JUDGMENT
Dave, J.
– This petition filed under the provisions of article 226 of the Constitution of India is directed against the authorisation issued under the provisions of section 132(1) of the Income-tax, 1961 (herein after referred to as ‘the Act’), the notices issued under the provisions of section 158BC of the Act and against initiation of proceedings in pursuance of notice issued under section 142(1) of the Act dated 2-2-2000 by respondent No. 5 to the petitioner firm.
2. The Director of Income Tax (investigation), respondent No. I herein, had given necessary direction under the provisions of section 132(1) for the purpose of having search at the premises of the petitioner-firm and the partners thereof. The search was continued for a period from 21st January to 25-1-2000. In pursuance of the said search which was continued for a period of 5 days, the officer conducting the search had seized books of account and had also recorded statements of several persons. Ultimately, the impugned notice under section 158BC had been issued to the petitioner. Being aggrieved by the said notice, the petitioner has approached this court with a prayer that the said notice be quashed and. the notice under section 142(l) be also quashed.
3. Learned advocate Shri Puj appearing for the petitioner has challenged the above referred actions and notices issued by the respondent-authorities mainly on the following grounds.
4. It has been submitted by the learned advocate Shri Puj that the authorization issued by the Director of Income-tax (Investigation) under section 132 was not proper and, therefore, the entire proceedings regarding the search are illegal. He has elaborated the above referred submission by submitting that as per the provisions of section 132, the Director of Income Tax (Investigation) had not recorded his satisfaction properly and though, in fact, there was nothing on record to give necessary direction for conducting the search, he had given the direction to conduct the search under the provisions of section 132. It has been submitted by him that in absence of any material, he ought not to have exercised his powers under the provisions of section 132.
5. Thereafter, the learned advocate has submitted that after conclusion of the search and seizure, the authorized officer did not act in accordance with law in the matter of banding over the documents and relevant papers to the concerned assessing officer having jurisdiction over the assessee within a period of 15 days from the date of completion of the search as per the provisions of section 132(9A).
6. For the above referred irregularities committed by the respondent authorities, it has been submitted by the learned advocate that notice issued to the petitioner under the provisions of section 158BC and summons issued under section 131(1A) are bad in law.
7. Lastly, it has been submitted by him that though the petitioner is having its place of business at Bhavnagar, by virtue of the provisions of section 127(2) of the Act, its case has been transferred to Rajkot and the said action of the respondent- authorities is also improper and illegal. It has been submitted by him that the concerned authority has not recorded the reasons for which case of the petitioner-assessee was transferred from Bhavnagar to Rajkot and the reasons for doing so were not communicated. It is also the case of the petitioner-assessee that the objections which had been raised by the petitioner in pursuance of the show-cause notice issued to the petitioner were not considered and the reasons, if any, have not been incorporated in the order, which was never communicated to the petitioner. It has, however, been clarified by him that the said order has been placed on record of this court for the first time along with an affidavit-in-reply filed by the concerned officer.
8. On the other hand, the learned advocate Shri B. B. Naik appearing for the respondent-authorities has submitted that the actions taken by the respondent-authorities were just, legal and proper and they were absolutely in accordance with law. He has also filed affidavits-in-reply of Shri Prabhat Jha, Dy. Director of Income-tax (Investigation), Bhavnagar, Shri S.K. Singh, Dy. Commissioner (Income Tax), Central Circle-1, Rajkot and Shri Shahid Khan, Commissioner of Income Tax, Rajkot, dealing with the averments and allegations made in the petition. It has been submitted by him that before effecting the search and before passing an order under section 132, the Director of Income Tax (Investigation), Ahmedabad, had given his authorisation on 8-1-1999 upon information supplied to him by his subordinate officers. He has placed before this court the notes, which are confidential in nature, for the perusal of this Court. He has also submitted that the allegations about irregularities alleged to have been committed in the conduct of the search are not correct and he has submitted that the search was carried out in accordance with law.
9. So far as handing over of the papers as required under the provisions of section 132(9A) is concerned, it has been submitted by him that the authorised officer, who had conducted the search was also an officer having jurisdiction over the petitioner-assessee and an affidavit to that effect has also been filed by the Dy. Director of Income Tax (Investigation), who himself was the authorised officer. In the circumstances, it has been submitted by the learned advocate that there was no violation of the provisions of section 132(9A). Thus, it has been submitted by him that, as procedure required under the Act was duly followed before and after the search and seizure were effected, notices given under section 158BC and summons issued under section 13 1 (1 A) are just, legal and proper.
10. With regard to transfer of the case from Bhavnagar to Rajkot under the provision of section 127(2) of the Act, it has been submitted by him that only after recording reasons and after affording an opportunity of being heard to the petitioner-assessee, the impugned decision with regard to the transfer had been taken.
11. We have heard the learned advocates and have also perused the affidavits filed on behalf of the respondents and the notes on which satisfaction was arrived at by the Director of Income Tax (Investigation) on 8-1-1999.
