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In the course of survey conducted u/s133A the authorities seized books of account and certain documents in the case of R.T. Rajeswary v. DIT (105TAX441) (KER.). The High Court directed the authorities to for the return of the original documents and books and allowed the authorities to retain only the photocopies of the said documents, as impounding of original documents would cause adverse affect on the business of the assessee.

In another ruling the MP High Court in the case of Bapurao Vs. Assistant Director of Income-tax (247ITR98) took strong exception to the department action when the department officer in the course of search formed a view that undisclosed investment has been made in certain immovable properties and since it was not practical or feasible to take possession of the those properties, he passed prohibitory order under section 132(1) of the Act directing the petitioner not to part with or dispose of the said properties without his permission.

The High Court held that such power is limited to the articles and things mentioned in sub-section (1). The section does not include within its ambit immovable properties. A plain reading of section 132(1)(B) would show that while the authorised officer has power to enter and search any building, place, vessel or aircraft, he can seize only the books of account, other documents, money, bullion, jewellery or other valuable article or thing kept therein. He has no power to seize the building and the place itself that he has searched or other immovable properties of the assessee. Needless to add that an order of retention under sub-section (5) of section 132 can be made only in respect of things and articles seized under sub-section (1) and not with respect to the building or the place searched. There is absolutely nothing in section 132 which may authorise the officer to seize or retain any immovable property.

In yet another case of Banke Bihari Lal Agarwal Vs. Union of India (226ITR498) the Rajasthan High Court in the context of a writ filed on the ground that the seized records & books of account have not been made available to the assessee for inspection and lost by the department, thus causing difficulty for the assessee in explaining the queries raised by the officer. Calling it as an act of unreasonableness the Rajasthan High Court held that the act of search and seizure is an invasion on the rights of the subjects and cannot be indiscriminately used. Proper care has to be taken at all stages so as to justify even the act of seizure. Whenever a search is made and books of account are seized by the authorised officer, he is responsible for the safe custody of those seized records. If the said record has been handed over to some other officer/custodian, then the other officer or custodian is responsible for it. The protection under section 293 of the Income-tax Act, 1961, is not available to an officer who has lost the books of account so seized, because such an action cannot be said to be done in good faith.

Further the Court held that the books of account could be removed after the seizure in the following circumstances:
(i) The person from whose possession the books of account have been seized may be interested in removing the same so as to escape his liability to tax/prosecution. This could be in connivance with the staff of the officer in whose possession the books of account are.
(ii) The officer in order to harm the assessee may remove books of account, so that he may not be in a position to explain the disputed entries.
(iii) The officer or his staff in connivance with the assessee may remove the books of account.
(iv) There may be gross negligence on the part of the officer seizing the books of account in not taking it with him.

A Government Officer, who has a duty to perform a particular act, has a personal responsibility to see that the State revenue is not lost for any act of his. If the loss of revenue is caused by inaction, he can be made personally responsible. The officers responsible could be taken to task by the Department by taking disciplinary action against them and making them personally responsible for the loss of revenue. They cannot be absolved of personal responsibility on the ground that the act performed was during the course of official duty. If the Department finds that the assessee was responsible for removal of the books, they can file prosecution/ criminal complaint against the assessee. An assessee who has lost his books of account can also claim damages for the loss of the books of account from the officer who has seized the said books of account. The loss or compensation to the assessee cannot be determined in proceedings under article 226 of the Constitution. The proper remedy for the assessee is to file a suit in respect thereof.

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