- (1.) By a notice in writing purported to be a summons under Section 131 of the Income-tax Act, 1961, the respondent, D. K. Guha, the Assistant Director of Inspection (Intelligence), Income-tax Department, required the petitioner personally to attend the office of the said respondent on the 21st June, 1968, as his attendance was required in connection with the proceedings under the Income-tax Act in the case of Aruna Estates Ltd., either personally or through an authorised representative to give evidence and to produce certain books of account and other documents specified overleaf. The petitioner was further notified that, in case of intentional omission to attend and give evidence as required, a fine up to Rs. 500 might be imposed under Section 131(2). The petitioner raised various objections to the said notice and the time for compliance was extended from time to time until finally, by his letter dated 25th June, 1968, the said respondent informed the petitioner that the said summons was issued under Section 131 of the Act in the exercise of his legal jurisdiction. This rule was obtained on the 27th June, 1968, calling upon (1) the Union of India, (2) the Assistant Director of Inspection, and (3) Sri D. K. Guha, who happened to be the said Assistant Director of Inspection, to show cause why appropriate writs should not be issued to quash the aforesaid notice dated the 19th June, 1968, and cancel all proceedings taken thereunder.
(2.) In order to appreciate the contentions raised in this application it would be necessary to examine the following provisions in the Income-tax Act, 1961, hereinafter referred to as "the Act". Section 2(21) defines a "Director of Inspection" to mean a person appointed to be a Director of Inspection and to include a person appointed to be an Additional Director, a Deputy Director or an Assistant Director of Inspection. Section 131, as it stood at the material time, provided as follows : "Section 131.--(1) The Income-tax Officer, Appellate Assistant Commissioner, Inspecting Assistant Commissioner and Commissioner 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, viz:-- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions. (2) Without prejudice to the provision of any other law for the time being in force, where a person to whom a summons is issued either to attend to give evidence or produce books of account or other documents at a certain place and time, intentionally omits to attend or produce the books of account or documents at the place or time, the income-tax authority may impose upon him such fine not exceeding five hundred rupees as it thinks fit, and the fine so levied may be recovered in the manner provided in Chapter XVIID. (3) Subject to any rules made in this behalf, any authority referred to it Sub-section (1) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act : Provided that an Income-tax Officer shall not- (a) impound any books of account or other documents without recording his reasons for so doing, or (b) retain in his custody any such books are documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Commissioner therefor."
(3.) It is to be mentioned in this connection that originally the words "Inspecting Assistant Commissioner" did not appear in Sub-section (1). By Section 38 of the Finance Act, 1965, the name of the Inspecting Assistant Commissioner was inserted between the Appellate Assistant Commissioner and the Commissioner. In this connection it would be necessary to refer to the Finance Bill of 1965 and the Statement of Objects and Reasons therefor later on in this judgment.;