Compliance with Section 132(8) of the Income Tax Act, including obtaining approval for retention of documents, recording and conveying reasons for retention to the assessee, and adhering to the maximum limit for retention after proceedings are completed.

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 & 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:-

Commissioner of Income Tax. West Bengal III v. Mahabir Prasad Poddar, 3 ITR 215 (Cal);

Mahabir Prosad Poddar v. Commissioner of Income Tax West Bengal, III & 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 & Ors. v. K.C. & Co. & 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 appro

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