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PUNJAB & HARYANA HIGH COURT
J.M.Tandon, J.
Gheru Lal Bal Chand
Versus
Income-tax Officer, A Ward
Civil Writ No. 1787 of 1978,
Decided On : JANUARY 12, 1982
INCOME TAX - SURVEY - JURISDICTION - ITO, A-WARD, BHATINDA HAD JURISDICTION TO EXERCISE POWER OF SURVEY UNDER SECTION 133A OF THE ACT VIS-A-VIS THE PETITIONER - NOTICES ISSUED UNDER SECTION 131 AND ORDER PASSED UNDER SECTION 131(3) OF THE ACT WERE LIABLE TO BE QUASHED.
Fact of the Case:
The petitioner, a partnership firm, was surveyed by the ITO, A-Ward, Bhatinda, under Section 133A of the Income Tax Act, 1961. The ITO issued notices under Section 131 of the Act and impounded the petitioner's records under Section 131(3) of the Act. The petitioner challenged the notices and the order in a writ petition.
Finding of the Court:
The court held that the ITO, A-Ward, Bhatinda, had jurisdiction to exercise the power of survey under Section 133A of the Act vis-a-vis the petitioner. However, the court held that the ITO had no jurisdiction to resort to the powers under Sub-sections (1) and (2) of Section 131 of the Act while surveying the accounts of the petitioner under Section 133A on 11th April, 1978, as the petitioner had not refused or evaded to co-operate. The court also held that the order impounding the petitioner's records was liable to be struck down as it was violative of Sub-section (4) of Section 133A and the petitioner had not contravened the provisions contained in Sub-section (6) of Section 133A of the Act during the process of survey.
Issues: 1. Whether the ITO, A-Ward, Bhatinda, had jurisdiction to exercise the power of survey under Section 133A of the Act vis-a-vis the petitioner? 2. Whether the notices issued under Section 131 and the order passed under Section 131(3) of the Act were valid?
Ratio Decidendi: 1. The court held that the ITO, A-Ward, Bhatinda, had jurisdiction to exercise the power of survey under Section 133A of the Act vis-a-vis the petitioner as the petitioner's case was transferred by the ITO, B-Ward, to the ITO, A-Ward, with effect from 1st October, 1977, and the petitioner had received advance tax notice under Section 210 of the Act from the ITO, A-Ward. 2. The court held that the notices issued under Section 131 and the order passed under Section 131(3) of the Act were not valid as the ITO had no jurisdiction to resort to the powers under Sub-sections (1) and (2) of Section 131 of the Act while surveying the accounts of the petitioner under Section 133A on 11th April, 1978, as the petitioner had not refused or evaded to co-operate. The court also held that the order impounding the petitioner's records was liable to be struck down as it was violative of Sub-section (4) of Section 133A and the petitioner had not contravened the provisions contained in Sub-section (6) of Section 133A of the Act during the process of survey.
Final Decision: The court quashed the notices issued under Section 131 and the order passed under Section 131(3) of the Act and directed the respondent to return the records taken into possession in pursuance of the order to the petitioner.
J.M.Tandon, J.
1. M/s. Gheru Lal Bal Chand, Bhatinda (petitioner), is a partnership firm which was constituted with effect from 14th October, 1975, under a partnership deed executed by and between its five partners on 29th December, 1975. It has its office and business premises in Subhash Market at Bhatinda. It carries on the business of commission agency and that of sale and purchase of agricultural commodities like cotton, etc. The petitioner filed income-tax return for the assessment year 1977-78 on 30th July, 1977. The income-tax return for the assessment year 1978-79 was due to be filed by 30th July, 1978. On 11th April, 1978, the ITO, A-Ward, Bhatinda, visited the business premises of the petitioner for purpose of survey under Section 133 A of the I.T. Act (hereinafter "the Act"). During the course of survey, the ITO issued notice (annex. P-1) at 11-30 a.m. to the petitioner, which reads as under :
"Summons to assessees under Section 131 of the Income-tax Act 1961. Dated 11-4-1978 To M/s. Gheru Lal Bal Chand, Bhatinda, Whereas our attendance is required in connection with the proceedings under the Income-tax Act in your case-------you are hereby required personally to attend my office at camp (your business premises) on the 11th day of April, 1978, "at 11-30 oclock a.m. there to give evidence and/or to produce either personally or through an authorised representative the books of account or other documents specified overleaf, and not to depart until you receive my permission to do so. Without prejudice to the provisions of any other law for the time being in force, if you intentionally omit to so attend to give evidence or produce the books of account or documents, a fine up to Rs. 500 may be imposed upon you under Section 131(2) of the Income-tax Act, 1961. (Sd.) Income-tax officer, Appellate Assistant Commissioner, Income-tax Officer, A-Ward, Bhatinda. SEAL OVERLEAF Books of account or documents to be produced. Complete account books for the period relevant for the assessment years 1977-78, 1978-79 and current account books."
2. The ITO again issued similar notices, annexs. P-2 to P-4) at 1-15 p.m. 4 p.m. and 4-45 p.m., respectively, with respect to other account books, etc. The petitioner complied with the directions contained in the notices, annexs. P-1 to P-4, and produced all the records detailed therein. The ITO impounded the records produced by the petitioner under Section 131(3) of the Act, vide order dated 11th April, 1978 (annex. P-5). The details of the records impounded are contained in annexs. A and B attached to annex. P-5. The petitioner has assailed the notices (annexs. P-1 to P-4) and the order (annex. P-5) in the present writ and has prayed that the ITO, A-Ward, Bhatinda (respondent), be directed to return the records.
3. The learned counsel for the petitioner has argued that the ITO, A-Ward, Bhatinda, had no jurisdiction to exercise the power of survey under Section 133A of the Act vis-a-vis the petitioner inasmuch as the latter was within the jurisdiction of the ITO, B-Ward, Bhatinda, in pursuance of the order of the Commissioner of Income-tax (annex- P-6), The contention is without merit. It is correct that the Commissioner, vide order annex. P-6 dated 15th June, 1977, passed in exercise of the power conferred under Section 124 of the Act, placed the petitioner under ITO, B-Ward, Bhatinda. It has been averred in the return filed by the respondent that with effect from 1st October, 1977, a change in jurisdiction on territorial basis was made whereunder the areas marked by the territorial divisions of Bhatinda, known as Post Office Bazar, Dhobi Bazar, Hospital Bazar and Industrial Estate of Bhatinda were allocated to ITO, A-Ward, Bhatinda. The Subhash Market, in which the petitioners business premises are situate, is a by lane of Dhobi Bazar. The case of the petitioner was transferred by the ITO, B-Ward, to the ITO, A-Ward, with effect from 1st October, 1977. In the general index register main
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