Vildirect: IncomeTax-caselaws-1968-VIL-212-CAL-DT

1968-VIL-212-CAL-DT

Equivalent Citation: [1969] 71 ITR 269

CALCUTTA HIGH COURT

Date: 15.03.1968

JHABARMULL AGARWALLA

KASHIRAM AGARWALLA AND OTHERS.

BENCH

Judge(s) : R. N. DUTT., K. K. MITRA.

JUDGMENT

R. N. DUTT J.- This rule is directed against an order made by the Additional Chief Presidency Magistrate, Calcutta, making over certain documents seized by the police, to the Income-tax Officer, Companies Dist. III, 'E' Ward, Calcutta.

On August 3, 1964, at about 3 p.m. when opposite party No. 1, Kashiram Agarwalla, was removing 9 trunk loads of documents, the police seized them. The same day the petitioner filed a petition of complaint against opposite party No. 1 and his wife, opposite party No. 2, before the Additional Chief Presidency Magistrate. He directed the petition of complaint to be put up on the next day and on August 4, 1964, he examined the petitioner and then sent it to the police for enquiry and report. The police made an enquiry and submitted a report and thereafter the Additional Chief Presidency Magistrate summoned opposite parties Nos. I and 2 under section 424 of the Indian Penal Code. The Income-tax Officer, Companies District III, 'E' Ward, Calcutta, who has been made opposite party No. 3 in this rule, in the meantime filed an application before the Additional Chief Presidency Magistrate on September 21, 1964, under section 131(1) of the Income-tax Act, 1961, read with Order XIII, rule 10, of the Code of Civil Procedure, praying that the seized documents be made over to him for a period of two months for his examination in connection with the assessment proceedings against opposite party No. 1. The Additional Chief Presidency Magistrate at first permitted him to inspect the documents, and, subsequently, on a further petition from the Income-tax Officer, he made an order on October 9, 1964, making over the seized documents to the Income-tax Officer for one month. When opposite parties Nos. 1 and 2 appeared before the Additional Chief Presidency Magistrate, he transferred the case on November 2, 1964, to Shri R. Mahapatra, Presidency Magistrate, for disposal. Opposite party No. 1 in the meantime filed an application for reconsideration of the order making over the seized books to the Income-tax Officer. When the case was transferred, the Additional Chief Presidency Magistrate recorded that the transferee court would consider this application. Subsequently, Shri R. Mahapatra rejected this application for the reconsideration on November 14, 1964. The petitioner thereafter obtained this rule on December 14, 1964, and further proceedings were stayed. We are informed that the documents had not as yet been made over to the Income-tax Officer in compliance with the order of the Additional Chief Presidency Magistrate dated October 9, 1964.

Mr. Dutta appearing before us for the petitioner has contended that the Income-tax Officer made the prayer before the Additional Chief Presidency Magistrate under section 131(1) of the Income-tax Act read with Order XIII, rule 10, of the Code of Civil Procedure, but the powers given to the Income-tax Officer under section 131(1) of the Act do not include the power conferred on the civil court under Order XIII, rule 10, of the Code of Civil Procedure, Section 131(1) of the Income-tax Act reads as follows :

" 131. (1) The Income-tax Officer, Appellate Assistant Commissioner and Commissioner shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :

(a) Discovery and inspection ;

(b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath ;

(d) issuing commissions."

