Cwp/2488/2016 Of Sewak Industries v. Deputy Commissioner Of Income Tax Yamuna Nagar

IN THE HIGH COURT OF PUNJAB AND HARYANAATCHANDIGARH CWP No.2488 of 2016Date of decision:38.2.2016 Sewak Industries | ...... Petiti Deputy Commissioner of Income Tax (Circle) Yamuna Nagar .... Responde CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTALHON’ BLE MRS. JUSTICE RAJ RAHUL GARG 1. Whether Reporters of local papers may be allowed to see thejudgment?2. To be referred to the Reporters or not?YES3. Whether the judgment should be reported 1n the Digest? Present: Ms. Rashmi Chopra, Advocate with Mr. Rahul Sinha, Advocate for the petitioner. Ajay Kumar Mittal,J. ].Challenge in this writ petition is to the conduct of surveyproceedings under section 133A of the Income Tax Act, 1961 (in short,“the Act’) which according to the learned counsel for the petitionerwere VOIab initio. Further prayer has been made for quashing theorder and notice dated 26.10.2015, Annexure P.8 and P.9 respectively.D.A few facts relevant for the decision of the controversyinvolved as narrated in the petition may be noticed. The petitioner 1s apartnership firm. It is engaged in the manutacturing and sale ofwooden ply and operates from Yamuna Nagar. A survey under Section CWP No 2488 of 2016 133A of the Act was conducted from 13.3.2013 to 15.3.2013 at thebusiness premises of the petitioner. The said operation continued forthree days. Statements of various persons were recorded on oath andcertain documents were impounded. Order dated 14.3.2013, AnnexureP.2 under Section 133A(3)(1a) of the Act was passed impoundingcertain books of account/documents. QOn the basis of the documentsimpounded during the survey proceedings and the statements recorded,scrutiny assessment proceedings for the assessment year 2013-14 wereinitiated and notice was issued to the petitioner. In reply, the petitionerfiled copy of the income tax return, audit report, balance sheet and copyof Form No.26AS. The respondent issued notice under section 143(2)of the Act to the petitioner to which it replied by giving all the requisitedetails. The petitioner raised certain objections before the respondentwith regard to the proceedings under section 133A of the Act. Therespondent rejected the objections vide Annexure P.1. The impugnednotice and order dated 26.10.2015, Annexures P.8 and P.9 had also beenissued. Hence the instant writ petition by the petitioner. 3.We have heard learned counsel for the petitioner.4AThe primary challenge laid in the writ petition is to surveycarried out at the premises of the petitioner from 13.3.2013 to15.3.2013. 5.It would be expedient to refer to relevant portion of Section133A of the Act relating to survey prevalent on the date of survey. It is **Power of survey 133A.(1) Notwithstanding anything contained in any otherprovision of this Act, an income-tax authority may enter— (a) any place within the limits of the area assigned tohim, orhim, or (b) any place occupied by any person in respect of whomhe exercises Jurisdiction, or (c) any place in respect of which he is authorised for thepurposes of this section by such income-tax authority,who 1s assigned the area within which such place issituated or who exercises jurisdiction in respect of anyperson occupying such place,at which a business orprofession 1s carried on, whether such place be theprincipal place or not of such business or profession, andrequire any proprietor, employee or any other person whomay at that time and place be attending in any manner to,or helping in, the carrying on of such business orprofession— (1) to afford him the necessary facility to inspect suchbooks of account or other documents as he may requireand which may be available at such place, (11) to afford him the necessary facility to check orverify the cash, stock or other valuable article or thingwhich may be found therein, and (111) to furnish such information as he may require as toany matter which may be useful for, or relevant to, anyproceeding under this Act. (1) to afford him the necessary facility to inspect suchbooks of account or other documents as he may requireand which may be available at such place, (11) to afford him the necessary facility to check orverify the cash, stock or other valuable article or thingwhich may be found therein, and (111) to furnish such information as he may require as toany matter which may be useful for, or relevant to, anyproceeding under this Act. Explanation.