12. So far as the first contention with regard to non-application of mind by the Director of Income Tax (Investigation) is concerned, we have gone through the notes which were prepared by the respondent- authorities. Upon perusal of the notes, it is very clear that the concerned officer had got substantial information with regard to certain activities and financial status and the way of living of the partners of the assessee-firm, and with relevant facts and figures he had submitted to the higher authorities that there was a just and proper case for having a search so as to have more information with regard to undisclosed income of the assessee-firm and its partners. We have perused the notes which are comprehensive in nature. The details, with facts and figures, have also been stated in the submissions made by the officers lower in rung than the Director of Income-tax (investigation). Officers subordinate to the Director of Income-tax (Investigation) had made their comments and, ultimately, when the notes were placed before the Director of Income-tax (Investigation), he too had applied his mind and had taken the final decision only after arriving at necessary satisfaction. Upon perusal of the notes prepared by the concerned officers, we are of the opinion that there was sufficient application of mind on the part of the Director of Income-tax (Investigation) and by no stretch of imagination it can be said that without having sufficient material or without application of mind, necessary direction with regard to search under section 132 was given by the Director of Income-tax (Investigation) on 8-1-1999.
13. The learned advocate Shri Puj has relied upon the judgment delivered in the case of Madhya Pradesh Industries Ltd. v. Income Tax Officer (1970) 77 ITR 268 (SC) and in case of Janak Raj Sharma v. Director of Inspection (Inv.) (1995) 215 ITR 234. (Punj. & Har.) to substantiate the submissions made by him. Upon perusal of the ratio of the said judgments, it is very clear that in the case of Madhya Pradesh Industries Ltd. (supra), no affidavit was filed by any officer to show as to why he had initiated action under the provisions of section 34(l) of the Indian Income Tax Act, 1922. There was nothing on record to show that the concerned officer had reason to believe that on account of omission or failure on the part of the assessee, income of the assessee had escaped assessment. The Supreme Court had ultimately come to a conclusion that looking to the facts of that case, the officer had no right to initiate proceedings under section 34(l) of the said Act. The facts of the said case cannot be compared with this case for the reason that comprehensive affidavits have been filed by the respondent- authorities and notes with regard to satisfaction arrived at by the concerned officer have also been shown to the Court. So far as the ratio of Janak Raj Sharma (supra)is concerned, the Punjab and Haryana High Court has held therein that before taking any action in pursuance of section 132, the competent authority must have in his possession information and on the basis of such information he must have reason to believe that the conditions as stipulated in sub-clause (a), (b) or (c) of section 1320(1) did exist. As stated here in above, we have seen the notes and upon perusal thereof, we are satisfied that the competent authority had received sufficient information and in pursuance of the information in his possession he had reason to believe that the relevant conditions stipulated in the section had been fulfilled. In the circumstances, we do not agree with the submission made by learned advocate Shri Puj so far as the first submission is concerned.
14. The learned advocate Shri Naik appearing for the respondent has also drawn our attention to certain dates. Search was carried out on 21-1-1999 and it was concluded on 25-1-1999. This petition has been filed on 11 -2-2000 challenging the validity of the search. We are of the view that much delay has been caused in filing this petition because, normally, one should approach the court with due promptness. Here, though the petitioner-firm is financially sound and had taken help of legal advisors at the time and immediately after the search, the petitioner has approached this court after more than a year and, therefore, there is delay in filing this petition so far as grievance regarding the search is concerned. In spite of delay, we have examined the above stated facts on merits of the case and have found that even on merits there is no substance in the first point raised on behalf of the petitioner.
15. Shri Naik has submitted that the provisions of section 132(9A) would not apply in the instant case for the reason that the authorised officer who had carried out the search is also an officer having jurisdiction over the petitioner-assessee. It has been submitted by learned advocate Shri Naik that as the petitioner-assessee was also within the jurisdiction of the authorised officer, it was not necessary for the said officer to send the documents seized by him during the search to the officer having jurisdiction on over the petitioner-assesse. An affidavit stating the said fact has also been filed by the authorised officer. Thus, it is very clear that the provisions of section 132(9A) shall not apply in the instant case as the officer having jurisdiction over the assessee is also the authorised officer, who had effected the search. The authorised officer, in his capacity as an officer having jurisdiction over the assessee is entitled to retain possession of the documents seized by him and, therefore, we do not see any substance in the submission of Shri Puj that the authorised officer had erred by not transferring the seized documents to an officer having jurisdiction over the petitioner-assessee.
16. The next submission which has been made by learned advocate Shri Puj is with regard to the validity of notices issued to the petitioner- firm and its partners in pursuance of section 158BC. It has been submitted by him that as the procedure with regard to transfer of record from one officer to another officer was not followed, notices issued under section 158BC and summons issued under section 132(1 A) are not legal and, therefore, he has prayed for quashing the same. Moreover, it has also been submitted by learned advocate Shri Puj that as the authorisation issued under section 132 was not proper, the notices issued under section 158BC, summons under section 132(IA) and initiation of proceedings under section 142 (1) should be quashed so far as authorisation is concerned. We have already observed hereinabove that, in our opinion, the authorization issued by the Director of Income Tax (Investigation) is just and proper because we had an opportunity to go through the notes and the manner in which he had taken the final decision under the provisions of section 132 of the Act. In the circumstances, we are of the view that the validity of the notices and summons issued under the provisions of the Act cannot be questioned and they are held to be valid, especially in view of the fact that in pursuance of the search some documents have already been seized by the authorised officer.
