V.G.O. Oak, C.J. - (1.) THIS petition under Article 226 of the Constitution is directed against a search and seizure carried out under Section 132 of the Income-tax Act, 1961 (hereafter referred to as "the Act"). Jawahar Lal Rastogi is the petitioner. His father, Inder Prasad, carried on money-lending business with headquarters at Lucknow. Inder Prasad died in the year 1953. The petitioner became the karta of the Hindu undivided family. The petitioner continued his father's money-lending business. The petitioner is also a partner in a number of industrial concerns. The firms, Rohtas Financiers and Rohtas Pharmaceutical Distributors, have their head offices at Hazratganj, Lucknow, while Messrs. J. E. N. Engineering Corporation has its factory and office at Aishbagh, Lucknow. On September 14, 1964, the Income-tax Officer, A-Ward, Lucknow, directed the petitioner to furnish certain statements. The petitioner was required to furnish the necessary information within 10 days. On September 21, 1964, a number of Income-tax Officers raided the petitioner's residence and premises where the various industries are carried on. These officers searched for documents and goods kept at these places. The search was continued on September 22, 1964. The Income-tax Officers carried away with them documents found by them at these places. These officers also prepared inventories of ornaments and other goods kept at these places. The documents seized in September, 1964, remained with the income-tax authorities till May, 1966, when the writ petition was filed. According to the petitioner, the search and seizure are illegal. He has, therefore, requested that these proceedings be quashed, and the opposite parties be directed to return to the petitioner the books and registers seized.
(2.) SEARCH and seizure are admitted by the opposite parties. They conceded that they carried away a large number of documents from the petitioner's house and business premises. It is maintained that the search and seizure are legal. The main contention of Mr. S.C. Khare appearing for the petitioner is. that the search and seizure were indiscriminate, and are not warranted by the provision of Section 132 of the Act. It is, therefore, necessary to ascertain the true scope of Section 132 of the Act. Section 132 was amended by Act No. 1 of 1965. Section 6 of the Amendment Act states: "Any search of a building or place by ... Income-tax Officer purported to have been made in pursuance of Sub-section (1) of Section 132 of the principal Act before the commencement of this Act shall be deemed to have been made in accordance with the provisions of that sub-section as amended by this Act as if those provisions were in force on the day the search was made ..." So, although the search in question was carried out in the year 1964,. the search and seizure are to be deemed to have been made under Section 132 of the Act as amended by Act No. 1 of 1965. It will, therefore, be sufficient to quote Section 132 of the Act as amended by Act No. 1 of 1965,
(3.) SECTION 132 of the Act states: "(1) Where the Director of Inspection or the Commissioner, in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under Sub-section (1) of SECTION 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under Sub-section (1) of SECTION 131 of this Act, or a notice under Sub-section (4) of SECTION 22 of the Indian Income-tax Act, 1922, or under Sub-section (1) of SECTION 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required, by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as undisclosed income or property. he may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income-tax Officer (hereinafter referred to as the authorised officer) to- (i) enter and search any building or place where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by Clause (i) where the keys thereof are not available; (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search; (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing. (2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in Sub-section (1) and it shall be the duty of every such officer to comply with such requisition. (3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. (5) Where any money, bullion, jewellery or other valuable article or thing (hereinafter in this section and SECTION 132A referred to as the assets) is seized under Sub-section (1), the Income-tax Officer, after affording a reasonable opportunity to the person concerned for being heard and making such enquiry as may be prescribed, shall, within ninety days of the seizure, make an order, with the previous approval of the Commissioner,-- (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act; (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the acts specified in Clause (a) of Sub-section (1) of SECTION 230 A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in Clauses (ii) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized: Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized: Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in Clauses (ii) and (iii) or any part thereof, the Income-tax Officer may, with the previous approval of the Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case. (6) The assets retained under Sub-section (5) may be dealt with in accordance with the provisions of SECTION 132A. (7) If the Income-tax Officer is satisfied that the seized assets or any part thereof were held by such person for or on behalf of any other person, the Income-tax Officer may proceed under Sub-section (5) against such other person and all the provisions of this section shall apply accordingly. (8) The books of account or other documents seized under Sub-section (1) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained: Provided that the Commissioner shall not authorise the retention of the books of account and other documents for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed. (9) The person from whose custody any books of account or other documents are seized under Sub-section (1) may make copies thereof, or take extracts therefrom, in the presence of the authorised officer or any other person empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf. (10) If a person legally entitled to the books of account or other documents seized under Sub-section (1) objects for any reason to the approval given by the Commissioner under Sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents. (11) If any person objects for any reason to an order made under Sub-section (5), he may, within thirty days of the date of such order, make an application to such authority, as may be notified in this behalf by the Central Government in the Official Gazette (hereinafter in this section referred to as the notified authority), stating therein the reasons for such objection and requesting for appropriate relief in the matter. (12) On receipt of the application under Sub-section (10) the Board, or on receipt of the application under Sub-section (11) the notified authority, may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit. (13) The provisions of the Code of Criminal Procedure, 1898 (5 of 1898), relating to searches and seizure shall apply, so far as may be, to searches and seizure under Sub-section (1). (14) The Board may make rules in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer- (i) for obtaining ingress into such building or place to be searched where free ingress thereto is not available; (ii) for ensuring safe custody of any books of account or other documents or assets seized. Explanation 1.--In computing the period of ninety days for the purposes of Sub-section (5), any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. Explanation 2.--In this section, the word 'proceeding' means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may have commenced after such date in respect of any year." It will be seen that Section 132 of the Act refers back to Section 131 of the Act. It is, therefore, necessary to examine the provision of Section 131 of the Act. Section 131 deals with power regarding discovery, production of evidence, etc. Sub-section (1) of Section 131 states : "The Income-tax Officer. ....shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :-- (a) discovery and inspection ;.... (c) compelling the production of books of account and other documents ;...." ;