Case: C.I.T. West Bengal - Iii &amp; Ors. Etc Vs. Oriental Rubber Works Etc

of the rule nisi, the same ought to have been upheld as binding on the respondent-assessee. In order words, according to the counsel for the revenue, the unauthorised retention of the seized books and documents beyond 180 days, if any, could not render the assessment for the year 1964-65 properly made invalid. Counsel further pointed out that the respondent-assessee had even preferred appeals to higher authorities challenging the said assessment on merits. It may be stated that counsel for the respondent-assessee in this appeal conceded that in all the circumstances of the case the assessment already made on 5-2-1969 should be allowed to stand subject of course to the result of the appeals that have been preferred by the respondent-assessee against it. In this view of the matter, the second contention urged by counsel for the revenue in this appeal has to be accepted and the assessment for the asst. yr. 1964-65 made on 5-2-1969 subject as aforesaid to be upheld. That leaves for consideration the first contention, which as we have indicated earlier, is common to all the appeals.4. In order to decide the aforesaid contention it will be desirable to set out the material provisions of s. 132 of the Act. namely, sub-s. (8), (10) and (12) thereof, which run as follows :"132(8) The books of account to other documents seized under sub-section (1) or sub-section (1A) shall not be retained by the authorised officer for a period exceeding one hundred and eightly 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 (XI of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed.(10) If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub-section (1A) 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.(12) On receipt of the application under sub-section (10) the Board ... may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fir".On a plain reading of the aforesaid provisions it will be clear that ordinarily the books of account or other document that may be seized under an authorisation issued u/sub-s. (1) of s. 132 can be retained by the authorised officer or the concerned ITO for a period of one hundred and eighty days from the date of seizure, whereafter the person from custody such books or documents have been seized or the person to whom such books or documents belong becomes entitled to the return of the same unless the reasons for any extended retention are recorded in writing by the authorized officer the concerned ITO and approval of the Commissioner for such retention is obtained. In other words two conditions must be fulfilled before such extended retention becomes permissible in law : (a) reasons in writing must be recorded by the authorised officer or the concerned ITO seeking the Commissioners approval and (b) obtaining of the Commissioners approval for such extended retention and if either of these conditions is not fulfilled such extended retention will become unlawful and the concerned person (i.e. the person from whose custody such books or documents have been seized or the person to whom those belong) acquires a right to the return of the same forthwith. It is true that sub-s. (8) does not in terms provide that the Commissioners approval or the recorded reasons on which it might be based should be communicated to the concerned person but in our view since the person concerned is bound to be materially prejudiced in the enforcement of his right to have such books and documents returned to him by being kept ignorant about the factum of fulfilment of either of the conditions it is obligatory upon the revenue to communicate the Commissioners approval as also the recorded reasons to the person concerned. In the absence of such communication the Commissioners decision according his approval will not become effective.5. Moreover, sub-s. (10) confers upon the person legally entitled to the return to the seized books and documents a right to object to the approvals given by the Commissioner u/sub-s. (8) by making an application to the Central Board stating therein the reasons for such objection and u/sub-s. (12) it is provided that the Central Board may, after giving the application an opportunity of being heard pass such orders as it thinks fit. It is obvious that without the knowledge of the factum of the Commissioners approval as also of the recorded reasons on the basis of 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 effective objection to the approval before the Board and get back his books or documents. In our view the scheme of sum-ss. (8), (10) and (12) of s. 132 makes it amply clear that there is a statutory obligations on the revenue to communicate to the person concerned not merely the commissioners approval but the recorded reasons on which the same has been obtained and that such communication must be made as expeditiously as possible after the passing of the order of approval by the Commissioner and in default of such expeditious communication any further retention of the seized books or document would become in valid and unlawful. It is obvious that obligation arises in regard to every approval of the Commissioner that might have been accorded from time to time.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]On a plain reading of the aforesaid provisions it will be clear that ordinarily the books of account or other document that may be seized under an authorisation issued u/sub-s. (1) of s. 132 can be retained by the authorised officer or the concerned ITO for a period of one hundred and eighty days from the date of seizure, whereafter the person from custody such books or documents have been seized or the person to whom such books or documents belong becomes entitled to the return of the same unless the reasons for any extended retention are recorded in writing by the authorized officer the concerned ITO and approval of the Commissioner for such retention is obtained. In other words two conditions must be fulfilled before such extended retention becomes permissible in law : (a) reasons in writing must be recorded by the authorised officer or the concerned ITO seeking the Commissioners approval and (b) obtaining of the Commissioners approval for such extended retention and if either of these conditions is not fulfilled such extended retention will become unlawful and the concerned person (i.e. the person from whose custody such books or documents have been seized or the person to whom those belong) acquires a right to the return of the same forthwith. It is true that sub-s. (8) does not in terms provide that the Commissioners approval or the recorded reasons on which it might be based should be communicated to the concerned person but in our view since the person concerned is bound to be materially prejudiced in the enforcement of his right to have such books and documents returned to him by being kept ignorant about the factum of fulfilment of either of the conditions it is obligatory upon the revenue to communicate the Commissioners approval as also the recorded reasons to the person concerned. In the absence of such communication the Commissioners decision according his approval will not become effective.5. Moreover, sub-s. (10) confers upon the person legally entitled to the return to the seized books and documents a right to object to the approvals given by the Commissioner u/sub-s. (8) by making an application to the Central Board stating therein the reasons for such objection and u/sub-s. (12) it is provided that the Central Board may, after giving the application an opportunity of being heard pass such orders as it thinks fit. It is obvious that without the knowledge of the factum of the Commissioners approval as also of the recorded reasons on the basis of 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 effective objection to the approval before the Board and get back his books or documents. In our view the scheme of sum-ss. (8), (10) and (12) of s. 132 makes it amply clear that there is a statutory obligations on the revenue to communicate to the person concerned not merely the commissioners approval but the recorded reasons on which the same has been obtained and that such communication must be made as expeditiously as possible after the passing of the order of approval by the Commissioner and in default of such expeditious communication any further retention of the seized books or document would become in valid and unlawful. It is obvious that obligation arises in regard to every approval of the Commissioner that might have been accorded from time to time.