17. The last submission which has been made by learned advocate Shri Puj is with regard to transfer of the cases from Bhavnagar to Rajkot. It has been submitted by him that in pursuance of the search which had been carried out the cases of the firm and its partners have been transferred to Rajkot. It has been submitted by him that as per the provisions of section 127(2), before transferring the cases from Bhavnagar to Rajkot, the transferring authority ought to have recorded the reasons and communicated the same to the concerned assessee. The submission of Mr. Puj is that the reasons were neither recorded nor communicated and the objections filed by the petitioner in reply to the show-cause notice were not considered by the transferring authority. It has been submitted by him that as observed by the Hon’ble Supreme Court in the case of Ajantha Industries v. Central Board of Direct Taxes (1976) 102 ITR281, the reasons should not only be recorded but they should also be communicated to the assessee. It has been submitted by the learned advocate appearing for the petitioner that the order of transfer was never communicated to the petitioner before filing this petition but the petitioner- assessee was informed only when a copy of the said order was received by the petitioner by way of an annexure to one of the affidavits filed in the present proceedings. Moreover, it has been submitted that the reasons are not recorded in the order.
18. We have gone through the record and we have also perused the reasons which have been given by the concerned authority for transferring the case of the petitioner under section 127. It is clear that the case of the petitioner has been transferred from Bhavnagar to Rajkot for administrative reasons. It has been submitted by learned advocate Shri Naik and it has been stated in the affidavit filed by the Dy. Commissioner of Income Tax (Central Circle-1), Rajkot, that after completion of the work with regard to the search, the work pertaining to assessment was handed over to the office of the Commissioner (CC-1). In the instant case, the search was carried out at Bhavnagar and as there is no office of the Commissioner (CC) at Bhavnagar, for administrative reasons, it was thought it proper by the transferring authority to transfer the case of the petitioner-assessee from Bhavnagar to the office of the Dy. Commissioner (CC-1), Rajkot. The said administrative reason appears to be just and reasonable. Looking to the said administrative reason which has been also incorporated in the reasons recorded by the concerned Commissioner, we do not think that this court should interfere with the said decision with regard to the transfer. It is true that the order with regard to transfer and the reasons for which the case was transferred from Bhavnagar to Rajkot were not communicated to the petitioner before the petition was filed, but, looking to the affidavit-in-reply filed by the respondent concerned and the submissions made by the learned advocate Shri Naik, it is clear that the reasons were recorded by the concerned authority on the file. The said reasons have already been communicated to the petitioner in the present proceedings. In the circumstances, it cannot be said that the order with regard to transfer of the case from Bhavnagar to Rajkot is without any application of mind. It is also true that the petitioner had raised certain objections with regard to the transfer when, by a show-cause notice, the petitioner was called upon to show cause as to why its case should not be transferred to Rajkot. It appears that the said objections were considered but for the administrative exigencies, ultimately the impugned order with regard to transfer was passed under the provisions of section 127. Thus, it cannot be said that the objections filed by the petitioner were not considered by the concerned authority before passing the impugned order with regard to the transfer of the petitioner’s case from Bhavnagar to Rajkot.
19. The learned advocate Shri Naik appearing for the respondent-authorities has cited the judgment delivered in the case of Managing Director, ECIL v. B. Karunakar AIR 1994 SC 1074 and in the case of State bank of Patiala v. S. K. Sharma AIR 1996 SC 1669. The said judgments pronounced by the Hon’ble Supreme Court, which are later in point of time, than the one relied upon by Shri Puj, lay down the law to the effect that at times non-communication of a report or reasons recorded by the authority would not vitiate the entire enquiry or the proceedings, especially when even after furnishing the report or reasons to the concerned persons no different consequences would have followed. Even in the instant case, after considering the objections filed by the petitioner, when the authority had recorded the reasons and had decided to transfer the case of the petitioner and its partners from Bhavnagar to Rajkot, in our opinion, it would not make any difference whether the said reasons were communicated at an earlier point of time or not. Of course, now the reasons have already been communicated and upon perusal of the said reasons, we are satisfied that the said reasons are just and proper and the decision with regard to the transfer is in the interest of administration. Simply because the said reasons are not incorporated in the impugned order, the reasons would not become “on est. Looking to the ratio of the judgments cited by Shri Naik, we do not find any illegality in the order whereby the proceedings have been transferred to the office of the Dy. Commissioner (Central Circle), Rajkot.
20. Looking to the facts of the case and the reasons recorded hereinabove, we do not think that in this writ petition, at this stage, this court should interfere, especially when, as a result of the search, some material has already been found by the authorities. Moreover, even after the assessment is framed, it would be open to the petitioner to challenge the order of assessment by filing an appeal as per the provisions of the Act. The petition, therefore, stands disposed of as rejected with no order as to costs.
