LexC.I.T. WEST BENGAL - III & ORS. ETC. versus ORIENTAL RUBBER WORKS ETC .
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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817
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. c.I.T. WEST BENGAL~III & ORS. ETC.
v.
ORIENTAL RUBBER WORKS ETC .
. November 15, 1983 .
(V.D. TULZAPURKAR, V. BALAKRISHNA BRAD! !'ND D.P. MADON, JJ.}
Income Tax Act, l961-Sec.132-1nterpret'ation of-Sub-sec.(1)-Seizure
of books of account and documents-Sub·sec.(8) rete11tion of books beyond l 80
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days of seizure-Read with sub-secs, (10)"& (12)-lmpose .statutory obligation on
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. R~venue to ·communicate ·Commissioner's appr.oVat and recorded .reasons ofth1
.authorisf!d officer to person en{itled for return of books. Retention of books-·•
Without such conununicati<;n-un/awfut:.
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The Revenue wh~ had seiz~d the books of accoun't and documents of the·
assessee under sec. 132(1)'ofthe Income Tax AC(.1961 tlid not return the SamC
to the assessee after·a,period ·or 180 days of the seizure. The· ·assessce _ fi1ed (:\.
writ petition in the High Court inter a/la praying for a direCtion to the Revenue
fo return thC said book~ of acc<?unt. The assesee submitt~d that i11e retention ·
of the seized books .of accounts and documents bey,ond."the period of 180 days.
was illeg8.l arid in~alid illasmuch as neither the approval accOrded by the.
COmmissioner or' In;ome TaX for si.tCh ·extended reteiltioi:i nor the recorded
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reasons of the Income Tax Offic"er on which. -such approval wa~ based had been
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.communicated to him. A s_ingle Judge of the High Cqurt held t\lat the
retention ··of the books and .documents beyond' 180 days.was unlawful. A
Division Berich ·dismissed.the Re".'ehue's appeal. In these appeals. the Revenue
submitted that sec. 132(8) of the Act cl.id not impose· any obltgatiOn -On·the
~evenue to communicate the· approval° of the cOmmiSsioner "or the recorded
reason of the Income Tilx Officer on which it is based, to the pCrson from whose
Custody the books of accounts and doc~me:nts had been Geized;
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J?ismissing the app_ea_ls,
. HELD : It is true that sub-sec.(8) of sec: 132 or tho Income Tax Act
· 1961 d0es not in terms provide that the CommiSsioner•s ap·proval of" th~
recorded reasons on which it might be based should be communicated to the
concerned pefson but since .the 'person·· cqncerned is bound to be materiaUy
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prejudiced ill the enfqrcement qf his right to have. such bookS and documents
returned to him by being kept ignorant abotit th~_ factUm of fulfilment Of either
of the two conditions l~id down· therein it is obligatory upon the Revenue t~
communicate tfle Commissioner~s approval.as also the recorded reasons to the
person concerned. In the absence Or such .communication the ·commissioner's
decision according _hi~ approval w~ll-not become effective. '(823· H; 824 A]
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Moreover, sub-Se.c.( 10) of si:c. t 32. confers upon t'he person Je8:ally entitled
to -the· return of ·the . seized bQoks anQ do.;Up:ients a. ri~ht to obJect to th~
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818
SUPREME COURT REPORTS
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·approval· given· by the Commissioner under sub:sec.(8) by makinll an llPPli·
· cation to the G'el11:ral Board.stating therein the reason~ for such o6jcctiorl and
under sub-sec.(12) of sec.132 it. is provided that the Central Board may, after
giving the applicant an opportunity of being heard pass such orders as it thinks
1it. It is obvious that without the knowledge of the factuin of thC Commis-
sioner's approval as also of the recorded reasons ori the basis or"which such
approval has been obtained. it will not be possible for the person to whom the ·
seized books or documents belong :to make any eJfective objection to the
approval before the Board and get back his books 'or documents. [824 B-C] ·
The scheme of,sub-secs.(8), (10) and (12) of sec.132 makes it amply clear
that there is a s~atutory obligation on the Reven.ue to Communicate to the
person concerned not merely the Coinmissioner's approval but the recorded
reasons on which the same has been obtained and that Such communication
must be made as expeditiously as possible after tbe passing of the order of
• apprOVat by the Coinmissioner and in default qf such ·expeditious .conimuni~
catiOn any further retention of the seized books or documeiits would bCcome
.. invalid and unlawful. It is obyious that such obligation arises in .regard to
every approval of the Commissioner that might ·have been accorded from time
to time. [824 D-FJ
Appeal by Special leave from the Judgment and Order dated
the 25th June, 1973 of the Calcutta. High Court in· App~ar ·
No. 233 oExcerpt shown. Read the full judgment & AI analysis in Lexace.