can be more. 31. While on the facts in the present case, as submitted by Sri Kiran Kurnar, learned counsel for the petitioner, the authorities have virtually misused the power by taking away the documents even as on September 20, 2005, it is only for regularizing the taking away of the documents, an order for impounding them came to be passed on October, 7, 2005, in fact, after the expiry of the period of fifteen days and, therefore, the initial impounding order itself is bad in law. 32. Be that as it may, as the more important question is the extent of power under sub-section (3) of section 131 of the Act and even as indicated in the statutory provision, an outer limit for retention of document is fifteen days, extension can only be for a few days more and for any specific purpose and with the prior approval of the Commissioner. 33. 'Where the statute has fixed the outer limit of fifteen days and permits extension beyond for justifiable reasons and with the safeguard of obtaining approval of the higher authorities, the power to approve retention beyond fifteen ....
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....ts and documents with the power of search and seizure as conferred under section 132 of the Act clearly indicates that the power under section 131 of the Act is inferior to the power under section 132 of the Act. 37. While the power under section 132 of the Act is normally in the context 37 of assessees not forthcoming with true particulars and indulging in suppression of information and material and to deal with such situations, conferring the authority with greater powers, power under section 131 of the Act is a power incidental to the proceedings taken under the Act and in situations contemplated under section 131(TA) of the Act even in a situation when there are no proceedings in respect of whom power is sought to be exercised under this provision pending before the authority taking action or before any other income-tax authority. 38. The comparative analysis of these two sections also reveals that the legislative scheme is to provide for greater safeguards in favour of the assessees and citizens when more drastic powers under section 132 of the Act is sought to be exercised by the income-tax authorities and lesser scrutiny and control when powers as available under sectio....
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....t to a seizure and also the provisions of section 133A of the Act which is a power for survey also providing for retaining books indicating that the outer limit while exercising the power under section 133A of the Act for survey is ten days and the power of impounding being a power exercisable under the provisions of the Act and compelling an assessee to produce books of account, outer limit is being fixed at fifteen days and in respect of more drastic action under section 132 of the Act for search and seizure which is being subjected to scrutiny by a higher authority like the Central Board of Direct Taxes and also being subject to the pro visions of the Criminal Procedure Code relating to search and seizure, while enables retention of seized documents till the culmination of the proceedings pursuant to seizure, such a drastic power cannot be read into the proviso to section 131(3) of the Act for the simple reason, the power for impounding documents/account books under this statutory provision is for inferior power compared to the power of seizure. The retention of the documents by the respondents by extending ....