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Jawahar Lal Rastogi Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberCivil Miscellaneous Writ No. 1588 of 1966
Judge
Reported in[1970]78ITR491(All)
ActsConstitution of India - Article 226; Income Tax Act, 1961 - Sections 6, 131, 132, 132(1) and 132(8); Income Tax Act, 1922 - Sections 22(4), 37(1), 131(1), 132A, 142(1), 230A(1), 230A(5), 230A(8), 230A(10) and 230A(11); Code of Criminal Procedure (CrPC) , 1898; Code of Civil Procedure (CPC) , 1908 - Order 11, Rule 14; Income Tax Rules, 1962 - Rule 112; District Boards Act - Sections 135; Customs Act, 1962
AppellantJawahar Lal Rastogi
RespondentCommissioner of Income-tax
Excerpt:
- - (1) where the director of inspection or the commissioner, in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the indian income-tax act, 1922 (11 of 1922), or under sub-section (1) of section 132 of this act, or a notice under sub-section (4) of section 22 of the indian income-tax act, 1922, or under sub-section (1) of section 142 of this act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required, by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or.....v.g.o. oak, c.j. 1. this petition under article 226 of the constitution is directed against a search and seizure carried out under section 132 of the income-tax act, 1961 (hereafter referred to as 'the act'). jawahar lal rastogi is the petitioner. his father, inder prasad, carried on money-lending business with headquarters at lucknow. inder prasad died in the year 1953. the petitioner became the karta of the hindu undivided family. the petitioner continued his father's money-lending business. the petitioner is also a partner in a number of industrial concerns. the firms, rohtas financiers and rohtas pharmaceutical distributors, have their head offices at hazratganj, lucknow, while messrs. j. e. n. engineering corporation has its factory and office at aishbagh, lucknow. on september 14,.....
Judgment:

V.G.O. Oak, C.J.

1. This petition under Article 226 of the Constitution is directed against a search and seizure carried out under Section 132 of the Income-tax Act, 1961 (hereafter referred to as 'the Act'). Jawahar Lal Rastogi is the petitioner. His father, Inder Prasad, carried on money-lending business with headquarters at Lucknow. Inder Prasad died in the year 1953. The petitioner became the karta of the Hindu undivided family. The petitioner continued his father's money-lending business. The petitioner is also a partner in a number of industrial concerns. The firms, Rohtas Financiers and Rohtas Pharmaceutical Distributors, have their head offices at Hazratganj, Lucknow, while Messrs. J. E. N. Engineering Corporation has its factory and office at Aishbagh, Lucknow. On September 14, 1964, the Income-tax Officer, A-Ward, Lucknow, directed the petitioner to furnish certain statements. The petitioner was required to furnish the necessary information within 10 days. On September 21, 1964, a number of Income-tax Officers raided the petitioner's residence and premises where the various industries are carried on. These officers searched for documents and goods kept at these places. The search was continued on September 22, 1964. The Income-tax Officers carried away with them documents found by them at these places. These officers also prepared inventories of ornaments and other goods kept at these places. The documents seized in September, 1964, remained with the income-tax authorities till May, 1966, when the writ petition was filed. According to the petitioner, the search and seizure are illegal. He has, therefore, requested that these proceedings be quashed, and the opposite parties be directed to return to the petitioner the books and registers seized.

2. Search and seizure are admitted by the opposite parties. They conceded that they carried away a large number of documents from the petitioner's house and business premises. It is maintained that the search and seizure are legal.

3. The main contention of Mr. S.C. Khare appearing for the petitioner is. that the search and seizure were indiscriminate, and are not warranted by the provision of Section 132 of the Act. It is, therefore, necessary to ascertain the true scope of Section 132 of the Act. Section 132 was amended by Act No. 1 of 1965. Section 6 of the Amendment Act states:

'Any search of a building or place by ... Income-tax Officer purported to have been made in pursuance of Sub-section (1) of Section 132 of the principal Act before the commencement of this Act 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 ...'

