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Section 131 of the Income-tax Act, 1961 - Discovery, production of evidence, power regarding - Assessment year 1969-70 - Whether section 131(3) only requires ITO to record his reasons for impounding any books of account or other documents but does not cast any duty on him to communicate those reasons to an assessee - Held, yes FACTS For the assessment year 1969-70, the assessee-firm filed its return on 15-7-1969, and the assessment proceedings were pending. On 27-9-1969, the assessee-firm had been issued notice under section 143(2). On the date fixed, that is, 3-10-1968, the partner of the firm produced account books for the relevant period. The Income-tax Officer impounded those books under section 131(3) by passing necessary order stating reasons for impounding. On writ, it was contended on behalf of the assessee that no reasons in support of the order impounding were recorded on 3-10-1969, and the order that existed on the order sheet was written after the petition was filed. HELD Section 131(3) only requires the Income-tax Officer to record his reasons for impounding any books of account or other documents but does not cast any duty on him to communicate those reasons to an assessee. In the instant case, the order, in which reasons were recorded, was passed on 3-10-1969, in the presence of partner and his counsel. It may be that the reasons were not communicated to them, which led the assessee-firm and its counsel to believe that no reasons were recorded as the order delivered to them did not contain any reasons. The fact, however, was that Income-tax Officers did record reasons for impounding and retaining the account books and thus complied with the provisions of section 131(3). There was no force in the writ petition which was to be dismissed. Note.: The decision was in favour of the revenue. CASE REFERRED TO Kanodia Brothers v. ITO [1960] 39 ITR 228 (All.). JUDGMENT The petitioner-firm carries on business of commission agents and retailers in food-grains at Rama Mandi, District Bhatinda. The firm submitted its returns of income on the basis of which the assessments were completed up to the assessment year 1968-69. For the assessment year 1969-70 the…

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