Mr. Dutt submits that under clauses (a) and (c) read together, the Income-tax Officer has the powers of a civil court under Order XI, rule 14, of the Code, but he has no powers under Order XIII, rule 10, of the Code. This argument cannot be accepted. Order XI, rule 14, confers powers on a civil court to call for documents from a party to the suit. But the civil court has also the power to call for documents from a third person. Under Order XVI, rule 1, the civil court has the power to summon a witness to produce a document. Similarly, under Order XIII, rule 10, the civil court has the power to call for a document from some other court. The powers conferred on the Income-tax Officer under section 131 (I) of the Act have not been specified with reference to particular provisions of the Code of Civil Procedure but all the powers which the civil court has under the Code have been conferred on the Income-tax Officer on some specified matters. One such matter is " compelling the production of books of accounts and other documents ". Section 131(1) must, therefore, be construed to confer on the Income-tax Officer all the relevant powers which the civil courts have under the Code of Civil Procedure regarding the production of books of account and other documents. Since Order XIII, rule 10, confers such power on the civil court to call for documents from other courts, the Income-tax Officer too has such powers under section 131(1) of the Act. We should in this connection refer to the decision of S. K. Sen and K. C. Sen JJ. in Union of India v. State. There in that case the Income-tax Officer called for certain documents from the Chief Presidency Magistrate under section 37(1) of the then Income-tax Act read with Order XIII, rule 10, of the Code of Civil Procedure. Section 131(1) of the present Act is in the same terms as section 37(1) of the old Act. Mr. Dutt has, however, submitted that all concerned proceeded in that case on the assumption that the Income-tax Officer can call for documents from a Magistrate under Order XIII, rule 10, of the Code and this point was not specifically raised and considered. It is true that this point was not specifically considered but the decision no doubt indicates the mind of the judges and no objection was raised in this respect on behalf of the assessee that the Income-tax Officer has not the power under Order XIII, rule 10, of the Code to call for documents from a Magistrate. Similar view was also taken by D. N. Sinha J., as his Lordship then was, in Ganpatrai Rawatmull v. Collector, Land Customs, Calcutta. For the reasons we have discussed, we respectfully agree with the views expressed in these cases and we hold that the Income-tax Officer has the power under Order XIII, rule 10, of the Code.

Mr. Dutt has then argued that the documents in question were not part of the record of the case arising out of the complaint of the petitioner and as such the Additional Chief Presidency Magistrate had no jurisdiction to make over the same to the Income-tax Officer. We have said, that the documents were seized by the police before the complaint was filed and the Additional Chief Presidency Magistrate took cognizance of the case but we find that the petitioner in his petition of complaint referred to the seizure of these documents from opposite party No. 1 alleging that opposite party No. 1, being a director of certain companies of which the petitioner was also a director, were secreting the documents and made prayer that the seized books of accounts may be kept in the custody of the court. It is true that the Additional Chief Presidency Magistrate made no formal order for treating the seized documents as seized in this case. But when the Additional Chief Presidency Magistrate took cognizance of the case on the basis of this complaint of the petitioner and opposite parties Nos. 1 and 2 were summoned in consequence, there is no doubt that the Additional Chief Presidency Magistrate treated the seized documents as documents seized in this case as prayed for by the petitioner. Moreover, from the subsequent orders made by the Additional Chief Presidency Magistrate in respect of these documents, it is clear that he was treating these documents as documents seized in this case and subject to his orders. When he directed the documents to be made over to the Income-tax Officer, the petitioner made an application that, in order to avoid delay in the trial of the case, the Income-tax Officer might be directed to take possession of the documents after the disposal of the case. That shows that even the petitioner treated the documents as seized in this case and subject to the orders of the Additional Chief Presidency Magistrate. Then again, we find that after the police seized these documents on August 3, 1964, the police made a report of this seizure to the Additional Chief Presidency Magistrate and the Additional Chief Presidency Magistrate directed the police to keep the documents in its custody. I have been able to trace a copy of this report in the lower court records but I have not been able to trace the relevant order made by the Additional Chief Presidency Magistrate. The learned advocates on either side also tried their best but could not trace that order but I find that the police in a further report submitted to the Additional Chief Presidency Magistrate on September 12, 1964, specifically said that the seized documents were kept in the police malkhana as per the learned court's order dated August 3, 1964. Presumably, therefore, there is no doubt that the learned Magistrate made an order on August 3, 1964, directing the police to keep the documents in its custody. Thus, in either view of the matter, there is no doubt that the Additional Chief Presidency Magistrate was in seisin of the seized documents as part of his records and as such he had jurisdiction to make over the documents to the Income-tax Officer in compliance with his requisition under section 131(1) of the Income-tax Act read with Order XIII, rule.10, of the Code of Civil Procedure. We do not, therefore, see any ground to interfere with the order made by the Additional Chief Presidency Magistrate on December 9, 1964, directing the police to make over the seized documents to the Income-tax Officer.

In the result, the rule is discharged. Let the records be sent down at once and the seized documents be made over to the Income-tax Officer, opposite party No. 3--by breaking open the seals and locks, if necessary. The Income-tax Officer will return the documents after one month of the receipt thereof and thereafter the case should be heard as expeditiously as possible.

Mr. Roy's prayer for stay of operation of this order to enable the petitioner to bring a stay order from the Supreme Court is rejected.

K. K. MITRA J.-I agree.

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