4. So, although the search in question was carried out in the year 1964,. the search and seizure are to be deemed to have been made under Section 132 of the Act as amended by Act No. 1 of 1965. It will, therefore, be sufficient to quote Section 132 of the Act as amended by Act No. 1 of 1965,

5. Section 132 of the Act states:

'(1) Where the Director of Inspection or the Commissioner, in consequence of information in his possession, has reason to believe that-

(a) any person to whom a summons under Sub-section (1) of Section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under Sub-section (1) of Section 132 of this Act, or a notice under Sub-section (4) of Section 22 of the Indian Income-tax Act, 1922, or under Sub-section (1) of Section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required, by such summons or notice, or

(b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, 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 disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as undisclosed income or property.

he may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income-tax Officer (hereinafter referred to as the authorised officer) to-

(i) enter and search any building or place where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept;

(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by Clause (i) where the keys thereof are not available;

(iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search;

(iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom;

(v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing.

(2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in Sub-section (1) and it shall be the duty of every such officer to comply with such requisition.

(3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, 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 officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.

(4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.

(5) Where any money, bullion, jewellery or other valuable article or thing (hereinafter in this section and Section 132A referred to as the assets) is seized under Sub-section (1), the Income-tax Officer, after affording a reasonable opportunity to the person concerned for being heard and making such enquiry as may be prescribed, shall, within ninety days of the seizure, make an order, with the previous approval of the Commissioner,--

(i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him;

(ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act;

(iii) specifying the amount that will be required to satisfy anyexisting liability under this Act and any one or more of the acts specified in Clause (a) of Sub-section (1) of Section 230 A in respect of which such person is in default or is deemed to be in default,

and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in Clauses (ii) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized:

Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized:

Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in Clauses (ii) and (iii) or any part thereof, the Income-tax Officer may, with the previous approval of the Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case. (6) The assets retained under Sub-section (5) may be dealt with in accordance with the provisions of Section 132A.

(7) If the Income-tax Officer is satisfied that the seized assets or any part thereof were held by such person for or on behalf of any other person, the Income-tax Officer may proceed under Sub-section (5) against such other person and all the provisions of this section shall apply accordingly.

(8) The books of account or other documents seized under Sub-section (1) shall not be retained by the authorised officer for a period exceedingone 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 thirtydays after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act in respect of the years for which the books of account orother documents are relevant are completed. (9) The person from whose custody any books of account or other documents are seized under Sub-section (1) may make copies thereof, or takeextracts therefrom, in the presence of the authorised officer or any otherperson empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf.

(10) If a person legally entitled to the books of account or other documents seized under Sub-section (1) objects for any reason to the approval given by the Commissioner under Sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents.

(11) If any person objects for any reason to an order made under Sub-section (5), he may, within thirty days of the date of such order, make an application to such authority, as may be notified in this behalf by the Central Government in the Official Gazette (hereinafter in this section referred to as the notified authority), stating therein the reasons for such objection and requesting for appropriate relief in the matter.

(12) On receipt of the application under Sub-section (10) the Board, or on receipt of the application under Sub-section (11) the notified authority, may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit.

(13) The provisions of the Code of Criminal Procedure, 1898 (5 of 1898), relating to searches and seizure shall apply, so far as may be, to searches and seizure under Sub-section (1).

(14) The Board may make rules in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer-

(i) for obtaining ingress into such building or place to be searched where free ingress thereto is not available;

(ii) for ensuring safe custody of any books of account or other documents or assets seized.

Explanation 1.--In computing the period of ninety days for the purposes of Sub-section (5), any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.

Explanation 2.--In this section, the word 'proceeding' means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may have commenced after such date in respect of any year.'

