The impounding of documents under Section 131(3) during a survey conducted under Section 133A must comply with the provisions of the Income Tax Act, 1961, including the requirement to record reasons for impounding.

B. Lamare, J.

1. Heard Mr. D. Das, learned counsel for the petitioner and Mr. U. Bhuyan, learned counsel for the respondent.

2. The petitioner is the managing director of Rahman Properties Limited having its registered office at S. S. Road, Lakhtokia, Guwahati. The said company runs a hotel under the name and style of Hotel Dynasty. On November 3, 1997, a group of about 8 to 10 Income Tax officials led by the Assistant Director of Income Tax (Investigation) (respondent No. 3), entered into the office of the Hotel Dynasty and inquired about the petitioner. The said persons identified themselves as Income Tax officials and stated that they had come to survey the premises under Section 133A of the Income Tax Act, 1961 (in short as "the Act"). The officers thereafter entered into the office of Hotel Dynasty, Mohijuli Tea Company Pvt. Limited situated in the same premises and collected records of documents, vouchers books of account from the premises. The above survey continued up to 11.30 p.m. In the process of survey, the Income Tax officials collected a large number of files, documents, books of account, vouchers, etc., from the premises of Hotel Dynasty, Mohijuli Tea Company Pvt. Limited, Dynasty Walford and Texal Patty Tea Private Limited and prepared an inventory of the documents, books of account and other documents and kept them in a separate room and put a paper pasting.

3. On the same day after completion of the survey under Section 133A of the Act, a notice under Section 131 of the Act was served on the petitioner and summoned her to attend the office of respondent No. 3 on November 4, 1997, in connection with the case of Hotel Dynasty. The petitioner accordingly attended the office of respondent No. 3. Thereafter the documents, books of account, etc., were impounded by respondent No. 3 under Section 131(3) of the Act.

4. Respondents Nos. 2 and 3 refuting the claim of the petitioner filed the affidavit in opposition and stated that the documents were not impounded on the basis of the survey conducted under Section 133A of the Act. But the documents, etc., were impounded after notice was issued to the petitioner under Section 131 of the Act and thereafter, the documents were impounded under Section 131(3) of the Act. Therefore, according to the respondents, there is no illegality in the process of survey as the documents were not impounded in the course of survey under Section 133A of the Act.

5. Mr. Das, learned counsel for the petitioner, submits that under the provisions of Section 133A, respondent No. 3 has no occasion to impound the documents in the course of the survey. According to counsel, respondent No. 3 has circumvented the provision of Section 133A by issuing notice under Section 131 of the Act and thereafter, impounded the documents under Section 131(3) of the Act. According to counsel, the books of account, documents and other papers were produced during the course of survey. They were removed in a separate room which was kept under lock and key and also a paper seal was put in the entry to the room. Therefore, the above action of the respondent amounts to impounding the documents. Counsel further contended that the issue of notice under Section 131 of the Act is only a pretext to camouflage the illegal action conducted by the respondent while carrying out the survey under Section 133A.

6. Mr. Bhuyan, learned counsel for the respondents, on the other hand, contended that the documents, books of account and other papers found in the course of the survey were kept in a separate room on the advice of the manager of the Hotel Dynasty for safe custody of the documents which were marked by respondent No. 3 in the course of the survey. The documents were not taken away by the respondent in the course of the survey but the documents were impounded only after the notice under Section 131(1) was served on the petitioner. Therefore, according to counsel, the action was totally in accordance with the provisions of Sec