R.T. RAJESWARY and Another vs DIRECTOR OF INCOME TAX (INV.) and Others

G. SIVARAJAN, J.:

The matter arises under the IT Act, 1961. The first petitioner is the proprietress of M/s Khiran Steel Industries situated at Kannanalloor, Kollam. She is also having a furniture showroom attached to the above industries in the name and style ''Khiran Steel Furniture'' at Kottiyam. The second petitioner is the husband of the first petitioner, who is also running two industrial units called ''General Engineering Company'' at Kannanalloor and ''P.R. Industries'' at Umayanalloor. Both the petitioners are assessees on the files of the ITO, Ward No. 2, Kollam. There was a survey of the industrial unit of the first petitioner on 1st July, 1998, by respondents 2 and 4 u/s 133A of the IT Act and the second respondent prepared 4 lists of documents produced and marked as Annexure A, Annexure I, Annexure II and Annexure EI along with a report dt. 1st July, 1998.

A copy of the report was served on the second petitioner. The documents listed in the 4 Annexures were seized by the said respondents, after issuing summons (Ext. P2). The second petitioner was also served with a copy of the proceedings dt. 1st July,1998 (Ext. P3) issued by the second respondent under s. 131(3) of the Act. Subsequently the first respondent issued Ext. P4 proceedings dt. 3rd July, 1998, under the proviso to s. 131(3) of the Act granting permission to the 2nd respondent to retain the books of accounts impounded for a period upto 31st March, 1999. Exts. P4(a) and P4(b) are the list of documents so retained. Petitioners have filed this original petition seeking to quash Exts. P2, P3, P4, P6.They also seek for a direction to the respondents to return to them all the documents referred to in Annexures A, 1, 11 and III attached to Ext. Pl.

The case of the petitioners is that the statements contained in Ext. P3 that the assessee has produced the books and documents before the 2nd respondent as required in the summons Ext. P2 is totally false. Respondents 2 and 4 have illegally and arbitrarily taken the said documents from their premises. It is also stated that respondents have harassed the petitioners like anything even though there was no fault on their part.

It is also stated that by the survey and the removal of the documents, the business of the petitioners has been adversely affected and that in spite of the specific requests made by the petitioners to respondents 2 and 4 for return of the impounded documents the same has not so far been returned.

A statement is filed on behalf of the respondents. Many of the allegations made in the original petition are denied in the said statement. It is also stated that the books impounded were handed over to the ITO, Special Ward, Kollam, who is the AO of the second petitioner. It is also stated that the seized books are required by the IT Department for the assessment of the second petitioner. However, it is stated that if the books are not tampered on release of the same to the petitioners, it can be released on the condition that the same will be produced as and when required by the AO.

I have heard Sri N. Nandakumara Menon, learned counsel appearing for the petitioners and Sri George K. George, Addl. Central Government standing counsel for taxes appearing for respondents. The counsel for the petitioner submitted that the survey and seizure of the documents are stated to be under s. 133A of the Act and that respondents 2 and 4 have no power under the said section to seize any such documents. According to the counsel, the survey and seizure of the documents are without jurisdiction. The counsel for respondents, on the other hand, submitted that the survey was conducted in accordance with the provisions of s. 133A and the books of accounts and other documents were seized as provided under s. 131(3) of the Act. He submitted that the second and fourth respondents acted wholly within the jurisdiction and there is no illegality in the procedure adopted by them. The counsel further submitted that the main relief sought for by the petitioners, as could be seen from the original petition is for return of the documents seized and that in the statement itself respondents have stated that they are prepared to return the documents provided the petitioners do not tamper with the same and the same will be produced before the assessing authority as and when required.

1 have considered the matter. The survey and seizure of documents were on 1st July, 1998. It is seen that the petitioners had made representations thereafter for return of the documents. But respondents have not returned the same for the reason that the said documents are required for the purpose of completing the assessment of the second petitioner. It is also stated that the said documents are presently with the assessing authority of the second petitioner. Now that the respondents have no objection to return the documents impounded on 1st July, 1998, there will be a direction to the second respondent to issue necessary instructions to the ITO, Special Ward, Kollam, who is at present in possession of the records to return the same to the second petitioner and obtain necessary acknowledgment for the same. It is open to the respondents to take photocopies of the said documents and get the same authenticated by the petitioners. This will dispel the apprehension entertained by respondents that the petitioners will tamper the books of accounts, etc., if the same are returned. The records will be returned within period of two weeks from today for which the second respondent will issue necessary directions to the petitioners also. 1 make it clear that I have not pronounced anything with regard to the validity or otherwise of the survey and the seizure of the documents.

The original petition is disposed of as above.

OPEN