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Gheru Lal Bal Chand Vs. Income-tax Officer, 'A' Ward (12.01.1982 - PHHC) - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ No. 1787 of 1978
Judge
Reported in(1982)28CTR(P& H)23; [1982]137ITR190(P& H)
ActsIncome Tax Act, 1961 - Sections 131, 131(1), 131(2), 131(3), 133A, 133A(4) and 133A(6); Constitution of India - Article 226
AppellantGheru Lal Bal Chand
Respondentincome-tax Officer, 'A' Ward
Appellant Advocate Bh. Dass,; B.S. Gupta and; A.K. Jaiswal, Advs.
Respondent Advocate D.N. Awasthy and; B.K. Jhingan, Advs.
Excerpt:
.....to the persons concerned, the period of limitation for filing an appeal would commence from the date when the parties concerned acquire knowledge of passing of the said order. - it carries on the business of commission agency and that of sale and purchase of agricultural commodities like cotton, etc......assessment year 1978-79 was due to be filed by 30th july, 1978. on 11th april, 1978, the ito, a-ward, bhatinda, visited the business premises of the petitioner for purpose of survey under section 133a of the i.t. act (hereinafter 'the act'). during the course of survey, the ito issued notice (annex. p-1) at 11-30 a.m. to the petitioner, which reads as under : 'summons to assessees under section 131 of the income-tax act 1961.dated 11-4-1978 tom/s. gheru lal bal chand,bhatinda, whereas our attendance is required in connection with the proceedings under the income-tax act in your case-------you are hereby required personally to attend my office at camp (your business premises) on the 11th day of april, 1978, 'at 11-30 o'clock a.m. there to give evidence and/or to produce either.....
Judgment:

J.M. Tandon J.

1. M/s. Gheru Lal Bal Chand, Bhatinda (petitioner), is a partnership firm which was constituted with effect from 14th October, 1975, under a partnership deed executed by and between its five partners on 29th December, 1975. It has its office and business premises in Subhash Market at Bhatinda. It carries on the business of commission agency and that of sale and purchase of agricultural commodities like cotton, etc. The petitioner filed income-tax return for the assessment year 1977-78 on 30th July, 1977. The income-tax return for the assessment year 1978-79 was due to be filed by 30th July, 1978. On 11th April, 1978, the ITO, A-Ward, Bhatinda, visited the business premises of the petitioner for purpose of survey under Section 133A of the I.T. Act (hereinafter 'the Act'). During the course of survey, the ITO issued notice (annex. P-1) at 11-30 a.m. to the petitioner, which reads as under :

'Summons to assessees under Section 131 of the Income-tax Act 1961.

Dated 11-4-1978

To

M/s. Gheru Lal Bal Chand,

Bhatinda, Whereas our attendance is required in connection with the proceedings under the Income-tax Act in your case-------you are hereby required personally to attend my office at camp (your business premises) on the 11th day of April, 1978, 'at 11-30 o'clock a.m. there to give evidence and/or to produce either personally or through an authorised representative the books of account or other documents specified overleaf, and not to depart until you receive my permission to do so. Without prejudice to the provisions of any other law for the time being in force, if you intentionally omit to so attend to give evidence or produce the books of account or documents, a fine up to Rs. 500 may be imposed upon you under Section 131(2) of the Income-tax Act, 1961.

(Sd.) Income-tax officer,

Appellate Assistant Commissioner,

Income-tax Officer,

A-Ward, Bhatinda.

SEAL

OVERLEAF

Books of account or documents to be produced. Complete account books for the period relevant for the assessment years 1977-78, 1978-79 and current account books.'

2. The ITO again issued similar notices, annexs. P-2 to P-4) at 1-15 p.m. 4 p.m. and 4-45 p.m., respectively, with respect to other account books, etc. The petitioner complied with the directions contained in the notices, annexs. P-1 to P-4, and produced all the records detailed therein. The ITO impounded the records produced by the petitioner under Section 131(3) of the Act, vide order dated 11th April, 1978 (annex. P-5). The details of the records impounded are contained in annexs. A and B attached to annex. P-5. The petitioner has assailed the notices (annexs. P-1 to P-4) and the order (annex. P-5) in the present writ and has prayed that the ITO, A-Ward, Bhatinda (respondent), be directed to return the records.

