1. The petitioner herein invokes the assistance of Section 132(a) of the Income Tax Act. It is submitted that the account books maintained by the petitioner assessee were taken possession of by the assessing Authority on 7.4.1995. It is said that in terms of Section referred to above, these books of accounts and the records could be retained by the Assessing Authority for a period of 180 days. It is further submitted that if these are to be retained beyond that period, then the approval of the Higher authorities named in Section 132(8) is supposed to be obtained. It is stated that not only approval has to be obtained, but the reasons for this retention are supposed to be mentioned and these reasons are supposed to be conveyed to the assessee. According to the petitioner, the assessee was not made aware of the fact that approval has been obtained. IN this situation, it is submitted, that the question of reasons being made available to the petitioner, does not arise.
2. The respondents have, however, controverted the allegations. It is submitted that approval of the Additional Commissioner of Income Tax Investigation Circle, Jammu, was obtained. The first approval was obtained on 13.9.1996. It was again obtained on 17.10.1996, 11.6.1997, 23.6.1998, 15.6.1999 and 21.6.2000. It is submitted that these records are being retained because these are required by the higher hierarchy who are to examine the orders passed by the Assessing Authority.
3. There can be no dispute with the legal proposition. This is to the effect that under Section 132(8) of the Income Tax Act, the authority effecting seizure of the documents can retain them for a period of 180 days and in case these are to be retained beyond that period, then approval of the higher authorities indicated in the sub-section is required to be taken. There is also no dispute with the proposition that the reasons are not only to be recorded, but these are to be conveyed to the assessee. The maximum limit for which the account books or other documents can be retained, has been indicated in the proviso to the said Sub-Section. This is 30 days after the proceedings are completed.
4. So far as the legal position is concerned, the learned counsel for the petitioner has rightly placed reliance on a decision of the Supreme Court reported as Commissioner of Income Tax and Ors. v. Oriental Rubber Works, TC 62 R 172. In this decision, the Supreme Court of India has observed that reasons for retaining the records are to be reduced into writing. This has to be done by the authorised officer. Approval is to be sought. Thereafter, the approval as also the reasons for retention are supposed to be conveyed to the assessee. Similar view has again been expressed in a number of decisions. They are, as under:-
Mahabir Prosad Poddar v. Commissioner of Income Tax West Bengal, III and Ors. 77 ITR 343 (Cal) Hanuman Pershad Ganeriwala v. Director of Inspector (Income Tax) and Ors. 93 ITR 419 (Delhi).
A decision of this Court reported as Director of Inspection and Ors. v. K. C. & Co. and Ors., 185 ITR 475 also supports the legal position put across by the learned counsel for the petitioner.
5. The counsel appearing for the respondents does not dispute the correctness of the legal aspect as noticed in the judgments referred to above. He, however, submits that the approval was sought. It is further submitted that reasons for retention of accounts were also recorded. It is further stated that the fact that the records are going to be retained was duly conveyed to the petitioner. For this, the letter of approval, as noticed above, is in the records produced in the Court. The first approval is dated 6.10.1995, This is addressed to Shri Mohan Mangotra B-68, Greater Kailash-I, New Delhi. The reasons for retention of the records as indicated in the communication are that these records were required for completing the investigation. The latest approval is dated 21.6.2000. This has again been addressed to the petitioner at 68-Greater Kailash-I at New Delhi. The reasons have thus again been indicated therein. Therefore, to say that the approval was not obtained or that reasons have not been recorded, is a argument which is factually incorrect. So far as the communication addressed to the petitioner are concerned, the presumption would be that these were duly conveyed. In the face of the record maintained by the respondents, the argument raised by the petitioner that the orders of approval of the reasons were not conveyed to the petitioner, cannot be sustained. As a matter of fact, there are no factual averments made in the writ petition that the orders by which the records were retained or the approval(s) were never conveyed to the petitioner, and what has been stated is that there was non-compliance of Section 132(8) of the Income Tax Act. This has not been elaborated. From a perusal of the record, it becomes apparent that the requisite approvals have been duly addressed to the petitioner. The presumption would, therefore, be in favour of the Revenue, so for as the addressing of communications are concerned.
6. In view of the above, there is no merit in this petition. This is dismissed. The respondents are, however, directed to return the records to the petitioner in terms of the proviso and also to complete the proceedings at the earliest, preferably within this year.
Disposed of accordingly.