By K. B. BHUJLE
Advocate
37. Pawan Kumar Goel vs. UOI; [2019] 107
taxmann.com 21 (P&H)
Date of order: 22nd
May, 2019
Sections 132 and 133A of ITA, 1961
– Search and seizure – Survey converted into search – Preconditions not
satisfied – Action illegal and invalid
The respondent tax officials
entered the business premises of the assessee and he was allegedly asked to
sign documents without disclosing their contents. Upon raising a question the
respondents supplied him with a copy of summons u/s 131 of the Income-tax Act,
1961 informing him that the officials wanted to carry out a survey operation
u/s 133A. The assessee submitted that although the summons indicated survey
operations but the procedure was converted into search and seizure which was
impermissible in law.
The assessee therefore filed a writ
petition with a prayer that the process of search and seizure conducted by the
respondents on his business premises be quashed and set aside.
The Punjab and Haryana High Court
allowed the writ petition and held as under:
“(i) The respondents have not demonstrated from any material as to
whether the assessee failed to co-operate, which is an eventuality where the
income-tax authority would be required to record its reasons to resort to the
provisions of section 131(1) and convert the whole process into search and
seizure. But this is completely missing from the process.
(ii) This, to our minds, is fatal to the cause of the respondents
because in a procedure like this which can often turn draconian the inherent
safeguard of at least recording a reason and satisfaction of non-co-operation
to resort to other coercive steps needs to be set out clearly by the income-tax
authority.
(iii) The action of the respondents is therefore bad in the eye of law.
Besides, the summons issued to the assessee was totally vague. No documents
were mentioned which were required of the assessee and neither was any other
thing stated.
(iv) Similarly, the argument of the assessee that provisions of section
131(1) could be invoked only if some proceedings were pending is agreeable. In
the instant case there was only a survey operation and no proceedings were
pending at that point of time. But the income-tax authority exercised the
powers of a court in the absence of any pending proceedings.
(v) Thus,
the income-tax authority violated the procedure completely. Nowhere was any
satisfaction recorded either of non-co-operation of the assessee or a suspicion
that income has been concealed by the assessee warranting resort to the process
of search and seizure.
(vi) For the reasons above, it is to be
concluded that the instant petition deserves to succeed. The impugned action of
the respondents is quashed. The consequential benefits would flow to the
assessee forthwith.
Ordered accordingly.”