6. It will be seen that Section 132 of the Act refers back to Section 131 of the Act. It is, therefore, necessary to examine the provision of Section 131 of the Act. Section 131 deals with power regarding discovery, production of evidence, etc. Sub-section (1) of Section 131 states :

'The Income-tax Officer. ....shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :--

(a) discovery and inspection ;....

(c) compelling the production of books of account and other documents ;....'

7. Order 11, rule 14, Civil Procedure Code, provides for production of documents. Order 11, rule 14, Civil Procedure Code, states :

'It shall be lawful for the court, at any time during the pendency of any suit, to order the production by any party thereto, upon oath, of such of the documents in his possession or power, relating to any matter inquestion in such suit, as the court shall think right ;......'

8. Although a court may direct the production of any relevant document, it is not permissible to give a general direction to produce all relevant documents. A court may require a plaintiff to produce a certain will. Thecourt may call upon the defendant to produce two specific sale deeds. But it is not open to a civil court to give a general direction to a party to produce before the court all relevant documents.

9. The scope of Section 131(1)(c) of the Act is the same. Although an Income-tax Officer may require an assessee to produce certain books ofaccount, the officer cannot give the assessee a general direction to produceall documents which may be relevant for assessment proceedings relating to any year.

10. It is common ground that in the instant case the search falls under the second limb of Section 132(1)(b) of the Act. The opposite parties claim justification for the search on the footing that, had these documents been summoned from the petitioner, he was not likely to produce them before the income-tax authorities. Before action can be taken under the second limbof Section 132(1)(b) of the Act, the authorities must have a fair idea as to which documents they are anxious to examine.

11. In Seth Brothers v. Commissioner of Income-tax, [1966] 62 I.T.R. 44 (All.) this court explained the broad plan of Section 132, rule 112 and From No. 45. Initially, the Commissioner receives certain information which makes it expedient to organise a search. When the Commissioner has reason to believe that relevant documents can be recovered by arranging a raid, he authorises an Income-tax Officer to make a search. When he is so authorised, the Income-tax Officer proceeds to search a building or place. During the search the Income-tax Officer can seize such documents as, in this opinion, would be useful for any proceedings under the Act. At different stages in the proceedings the Commissioner, and the Income-tax Officer have to applytheir mind to the question of relevancy of documents for purposes of proceedings under the Act.

12. Sri K.P. Bhatnagar was the Income-tax Officer, A-Ward, Lucknow, in September, 1964. He has filed a counter-affidavit. In paragraph 18 of the counter-affidavit he explained why it was considered expedient to organise a search and seizure:

' . . . . .the deponent during the course of the assessment of the petitioner discovered that the petitioner had shown a large accumulation of capital which was apparently disproportionate to his disclosed income. The deponent, in order to verify the correctness of the figures given by him, asked the petitioner to produce his books of account maintained during the lifetime of his father the existence of which he denied. The deponent was of the opinion that his denial was incorrect and that the books were being intentionally withheld by him. The deponent accordingly submitted a report to the Commissioner of Income-tax and the Commissioner of Income-tax having been satisfied about the need of a search issued the warrants of authorisation. . . . .'

13. According to this passage, Sri Bhatnagar was anxious to examine transactions of the time of the petitioner's father. The petitioner's father died in the year 1953. It is difficult to see what useful purpose would have been served by examining in September, 1964, transactions of a period prior to 1953.

14. Annexure I to the writ petition is a copy of the notice dated September 14, 1964, sent by Sri Bhatnagar to the petitioner. The notice (annexure I ) ran thus:

'You are requested to furnish this office a Statement of total assets including business and non-business as on March 31, 1957, March 31, 1958, March 31, 1959, and March 31, 1960, showing their valuation against each together with liabilities, if any.

The investments made by you in the firms, banks and post offices may also be separately furnished for each of the years noted above on the date of valuation.

The details as above may please be furnished positively within ten days from date of this letter.'

