LexCOMMISSIONER OF INCOME-TAX versus JAWAHAR LAL RASTOGI
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c D F G H COMMISSIONER OF INCOME-TAX V. JAWAHAR LAL RASTOGI May 7, 1970 [J.C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.J 5 81 Income t<1x Act, 1961, as amend.ed by Finance Act 1965, s. 13:!(5)- St'izure of doc:tonent.\' and retention heyond 180 clay.s-J\/o recor,f of reasons by l.T.O. or appro~·at Df Conunissiuner of such r'1tention--Lega- lity of rt•tt•111ion, On September 14, 1964 the Income tax Officer called upon the as;essee to furnish within I 0 days statements relatin~ to four assessment years ending on March 3 I. 1960. The asse<see did not furnish the infcrmation by the 19th and on that date on the report of the Income-tax Officer. the Commissioner authorised the Income tax Officer to ••arch the premises of the assessee. On September 21st and 22nd the premises were searched and a large number of documents- were scizc<l and retained till May 1966, that is, for a period of 19 months. Jn a writ petition ficl<l by the asscsscc, the High Court, follo\\·ing its own decision in Serh B.ro<. v. CJ.T., 62 J.T.R. 44 held that the searcJo was indiscriminate and beyond the· scope of s. 132 of the Income-tax Act, 1961 In appeal to this Court. HELD: (i) The decision relied on by the High Court was o'errule<l by this Court in /.T.0. v. Seth Bros., 74 I.T.R. 836, but it vas held that the power of search must he exerciseJ strictly in accordanc;;: \\'ith the law and only for the purposes for which the law authorises it to b.:- .:xer- cised. Whether the action of the Commissioner in a oarticui~tr case amounted to indiscriminate search and hcyond the sCope of -... 13~ \\10uld dcpenJ on the cvi<ler.ce in the case. f-583 E: 584 E-F] (2) Jn the present case, there "'·as no or<ler of the authorities rcccrJing reasons for retainin.(! the documents seized beyond 180 days. n0r \\'as there any approval of the Commissioner for such retention. Therci0re the retention \vas contrary to the terms of s. 132(8) of the Act as am~ndcd hy lhe lncomc·lax ( Amcndmenl) Acl. 1965. 1585 C-Dl ( 3) Though failure to record reasons hy the l.T.0. and want of approval by the Commissioner for retainin.!Z the documants beyond 180 Jay.;. \Vere not urged before the High Court as grounds for release of the documents. when it was found that the documents were retained for 19 month.;;. the department should have tendered evi<.lence of such ·record of re::1-.on.;; or approval hy the Commissioner if it v.:as the case of the dcpartn1cnt that the retention of the documents coul<.l he supported by such rcaso!l;; or approval. 1585 E-C] C1v1t APPELLATE JuR1s01cnoN: Civil Appeal No. 16 of 1970. Appeal bv special leave from the judgment and order dated May 22, 1969 o.f the Allahabad High Court in Civil Misc. Writ No. 588 of 1966. 582 5UPREME COURT REPORTS [1971] l S.C.R: Jagadish Swarup, Solicitor-General, R. N. Sachthey and B. D. Sharma, for the appellants. G. C. Sharma and P. K. Mukherjee, for the respondent. The Judgment of the Court. was delivered by Shah, J. Jawahar Lal Rastogi--hereinafter called 'the assessee-is a Hindu Undivided Family which carries on the business of money-lending at Lucknow and is also interested as a partner in different firms engaged in the business of manufac- turing barbed wire, pharmaceuticals, etc. On September 14, 1964, the Income-tax Officer, A-Ward, ~ailed upon the asses~ee to furnish within 10 days certain information with regard to its income and assets. On September 17, 1964 the Income-tax Officer submitted to the Comn1issioner of Income-tax a report requesting that he be authorised to emer and search the premises of the assessee. The Commissioner by his order dated September 19, 1964, authorised en\ry and search after recording reasons for his belief that it was necessary to carry out the search. On September 21 and 22, 1964, the pre- mises of the assessee were searched and a large number of documents were seized and were taken away to the Income-tax Officer. The Income-tax Office.r also prepared inventories of the ornaments and other goods kept in the premses searched. After the seizure of the books of account and other documents the case wa~ fixed for hearing before the Income-tax Officer on several occasions, but no substantial step was taken. In May 1966 the assessee filed a writ petition in the High Court of Allahabad challenging the validity of the search made by the Department contending that it "was illegal and in excess of the
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