—For the purposes of this sub-section, aplace where a business or profession 1s carried on shallalso include any other place, whether any business orprofession 1s carried on therein or not, in which theperson carrying on the business or profession states thatany of his books of account or other documents or anypart of his cash or stock or other valuable article or thing relating to his business or profession are or 1s kept. (2) XXXXXXXXXX (3) An income-tax authority acting under this section may,— (1) if he so deems necessary, place marks ofidentification on the books of account or other documentsinspected by him and make or cause to be made extractsor copies therefrom, (1a) impound and retain in his custody for such period ashe thinks fit any books of account or other documentsinspected by him; Providedthat such income-tax authority shall not— (a) impound any books of account or other documents except after recording his reasons for so doing; or (b) retain in his custody any such books of account orother documents for a period exceeding ten days(exclusive of holidays) without obtaining the approval ofthe Chief Commissioner or the Chief Commissioner orthe Director General or the Director General therefor, asthe case may be, (11) make an inventory of any cash, stock or other valuablearticle or thing checked or verified by him, (111) record the statement of any person which may beuseful for, or relevant to, any proceeding under this Act : (4) XxxxXxx (5) Where, having regard to the nature and scale ofexpenditure incurred by an assessee, 1n connection with anyfunction, ceremony or event, the income-tax authority 1s of theopinion that it is necessary or expedient so to do, he may, at“any time after such function, ceremony or event, require theassessee by whom such expenditure has been incurred or anyperson who, in the opinion of the income-tax authority, 1slikely to possess information as respects the expenditureincurred, to furnish such information as he may require as toany matter which may be useful for, or relevant to, any proceeding under this Act and may have the statements of theassessee or any other person recorded and any statement sorecorded may thereafter be used 1n evidence 1n any proceedingunder this Act. (6) XXXXXXXXXX” 6.From the perusal of the above provision, we find that theIncome-tax Authority has power to enter into any place in respect of whichit has the jurisdiction or any place occupied by any person in respect ofwhom it exercises jurisdiction where a business or profession 1s carried on(Business premises) and inspect the books of account and other documentsor to check or to verify the cash, stock or other valuable article or thingwhich may be available at such place and gather such other informationwhich may be useful for, or relevant to, any proceedings under this Act. It isalso empowered to impound the books of account or other documents andrequire the assessee or any other person to furnish necessary information inrespect of the expenditure in connection with the function, ceremony orsuch other events at any time after such a function, ceremony or such otherevents which may be useful for, or relevant to, any proceedings under theAct and record the statements of the assessee or such other person whichcan be used in evidence 1n any proceedings under the Act. Tq In accordance with the provisions of Section 133A of theAct, survey operation was conducted at the business premises of thepetitioner on 13.3.2013 which continued for three days. During theoperation, statements of various persons like partner, supervisor andlabourers were recorded. Certain documents were also impounded. Thepetitioner filed objections on 3.9.2015 (Annexure P.7) after expiry ofAct, survey operation was conducted at the business premises of thepetitioner on 13.3.2013 which continued for three days. During theoperation, statements of various persons like partner, supervisor andlabourers were recorded. Certain documents were also impounded. Thepetitioner filed objections on 3.9.2015 (Annexure P.7) after expiry of CWP No 2488 of 2016 about two and a half years challenging the survey by terming it to be‘search and seizure’ operation which after consideration were rejectedby the respondent. The impugned order and notice dated 26.10.2015were issued. In the present case, survey was conducted on 13.3.2013and the present petition has been filed after about three years on3.2.2016 of the survey when notice for framing of assessment had beenissued on 26.10.2015 challenging the survey. This had been done onlyto thwart the assessment proceedings initiated by the Assessing Officerby issuing statutory notices to the assessee. Further, the pleas that havebeen raised in the grounds of challenge in the writ petition to assail thesurvey under Section 133A of the Act fall in the domain of the disputedquestions of fact for which writ jurisdiction under Articles 226/227 ofthe Constitution of India is not an appropriate remedy. We find no errorin the jurisdiction exercised by the respondent authorities,Consequently, finding no merit in the petition, the same is herebydismissed. (Ajay Kumar Mittal)Judge February 08, 2016 ?3#? (Raj Rahul Garg)sudge