15. Assuming that this notice dated September 14, 1964, reached the petitioner the same day, he had time up to September 24, 1964, for complying with that notice. We, however, note that the raid on the petitioner's premises was organised on September 21, 1964, before the expiry of the period fixed in the notice.

16. In September, 1964, Sri Mitra was the Commissioner of Income-tax, U. P. He issued a number of letters of authorisation to a number ofIncome-tax Officers calling upon them to search the petitioner's residential and business premises. Sri Mitra has not filed any counter-affidavit to explain the circumstances under which he found it expedient to direct a search and seizure under Section 132 of the Act. Sri Ghosh, who was. Commissioner of Income-tax, U. P., in August, 1966, has filed a counter-affidavit.

17. We directed the opposite parties to produce before us the letters of authorisation and reasons in support of the issue of these letters. These documents were produced before us. Copies of Sri Mitra's note dated September 19, 1964, and letters of authorisation bearing the same date have been placed on the record.

18. Sri Mitra's note dated September 19, 1964, runs thus :

'Seen I.T.O.'s report dated 17-9-1694.

I have also discussed the case with I.T.O. and A.A.C.

The records of the case clearly indicate that the assessments have not been properly made for the past years and it would not be possible to make a correct assessment for the assessment year 1964-65 also on the basis of evidence on records, specially because the assessee has not produced the old books and complete records in the past. I.T.O. has already made certain enquiries which indicate that the real books of accounts and undisclosed cash and voluable articles which are wholly disproportionate to his known sources of income are kept by the assessee at his residence and business premises and lockers of his proprietary concerns and firms of which he is a partner, I, therefore, consider that in order to get the records and information about cash and valuable articles, for making correct assessments, it is necessary to carry out a search of the assessee's residential house and business premises referred to above and seize books of accounts.

Issue authorisation letters to the I.T.O.s as per forms placed below.'

19. Rule 112 of the Income-tax Rules, 1962, deals with search and seizure. Sub-rule (2) of rule 112 states :

'The Director of Inspection or the Commissioner may, for reasons recorded, issue a written order under his own signature and bearing his seal, specially authorising any Income-tax Officer..... to enter any building......'

20. It will be seen that rule 112 requires the Commissioner to record reasons in support of search and seizure.

21. No doubt, Sri Mitra in his note dated September 19, 1964, observed that it was necessary to carry out a search of the assessee's residential and business premises. But it was not expressly mentioned in that note that had the assessee been called upon to produce relevant documents, he was not likely to produce those documents. Letters of authorisation bear the same date (September 19, 1964). The letters of authorisation were issuedin the printed Form No. 45 prescribed under rule 112. Irrelevant portions were scored out from the printed form. The letters of authorisation indicate that search was being ordered on the ground that the assessee was not likely to produce relevant documents before the Income-tax Officer. The letters of authorisation may well be read along with the note dated September 19, 1964.

22. The letters of authorisation required the Income-tax Officers to seize 'documents which will be useful for or relevant for proceedings under the Indian Income-tax Act, 1922, or under the Income-tax Act, 1961, lor the assessment year commencing on 1st April, 1964, and earlier years up to and including 1956-57.' It may be pointed out that, according to Sri Bhal-nagar's counter-affidavit, he was anxious to investigate transactions prior to 1953. According to annexure 1, Sri Bhatnagar wanted certain statements retaining to four years ending on March 31, 1960. But the letters of authorisation required the Income-tax Officers to look for documents relating to as many as nine assessment years.

23. Sub-section (8) of Section 132 of the Act states:

'The books of account or other documents seized under Sub-section (1) shall not 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....'

24. It will be seen that according to Section 132(8), documents seized under Section 132 ought not to be ordinarily retained for more than six months. In the present case documents were seized from the petitioner in September, 1964. The present writ petition was filed on May 3, 1966. The opposite parties retained the documents seized by them for a period of 19 months before the writ petition was filed. Retention of documents for a long time has no direct bearing on the legality of the search. But the fact that the opposite parties found it necessary to retain the documents for 19 months suggests that the opposite parties were dealing with a mixture of documents, some of which were relevant for assessment proceedings and others were irrelevant.

