T.s.kumaraswamy v. The Director General Of Income Tax (Inv),Tamil Nadu & Pondicherry, New

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE T.RAJA W.P.No.28986 of 2018 and W.M.P.Nos.33882,33887 & 33888 of 2018 T.S.Kumaraswamy..Petitioner -vs- 1.The Director General of Income Tax (Inv),Tamil Nadu & Pondicherry, New No.46, Old No.108,MG Road, Nungambakkam, Chennai-34.2.The Principal Director of Income Tax (Inv),Investigation Wing, New No.46, Old No.108MG Road, Nungambakkam, Chennai-34. 3.The Additional Director of Income Tax Investigation,Unit-3, New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 4.The Deputy Director of Income Tax Investigation,Unit-3(2) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 5.The Deputy Director of Income Tax Investigation,Unit-4(3) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 6.The Assistant Commissioner of Income TaxCircle-I, No.138/3, LMR Shopping Arcade,III Floor, Salem Road, Namakkal-637 001. .. Respondents Prayer:- Writ Petition filed under Article 226 of the Constitution ofIndia, praying for the issue of a Writ of CertiorarifiedMandamus, calling for the records of the fifth respondent,contained in the Prohibitory Order dated 06.07.2018 and quashthe same as illegal, arbitrary and contrary to law andconsequently restrain the respondents, their subordinates, agents and employees from preventing the petitioner from using,operating or withdrawing sums from his bank accounts,receivables and all assets and properties of the petitioner. The petitioner has come to this Court questioning theProhibitory Order dated 06.07.2018 issued by the fifthrespondent and seeking a direction restraining the respondents,their subordinates, agents and employees from preventing himfrom using, operating or withdrawing sums from his bankaccounts, receivables and all assets and properties. 2.Mr.A.R.L.Sundaresan, learned senior counsel appearing forthe petitioner pleaded that when the impugned prohibitory orderpassed under Section 132(3) of the Income Tax Act prohibitingnot to remove, part with or otherwise deal with any document,money, bullion, jewellery or other valuable article or thingexcept with the previous permission of respondent officer, theyhave prevented the petitioner from using the bank account inquestion beyond the period of sixty days. Although the timeperiod of sixty days under Section 132(8A) had already elapsed,the respondents are still illegally preventing the petitionerfrom using the bank accounts in question on the basis of theimpugned prohibitory order which is blatantly illegal. He wouldfurther submit that when the prohibitory impugned order failedto specify that they shall operate only for a period of sixtydays and also did not even specify all the bank accounts thatare to be covered by the order, even after the expiry of theprohibitory order, the respondents have not intimated the banks,as a result, the petitioner was not able to operate the bankaccount. Therefore, the impugned prohibitory order passed underSection 132(1) had elapsed after a period of sixty days byvirtue of Section 132(8A) and the petitioner can operate all thebank accounts. Hence, the impugned order is liable to bequashed. 3.A counter affidavit in W.P. No.31021 of 2018, which isconnected to this writ petition, filed by the second respondentshows that the prohibitory order had lapsed due to the passageof time. It is relevant to extract para 27 as under: 3.A counter affidavit in W.P. No.31021 of 2018, which isconnected to this writ petition, filed by the second respondentshows that the prohibitory order had lapsed due to the passageof time. It is relevant to extract para 27 as under: ... The petitioner's claim that the respondentofficials controlled and operated the restrained bankaccounts is far from truth. Once a bank account isrestrained u/s.132(3), no one can operate it unlessthe restraint is revoked. In any case, the operationof restraint u/s.132(3) has since ceased after expiryof 60 days from the conclusion of the search. Thiscontention therefore is infructuous. When theprovisions of Section 132(3) which are in publicdomain and are very clear and unambiguous about theperiod of restraint and in the absence of anymandatory requirement of intimating the parties, itwas not necessary to inform about the said fact. Inany case, neither the petitioner nor the banks havesought any clarification or communication from therespondent Investigating Officer. From the abovestated circumstances it is abundantly clear that theprohibitory order issued is not to harass thepetitioner and in any case since 60 days have lapsed,the said grievance has no legs to stand on. 4.Since the respondents have also admitted in the counteraffidavit that the operation of the prohibitory order passedunder Section 132(3) had since ceased after expiry of sixty daysfrom the date of the order and in view of the order dated18.12.2018 passed in W.P. No.30692 of 2018 allowing the writpetition on the basis of the counter affidavit of therespondents, the writ petition deserves to be allowed. It isalso pertinent to extract paras 7 and 8 of the said order asunder: '7.It is useful to extract paragraph 3 of the counteraffidavit of the respondent hereunder: “3.I submit that prohibitory order issued u/s.132(3)of the Income Tax Act is valid for a period of 60 daysonly and thereafter it automatically ceases itseffect. In any case, the operation of restraintu/s.132(3) has since ceased after expiry of 60 daysfrom the conclusion of the search. When the provisionsof Section 132(3) are very clear and unambiguous aboutthe period of restraint and in the absence of anymandatory requirement of intimating the parties, itwas not necessary to inform about the said fact.” 8.In the light of the stand taken by the respondentthat the prohibitory order passed under Section 132(3)of the Income Tax Act on 05.07.2018 has lapsed afterthe expiry of 60 days, the writ petition standsallowed. No costs.' 5.In the light of the above order, as I mentioned above,since the prohibitory order passed under Section 132(3) of theIncome Tax Act on 06.07.2018 already ceased to exist, the writpetition stands allowed and the petitioner is entitled tooperate his bank accounts. No costs. Consequently, connectedMiscellaneous Petitions are closed. Sd/- Assistant Registrar //True Copy// Sub Assistant RegistrarvgaTo1.The Director General of Income Tax (Inv)Tamil Nadu & PondicherryNew No.46, Old No.108MG Road, Nungambakkam,Chennai-34.2.The Principal Director of Income Tax (Inv),Investigation Wing,New No.46, Old No.108MG Road, Nungambakkam,Chennai-34.3.The Additional Director of Income Tax Investigation,Unit-3, New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 4.The Deputy Director of Income Tax Investigation,Unit-3(2) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34.Unit-3(2) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 5.The Deputy Director of Income Tax Investigation,Unit-4(3) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34.Unit-4(3) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 6.The Assistant Commissioner of Income TaxCircle-I, No.138/3, LMR Shopping Arcade,III Floor, Salem Road, Namakkal-637 001.Circle-I, No.138/3, LMR Shopping Arcade,III Floor, Salem Road, Namakkal-637 001. +1cc to Mr.A.P.Srinivas, Advocate, S.R.No.4980 4.The Deputy Director of Income Tax Investigation,Unit-3(2) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34.Unit-3(2) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 5.The Deputy Director of Income Tax Investigation,Unit-4(3) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34.Unit-4(3) New No.46, Old No.108MG Road, Nungambakkam,Chennai-34. 6.The Assistant Commissioner of Income TaxCircle-I, No.138/3, LMR Shopping Arcade,III Floor, Salem Road, Namakkal-637 001.Circle-I, No.138/3, LMR Shopping Arcade,III Floor, Salem Road, Namakkal-637 001. +1cc to Mr.A.P.Srinivas, Advocate, S.R.No.4980 +2cc to Mr.R.Parthasarathy, Advocate, S.R.No.5019 W.P.No.28986 of 2018 and W.M.P.Nos.33882,33887 & 33888 of 2018 GP(CO)CS/29/01/2019