High Court Of Calcutta
Sambhu Prasad Agarwal & Ors. vs. Director Of Income-Tax (Investigation) & Ors.
Amitava Lala, J.
Writ Petn. Nos. 2530 to 2533 of 2001
8th January, 2002
Dr. Debi Prasad Pal & A.K. Panja, for the Petitioners : D.K. Shome & J.C. Saha, for the Respondent
AMITAVA LALA, J. :
This writ petition is made challenging the search and seizure carried out by the IT authority on 16th Oct., 2001, and for withholding books, documents and papers seized in the course of such search and seizure. The petitioners annexed Pachanama of search and seizure which includes warrant and other reference, etc. as well as list of inventory of the jewellery, bank accounts and other documents. According to the writ petitioner, under s. 132 of the IT Act, a provision is made for search and seizure. Dr. Debi Prasad Pal, and Mr. Ajit Kr. Panja, learned senior counsel appearing in support of the petitioners, contended that as per sub-s. (9A) of s. 132, the authorised officer making the search and seizure has no jurisdiction to keep the books of account or other documents or assets sized for more than a period of fifteen days of such seizure and they are to be handed over by the authorised officer to the ITO having jurisdiction within such period and thereupon the powers exercisable by the authorised officer under sub-s. (8) or sub-s. (9) shall be exercisable by such ITO. If the sub-section under this section is read in the context of other parts of the Act in which the authority or power of the Income-tax/AO is given it will be seen that after the period of fifteen days the Income-tax/AO automatically becomes an authorised officer. Therefore, there is very little scope for argument on the part of the authority for withholding such documents beyond the period. Dr. Pal relied upon a judgment of the Supreme Court in CIT vs. K.V. Krishnaswamy Naidu & Co. (2001) 168 CTR (SC) 610 : (2001) 249 ITR 794 (SC), whereunder by a cryptic order, the Supreme Court accepted the decision of the Madras High Court Division Bench in K.V. Krishnaswamy Naidu & Co. vs. CIT (1986) 51 CTR (Mad) 154 : (1987) 166 ITR 244 (Mad) : TC 62R.200. Upon going through the judgment of the Madras High Court it appears that the retention of the seized documents beyond fifteen days by the officer other than the ITO having jurisdiction over the assessee cannot be held to be valid and was found to be without jurisdiction. Even the period cannot be extended. During the course of argument an incidental question arose whether the authority concerned also opposing the petitioner can get copies of the documents or not to which Mr. Dipak Kr. Shome, learned senior counsel appearing for the authority, contended before this Court that there is a clear provision to apply for a copy under sub-s. (9) of s. 132 and if the application is made the authority will supply the certified photocopies of the same. Since this question is an incidental one and the main question is a question of law, retention of the matter for the future by giving directions for filing affidavits will be a futile attempt. Therefore, even at the motion stage, the Court found it necessary to dispose of the matter either way finally upon visualising the scope and ambit of law reading the same. However, it is recorded hereunder that since the respondents did not use any affidavit the allegations made against them seem to be admitted.
According to Mr. Shome, the acceptance of the judgment of the Madras High Court by the Supreme Court as on 22nd Jan., 1998, is really acceptance of the legal position prior to the amendment of the IT Act and by introduction of Chapter XIV-B in respect of block search and seizure w.e.f. 1st June, 2001, the earlier legal position was virtually given a go-by. Therefore, the judgment as passed by the Supreme Court in agreement with the Madras High Court judgment is no longer a good law. I have gone through such Chapter and I find that a special procedure for assessment of search cases are not only defined but also various modes were introduced therein by way of an amendment. A Division Bench judgment of the Allahabad High Court which is reported in Digvijay Chemicals Ltd. vs. Asstt. CIT (2001) 167 CTR (All) 299 : (2001) 248 ITR 381 (All) has been cited in the Court. The relevant point has been considerably dealt with therein. The ratio of the judgment is that the purpose of s. 132(9A) of the IT Act, 1961, is to help the AO to make a speedy assessment and is not for the benefit of the assessee. Even, if the seized materials were handed over beyond the period of fifteen days, it cannot be said to be not looked into by the Income-tax/AO. Therefore, it appears that the period so fixed under the statute is not mandatory but directory directing the Departmental authority to expedite the process. If such period of fifteen days seems to be directory the period at best can be construed as a reasonable period to come to a conclusion. Moreover, if the sub-section is read with the newly introduced Chapter as aforesaid it seems that the period of search and seizure can be taken for a period of two years. Therefore, merely handing over the documents even by the authorised officer to the AO within or outside the period of fifteen days does not help an assessee in any manner whatsoever in getting any relief. If the assessee applies for a copy in accordance with law he will be entitled for the same for which jurisdiction of the high prerogative writ cannot be misused. Hence, taking the law as supreme over and above all interpretations and the same should be read with correct interpretation, I, in agreement with such Division Bench judgment of the Allahabad High Court in Digvijay Chemicals Ltd. vs. Asstt. CIT (supra), hold that the writ petition cannot succeed in the circumstances. Therefore, the writ petition stands dismissed. No order is passed as to costs. Since, this writ petition is analogously heard with W.P. No. 2531 of 2001 [Prakash Chand Agarwal vs. Director of Income-tax (Investigation) and W.P. No. 2532 of 2001 [Lalita Devi Agarwal vs. Director of Income-tax (Investigation)] and W.P. No. 2533 of 2001 [Saroj Agarwal vs. Director of Income-tax (Investigation)], the judgment and order passed herein will have a binding effect upon all the aforesaid writ petitions. A prayer for stay is made, considered and refused.
[Citation : 254 ITR 660]