25. Mr. Gopal Behari, appearing for the department, informed us that as a result of the raid of September, 1964, the opposite parties seized 349 books or registers. The authorities also seized a trunk containing thousands of promissory notes. We were told that several promissory notes were undated and blank except that they bore the debtors' signature or thumb-impression.

26. In paragraph 30 of the writ petition it is stated:

'That the very fact that all and every document or paper was indiscriminately seized, bundled up and taken away clearly established that at no time was any consideration made as to the relevance of the documents.'

27. On this point Sri Bhatnagar stated in paragraph 22 of his counter-affidavit:

'That paragraph 30 of the writ petition is also denied. The books and documents were not seized indiscriminately but only such books and documents were seized as were considered to be relevant and useful.'

28. Sri Nigam is another Income-tax Officer, who took part in the search and seizure. He has filed another counter-affidavit. In paragraph 8 of his counter-affidavit Sri Nigam stated:

'All the documents that were seized were such as were considered to be useful and relevant for the assessment of the petitioner. The allegation that they were seized indiscriminately is denied.'

29. It is true that Sri Bhatnagar and Sri Nigam claim to have scrutinised the documents to ascertain whether they were relevant. But in these counter-affidavits there is no specific denial of the petitioner's allegation that all documents found on the spot were seized by the authorities. Opposite parties prepared lists of documents and inventories of articles examined on the premises. These lists arc annexures to a rejoinder-affidavit. These annexures indicate that ornaments, medicines and other goods found on the spot were left there. But there is no clear indication in these annexures that any documents found on the spot was left on the premises.

30. In paragraph 25 of the writ petition it is stated that during the course of the raid the Income-tax Officers did not place any paper marks of identification on the documents seized by them. On this point, Sri Bhatnagar stated in paragraph 17 of the counter-affidavit.

'.... all the books and documents seized during the search have been included in the inventories with sufficient description for the purposes of identification.'

31. It will be noticed that the counter-affidavit does not contain a denial of the allegation that the Income-tax Officers did not place any marks of identification on the documents seized. Under the letters of authorisation the Officers were directed by the Commissioner of Income-tax to place identification marks on books and documents which might be found in the course of the search.

32. Item No. 4 in annexure 10A is a file regarding quotations received. Item No. 42 of annexure 10A is a file regarding price list and telegrams. Items Nos. 60 and 66 of the same annexure are also price lists. Item No. 68. of the same annexure is an envelope containing price list. Item No. 36 of annexure 10B is Swastika file containing plaint. One of the documents mentioned in annexure 11 is attendance register for three months in 1964. Item No. 4 of annexure 11E is correspondence with Post Master regarding delivery of letter. Item No. 16 of annexure 12C is insurance policy for Fiat motor car. Item No. 19 of annexure 13B is dak despatch register.

33. Item No. 26 of the same annexure is a pending file relating to water for injection. Item No. 27 of the same annexure is the file of a approved hospital rates. It is difficult to see how these documents were relevant for assessment purposes.

34. Item No. 6 of annexure 11B is a file of income-tax clearance certificates. Annexure 11C mentions the recovery of appellate order of the Assistant Commissioner (Judicial). There are also two more documents described as appellate orders. Item No. 1 of annexure A is a notice of demand under Section 135 of the District Boards Act. Item No. 34 of annexure 12A is a letter of probate from the civil judge, Mohanlal Ganj at Lucknow. These are all public documents. Income-tax Officers could easily obtain copies of these public documents from the authorities concerned. The petitioner was not likely to refuse to produce these documents had they been summoned from him.

35. In Mamchand & Co. v. Commissioner of Income-tax, [1968] 69 I.T.R. 631 (Cal.) it was held that enormity of a search cannot be a ground for condemning the same if the search is otherwise justified.

