1. The petitioner is a partnership firm and an assessee under the I.T. Act, 1961. The petitioner's business premises and the residential premises of its partners were searched under Section 132 of the Act on May 12, 1981. Certain books of account and documents were seized on that date. By this petition, which was filed on March 22, 1983, the petitioner prays for a direction to the respondents for the return of the books of account and documents seized from the business premises of the petitioner and the residential premises of its partners. The petition is based essentially on the ground that no approval was given by the Commissioner to the retention of the books of account and documents seized within 180 days from the date of the seizure as required by Section 132(8) of the Act. Notice for admission of the petition was issued. Return has been filed. The petition is admitted and heard on merits.
2. The file relating to the approval was produced before us by Shri J. P. Sanghi, learned counsel appearing for the respondents. According to the learned counsel, some communication was first sent by the ITO, C-Ward, Katni, but that is not traceable. The first communication that we get is the letter dated April 28, 1982 of the ITO, Katni, to the Commissioner for approval giving reasons for retention of the books of account and documents. No approval appears to have been given by the Commissioner in this letter. The ITO again wrote on March 11, 1983, forapproval for retention of the books of account and other documents seized up to June 30, 1984, On this communication, the Commissioner gave his approval on March 28, 1983, This approval was communicated to the petitioner. As already noticed, the seizure was made on May 12, 1981, and 180 days from seizure expired on November 8, 1981. It is on these facts that we have to decide whether the retention of the books of account and documents seized is illegal or not.
3. Sub-sections (8) and (10) of Section 132 of the Act read as follows :
' 132(8). The books of account or other documents seized under Sub-section (1) or Sub-section (1A) shall not be 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.......
(10) If a person legally entitled to the books of account or other documents seized under Sub-section (1) or Sub-section (1 A) 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.''
A persual of these sub-sections will show that there is a clear mandate in Sub-section (8) that the books of account and other documents seized shall not be retained by the authorised officer for a period exceeding 180 days from the date of the seizure unless reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained. From the language of this section, it is clear to us that the authorised officer must record reasons for their retention beyond a period of 180 days and obtain the approval for that purpose of the Commissioner within 180 days. Unless that is done, the retention of the books of account or the document seized would become clearly invalid immediately on expiry of 180 days. The learned counsel appearing for the respondents submits that even if the Commissioner grants approval after the expiry of 180 days, the retention would be valid. We are not prepared to accept this submission. By the provisions of search and seizure enacted in Section 132, a serious invasion is made upon the rights, privacy and freedom of the taxpayer and these provisions must be strictly construed. The section does not in terms empower the Commissioner to give ex post facto approval and we cannot infer such a power impliedly by construction. Once the retention has become invalid, it cannot bo validated by a subsequent grant of approval by the Commissioner. The view that we aretaking is supported by the ruling of the Delhi High Court in Metal Fittings Pvt. Ltd. v. Union of India : 141ITR758(Delhi) . There is, no doubt, a decision of the Allahabad High Court in Seth Brothers v. CIT : 80ITR693(All) , which supports the contention of the learned counsel for the respondents, but, with great respect, we are unable to agree with the Allahabad view. We may also point out that not only the reasons must be recorded by the authorised officer and the approval of the Commissioner obtained within 180 days, but the approval must also be communicated to the person from whom the books of account and other documents have been seized, so that he may make an application to the Board stating his objections and requesting for the return of the books of account and other documents seized. This follows from Sub-section (10) of Section 132 of the Act. The Calcutta High Court in CIT v. Mahabir Prasad Poddar : 93ITR215(Cal) , took the view that reasons must also be communicated. The Delhi High Court in Hanuman Pershad Ganeriwala v. Director of Inspection : 93ITR419(Delhi) , has taken the view that reasons need not be communicated but approval should be communicated to the person from whom seizure is made. We need not go into this controversy. In the instant case, 180 days from the seizure expired on November 8, 1981. No step whatsoever was taken for obtaining the approval of the Commissioner within this period. The approval was granted only after the filing of this petition, nearly after two years from the date of the seizure. Such an approval cannot validate the retention of the books of account and other documents seized from the petitioner which had become invalid after the expiry of 180 days.
4. The learned counsel for the respondents submitted that the petitioner should have approached the Board under Sub-section (10). As there was no approval by the Commissioner when the petition was filed, the question of approaching the Board does not arise and it cannot be said that there was any alternative remedy open to the petitioner.
5. The petition is allowed. We direct the respondents to return the books of account and documents seized from the business premises of the petitioner and residential premises of its partners. The petitioner will get costs of this petition. Counsel's fee Rs. 200, if certified.