Direct Tax Online

DAYARAM AGARWAL vs.INCOME TAX OFFICER

HIGH COURT OF ORISSA

P.K. Balasubramanyan, C.J. & A.S. Naidu, J.

Original Jurisdiction Case No. 12845 of 2001

Oct 30, 2002

(2002) 70 CCH 0999 OriHC

(2003) 180 CTR 0067, (2003) 261 ITR 0419, (2002) 125 TAXMAN 1110

Legislation Referred to

Sections 131, 132(8), 133A, Art. 226

Case pertains to

Asst. Year

Decision in favour of:

Revenue Partly, Assessee Partly,

WritMaintainabilitySecond writ petition for same reliefEarlier writ petition challenging assessment, impounding of
books and refusal to supply certified copies of statement and list of inventory disposed of on the ground of availability of
remedy of appealAfter filing appeal against order of assessment, assessee again filing writ petition for the remaining
reliefsSame not maintainableAssessee ought to have pressed for the remaining reliefs in the earlier writ
petitionAssessee having not been granted liberty to file the writ petition on the same cause of action, same is not
maintainable

Held

The petitioner had filed OJC No. 7452 of 2001 in the Court earlier, challenging the order of assessment as well as impounding
of the books of account and for supply of the certified copies of the statement recorded and the list of the inventory taken. The
Court disposed of the writ petition with the observation that since the impugned order therein was appealable, it was for the
petitioner to invoke that statutory remedy. The Court did not grant any relief to the petitioner regarding the impounding of the
books of account, the non-supply of certified copies of the statement and the list of inventory. According to the petitioner, he
has filed appeal against the order of assessment. The petitioner might and ought to have pressed the challenge to the order
impounding the books of account and not giving of copies of statement of the son of the petitioner recorded at the time of
survey and the list of inventory prepared on that occasion and sought an adjudication of those aspects. He not having done so,
really, the petitioner is barred from filing the present writ petition for those reliefs since he does not have the right to file yet
another writ petition on a cause of action already put forward in the earlier writ petition, unless he was specifically given the
liberty to do so. There is no plea that any such liberty was reserved in favour of the writ petitioner.

(Paras 2 & 3)

Conclusion
Liberty having not been granted by the Court, petitioner cannot maintain a subsequent writ petition on the same cause of
action.

In favour of

Revenue

IT authoritiesDiscovery, production of evidence, etc.Impounding of books of accountBooks of account were not

impounded at the time of survey under s. 133AAssessee was called upon to produce the books of account under s. 131
subsequent to the survey and before completion of the assessmentHence, impounding was not per se illegal Assessing
authority has had reasonable opportunity to verify the books of account and there was no justification in retaining them
indefinitely notwithstanding the extent of power of retentionDirection issued to opposite parties not to retain the books
beyond 30th Nov., 2002

(Para 5)

Held

The books of account were not impounded at the time of the survey under s. 133A. Subsequent to the survey and before
completion of the assessment, the assessee was called upon to produce the books of account in apparent exercise of power
under s. 131 of the Act. Hence the impounding cannot be held to be per se illegal . Maruti Mills (P) Ltd. vs. Union of India
(2000) 159 CTR (Raj) 142 : (2001) 250 ITR 348 (Raj) distinguished.

(Para 5)

The books of account were taken possession of on 23rd March, 2000, and they are being retained with the AO even on the date
of the hearing of the writ petition. On the facts and in the circumstances of the case, the authority has had the reasonable
opportunity to verify the books of account and there is no justification in retaining the books of account indefinitely, whatever
might be the extent of power available to the AO with the permission of the superior officer concerned. Therefore, the opposite
parties are directed not to retain the books of account of the assessee impounded on 23rd March, 2000, beyond 30th Nov.,
2002.

(Para 6)

Conclusion

Impounding of books was not per se illegal where they were not impounded during survey but subsequent to survey when
assessee produced them in compliance of notice under s. 131; assessing authority having availed of reasonable opportunity to
verify the books of account impounded by it, direction issued not to retain the books beyond 30th Nov., 2002.

In favour of

Assessee (partly) and Revenue (partly)

Counsel appeared:

B.M. Patnaik, R. Sharma, S.S. Samanta, S. Mohanty & A. Mishra, for the Petitioner : None, for the Respondent

P.K. BALASUBRAMANYAN, C.J.