36. In Hindustan Metal Works v. Commissioner of Income-tax., [1968] 68 I.T.R. 798 (All.) it was held that the mere fact that a few documents, which do not apparently seem to be relevant to any pending proceedings, were seized will not render the search mala fide.

37. In Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver, [1967] 66 I.T.R. 664; 20 S.T.C. 453; [1968] 1 S.C.R. 148 (S.C.) it was held by the Supreme Court that where a search warrant issued by a Magistrate is shown to be defective because he had not applied his mind to the question of issuing it, anything recovered on the basis of such a warrant from the search of a residental house must be returned.

38. In Gopikisan Aggarwal v. Assistant Collector, Customs, Raipur, [1967] 2 S.C.R. 340; A.I.R. 1967 S.C. 1298 it was. held that under the Customs Act, 1962, an Assistant Collector need neither state reasons nor give particulars of the nature of the goods and documents in his authorisation for search.

39. In Zalwant Singh v. R.D. Shah., [1969] 71 I.T.R. 550 (Delhi) it was held that where, by and large, the documents seized appear to be such as could lead a reasonable man to believe that they were useful and relevant, the search and seizure cannot be struck down on the ground of absence of application of the mind. The mere presence of a few documents, which may have no bearing, among those seized would not go to show that there was a complete absence of application of mind.

40. In Income-tax Officer v. Firm Madan Mohan Damma Mal, [1968] 70 I.T.R. 293 (All.) it was held that Section 132 of the Income-tax Act, 1961, does not require specific mention by description of each particular document which has to be recovered on search. It is for the officer who is conducting the search to decide whether a particular document found on search was relevant for the purpose or not.

41. In Seth Brothers v. Commissioner of Income-tax, there was reason to believe that there were instructions from the Directorate of Inspection, New Delhi, for a general raid and seizure of all account books and papers which could be found at the petitioner's permises. More than 500 documents were seized. Some documents seized by the authorities appeared to be irrelevant. Marks of identification were not put on several documents. Documents were detained by the authorities for more than two months. It was held that the search was not bona fide.

42. In the present case the petitioner has established the following points :

(1) Sri Bhatnagar was apparently interested in investigating transactions prior to 1953. On September 14, 1964, the petitioner was directed to furnish statements relating to four years ending on March 31, 1960. Yet, the Commissioner of Income-tax issued letters of authorisation permitting Income-tax Officers to seize documents relevant to nine assessment years.

(2) By the notice dated September 14, 1964, the petitioner was required to furnish certain statements up to September 24, 1964. The raid was ordered and organised before the expiry of the period of the notice.

(3) More than 300 books and registers were seized during the raid. Opposite parties also carried away thousands of promissory notes. Several promissory notes were practically blank. Some of the documents seized appear to be irrelevant for assessment purposes. Some of the papers were public documents.

(4) There is reason to believe that all or almost all the documents found on the permises were seized and carried away by the opposite parties.

(5) Marks of identification were not placed on the documents in spiteof the direction contained in the letters of authorisation.

(6) The documents seized during the raid were detained by the opposite parties for 19 months before the present petition was filed.

43. The circumstances indicate that both the Commissioner of Income-taxand the Income-tax Officers acted beyond the legitimate scope of Section 132 of the Act. There is force in the petitioner's complaint that opposite parties carried out indiscriminate search. The search and seizure constitute abuse of power conferred on the income-tax authorities by Section 132 of the Act. These proceedings should, therefore, be quashed. In my opinion, the documents seized by the opposite parties in September, 1964, should be returned to the petitioner and other persons From whom they were seized.

A.K. Kirty, J.

44. I am also of the same opinion. I have nothing to add.

BY THE COURT

45. The petition is allowed with costs. The search and seizure proceedings of September, 1964, are quashed. We direct the opposite parties to return the documents seized by them to the petitioner and other persons from whose custody they were recovered.


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