Law:

Section:

Section 133A, read with section 131, of the Income-tax Act, 1961 - Survey - Whether where ITO himself admitted that account books were produced for survey and that extracts from loose sheets were taken by him, his case that Manager 'M' did not afford requisite facilities for placing identification marks or taking extracts was a complete lie, and, thus, there was no occasion for exercising powers under section 131 - Held, yes - Whether ITO had no powers while conducting a survey under section 133A, to impound any document and as such his action in impounding and taking away books of accounts and other documents belonging to assessee-firm was without authority of law, and, therefore, they should be returned - Held, yes FACTS During survey conducted by the ITO under section 133A at the assessee premises, books of accounts and other documents were inspected in the presence of 'M', the Manager, and 'J'. the firm's agent doing its income tax cases. Both 'M' and 'J' after initial refusal, ultimately signed some loose sheets of which they denied knowledge. A notice under section 131 was issued on 'J' to produce books of account and the loose sheets of which details were given in the notice. According to the statement of 'M', the loose sheets were in the handwriting of 'C'i.e. accountant of the firm. Those documents were seized by the department and taken away. Thereupon, notice addressed to 'C', the accountant, was also served on 'J'. As 'C' did not appear before the revenue authorities, another notice under section 131(2) was issued on the assessee-firm to show cause why penalty should not be levied for failure to produce 'C'. On writ, the assessee-firm while challenging the notices, prayed that the authorities be directed not to make any abstracts from the seized documents and not to initiate proceedings on the basis of the seized documents. The petitioners also sought return of the documents and loose sheets. HELD Under section 133A of 1922 Act the ITO has the power to require a proprietor and employee, etc., who may be present at the time of survey to afford him the necessary facility to inspect the books of account or other documents and on their inspection to…

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