Judgment
 The premises of the assessee, the petitioner herein, was survey ed on 9th Feb., 2000, by the ITO under s. 133A of the IT Act,
1961 (hereinafter referred to as the Act). The petitioner thereafter was issued a notice under s. 131 of the Act calling upon the
petitioner, the assessee, to appear before the concerned authority along with his books of account. The assessee appeared and
sought time to produce the books of account. The proceeding was adjourned to 14th Feb., 2002. On that date, according to the
petitioner, he had taken the books of account with him. He also made an application for copies of the statement recorded from
the son of the assessee on the date the premises of the assessee was survey ed and also for a copy of the list of inventory taken
on that date. They were not furnished to the assessee. According to the Department, they were not furnished to the assessee
since the assessee had not made an appropriate application for the copies after remitting the requisite fees in that behalf. Since
the stand adopted by the Department is that if the assessee complies with the requirements and makes an appropriate
application, the copies will be issued, that aspect need not detain this Court further.

2. It is seen from the writ petition that the petitioner had filed OJC No. 7452 of 2001 in this Court earlier, challenging the order
of assessment as well as impounding of the books of account and for supply of the certified copies of the statement recorded
and the list of the inventory taken. This Court disposed of the writ petition with the observation that since the impugned order
therein was appealable, it was for the petitioner to invoke that statutory remedy. This Court did not grant any relief to the
petitioner regarding the impounding of the books of account, the non-supply of certified copies of the statement and the list of
inventory. According to the petitioner, he has filed appeal against the order of assessment. Since the order impounding the
books of account and the request to issue the certified copies of the statement recorded and the list of inventory prepared when
the survey was made, was not appealable, the assessee submits that he has again filed the present writ petition.

3. In our view, the petitioner might and ought to have pressed the challenge to the order impounding the books of account and
not giving of copies of statement of the son of the petitioner recorded at the time of survey and the list of inventory prepared on
that occasion, and sought, an adjudication of those aspects. He not having done so, really, the petitioner is barred from filing
the present writ petition for those reliefs since he does not have the right to file yet another writ petition on a cause of action
already put forward in the earlier writ petition, unless he was specifically given the liberty to do so. There is no plea that any
such liberty was reserved in favour of the writ petitioner.

4. Though there are some disputes regarding the factual details, the broad facts are that the premises of the petitioner was
survey ed, the statement of the son of the petitioner was recorded since the petitioner was not available in the premises at that
time and some stock inventory was taken. The point projected on behalf of the Department is that it was not a complete
inventory. It is thereafter, that the assessee was directed to produce the books of account and the books of account were
impounded. It is the case of the Department that the concerned statutory authority had permitted the AO to keep the books of
account impounded until completion of the assessment. It is contended that the assessments for the years other than the year
1998-99 are yet to be completed.

5. Counsel for the petitioner relied on a decision of the High Court of Rajasthan in Maruti Mills (P) Ltd. vs. Union of India
(2000) 159 CTR (Raj) 142 : (2001) 250 ITR 348 (Raj). It is laid down in that decision that the IT authorities cannot impound
the books of account and other documents during the course of a survey . Here, in the case on hand, the books of account were
not impounded at the time of the survey under s. 133A of the Act. Subsequent to the survey and before completion of the
assessment, the assessee was called upon to produce the books of account in apparent exercise of power under s. 131 of the
Act. Hence the impounding cannot be held to be per se illegal .

6. For the purpose of this, we do not think it necessary to discuss the law in detail, and to consider the inter-play of ss. 131,132
and 133A of the IT Act. Here, the books of account were taken possession of on 23rd March, 2000, and they are being retained
with the AO even on the date of the hearing of the writ petition. We think that on the facts and in the circumstances of this
case, the authority has had the reasonable opportunity to verify the books of account and there is no justification in retaining
the books of account indefinitely, whatever might be the extent of power available to the AO with the permission of the
superior officer concerned. We, therefore, direct the opposite parties to return the books of account to the assessee by 30th
Nov., 2002. In other words, the opposite parties are directed not to retain the books of account of the assessee impounded on
23rd March, 2000, beyond 30th Nov., 2002.

The writ petition is allowed to the above extent.

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Customized Notes
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