3. The learned counsel for the petitioner has argued that the ITO, A-Ward, Bhatinda, had no jurisdiction to exercise the power of survey under Section 133A of the Act vis-a-vis the petitioner inasmuch as the latter was within the jurisdiction of the ITO, B-Ward, Bhatinda, in pursuance of the order of the Commissioner of Income-tax (annex- P-6), The contention is without merit. It is correct that the Commissioner, vide orderannex. P-6 dated 15th June, 1977, passed in exercise of the power conferred under Section 124 of the Act, placed the petitioner under ITO, B-Ward, Bhatinda. It has been averred in the return filed by the respondent that with effect from 1st October, 1977, a change in jurisdiction on territorial basis was made whereunder the areas marked by the territorial divisions of Bhatinda, known as Post Office Bazar, Dhobi Bazar, Hospital Bazar and Industrial Estate of Bhatinda were allocated to ITO, A-Ward, Bhatinda. The Subhash Market, in which the petitioner's business premises are situate, is a by lane of Dhobi Bazar. The case of the petitioner was transferred by the ITO, B-Ward, to the ITO, A-Ward, with effect from 1st October, 1977. In the general index register maintained by the ITO, A-Ward, the name of the petitioner was entered at No. 4/18G. It is further averred that the ITO, A-Ward, issued advance tax notice under Section 210 of the Act to the petitioner on 7th December, 1977, which was received by the petitioner on 12th December, 1977. In response to this notice payments were made towards advance tax for the assessment year 1978-79 by the petitioner from time to time. One such payment of advance tax was made on 2lst March, 1978, to the ITO, Ward No. A. In view of the clear and categorical averments made by the respondent in the written statement, there is hardly any scope to infer that the ITO, Ward-A, had no jurisdiction to exercise power of survey under Section 133A of the Act vis-a-vis the petitioner on 11th April, 1978.

4. The learned counsel for the petitioner has argued that the ITO, A-Ward, wrongly issued notices (annexs. P-1 to P-4) and wrongly passed the order (annex P-5) during the process of survey under Section 133A of the Act. This contention of the learned counsel for the petitioner must prevail. Under Sub-section (1) of Section 133A of the Act, the ITO was competent to enter the business premises of the petitioner and further to inspect the books of account or other documents as he may require. It is admitted that the ITO did enter the business premises of the petitioner and whatever books of account and other documents he wanted to examine, were made available to him. Under Section (3) of Section 133A the ITO could place marks of identification on the books of account or other documents inspected by him or could make inventory of any cash, stock or other valuable article or thing checked or verified by him or record the statement of any person which may be useful for, or relevant to, any proceedings under the Act. It is again admitted that the petitioner caused no impediment for the ITO to exercise power under Sub-section (3) of Section 133A of the Act.

5. Sub-sections (4) and (6) of Section 133A read :

'(4) An income-tax authority acting under this Section shall, on no account, remove or cause to be removed from the place wherein he hasentered, any books of account or other documents or any cash, stock or other valuable article or thing....

(6) If a person under this section is required to afford facility to the income-tax authority to inspect books of account or other documents or to check or verify any cash, stock or other valuable article or thing or to furnish any information or to have his statement recorded either refuses or evades to do so, the income-tax authority shall have all the powers under Sub-sections (1) and (2) of Section 131 for enforcing compliance with the requirement made.'

6. It is clear that the ITO is debarred from removing the books of account or other documents et cetera from the business premises of the assessee under Sub-section (4) during the survey under Section 133A. The ITO can, however, resort to powers under Sub-sections (1) and (2) of Section 131 of the Act, in case the assessee refuses or evades to co-operate in terms of Sub-section (6) of Section 133A. It is undisputed that the petitioner neither refused nor evaded to co-operate on 11th April, 1978. Under these circumstances, the ITO had no jurisdiction to resort to the powers under Sub-sections (1) and (2) of Section 131 of the Act while surveying the accounts of the petitioner under Section 133A on 11th April, 1978. It is obvious that the ITO issued notices (annexs. P-1 to P-4) under Section 131 of the Act to the petitioner in excess of the jurisdiction vested in him. These notices are, consequently, liable to be quashed.

7. The ITO impounded the account books of the petitioner, vide order dated 11th April, 1978 (annex. P-5), passed under Section 131(3) of the Act. This order is liable to be struck down being violative of Sub-section (4) of Section 133A and also for the added reason that the petitioner did not contravene the provisions contained in Sub-section (6) of Section 133A of the Act during the process of survey.

8. In view of the discussion above, I accept the writ and quash the notices (annexs. P-1 to P-4) issued under Section 131 and the order (annex. P-5) passed under Section 131(3) of the Act. The respondent is directed to return the records taken into possession in pursuance of order (annex p-5) to the petitioner. No order as to costs.


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