COMMISSIONER OF INCOME TAX Vs. MAHABIR PRASAD PODDAR

JUDGEMENT

(1.) The short points involved in this appeal and the other two appeals No. 155 of 1970 and No. 156 of 1970 are, firstly, whether the revenue has a statutory obligation to communicate to the first and second respondents the approval granted by the Commissioner of Income-tax for detention of books of account and documents seized under a warrant issued under Section 132(1) of the Income-tax Act, 1961, hereinafter referred to as the Act, and, secondly, whether an opportunity of being heard should have been given to the persons interested in the return of the books and documents before an order of approval is made by the Commissioner of Income-tax under Section 132(8) of the Act.

(2.) On August 30, 1965, several officers of the income-tax department entered the office of the first respondent at 62, Bentinck Street, his chamber at 3, Bysak Digbi Lane, and his residence at 14/1, Hariram Goenka Street, on the authority of warrants of authorization issued under Section 132 of the Act. After the search, the officers seized a large number of books, documents and papers belonging to the first respondent. Some of the documents seized were returned to the first respondent on February 8, 1966; some further documents were returned on February 10, 1966, and again on February 16, 1966. It is common case that certain other documents and papers are still being kept by the revenue and have not been returned to the first respondent in spite of demands. Aggrieved by this decision, the first respondent obtained a rule nisi for appropriate writs and orders directing the return of the books, documents and records. This rule was made absolute by a judgment and order dated January 9, 1970, against which this appeal has been preferred.

(3.) Section 132(8) of the Act provides that books of account and other documents which have been seized under Section 132(1) of the Act shall not be retained for a period exceeding 180 days from the date of seizure, unless reasons for retaining the same are recorded by the Income-tax Officer in writing and the approval of the Commissioner is obtained for such retention. Relying on this provision in the Act, it was argued by counsel for the appellants that the statute imposed no obligation on the revenue to communicate the approval of the Commissioner of Income-tax to the party. In other words, it was contended that, in the absence of a mandatory provision in the Act providing for communication of the order of approval, the revenue argued, that the order for search and seizure is not directed against a particular individual or a firm or a company. The authorization directs search and seizure of books from certain premises. The search and seizure are not directed against the premises. The search and seizure are not directed against a particular party so that the Income-tax Officer would communicate an order of approval to the party from whom books have been seized. It may be, it was argued, that books and documents lying in a particular premises may belong to different parties, and it may as well be, it was argued, that the revenue would not know to whom the books belong. It was for that reason, it was further submitted, that no provision had been made in Section 132(8) of the Act to communicate the approval of the Commissioner of Income-tax to any party.