judgement:
vil Appeals Nos. 700 to 703 of 1965.
Appeals by special leave from the judgment and order dated March 27, 1964 of the Allahabad High Court in Civil Misc.
Writs Nos. 3302, 3381, and 3382 of 1963.
Sukumar Mitra, S.K. Aiyar, R.H. Dhebar and B.D. Sharma, for the ,appellant (in all the appeals).
M.C. Chagla, S.C. Manchanda, P.N. Pachauri, P.N. Duda and D.N. Mukherjee, for respondent No. 1 (in C.A. No. 700 of 1965).
S.C. Manchanda, P.N. Pachauri, P.N. Duda and D.N. Mukherjee for respondent No. 1 ' (in C.A. No. 701 of 1965).
S.C. Manchanda, P.N. Pachauri, S.M. Jain and B.P. Maheshwari, for respondent No. 1 (in C.As.
702 and 703 of 1965).
The Judgment of the Court was delivered by Shah, J.
M/s. Seth Brothers run a flour mill in the name and style of "Imperial Flour Mills".
From April 1, 1953 to March 1956 the business was carried on by M/s. Seth Brothers, of which the partners were Baikunth Nath and Vishwa Nath.
Between March 1956 and March 31, 1957, the business was carried on by Baikunth Nath, Vishwa Nath, Dr. Manmohan Nath, Mrs. Rama Rahi and Mrs. Sushila Devi.
On April 7, 1957 Mrs. Prem Lata was admitted as a partner.
The partners were engaged in carrying on other businesses in the names of Seth Brothers (Private) Ltd., Nath Brothers (Private) Ltd., and Meerut Cold Storage and General Mills.
The owners of the business were, year after year, assessed to income tax in respect of the income arising in the course of the business.
On March 14, 1963 the Income tax Officer, Meerut issued a notice under section 148 of the Income tax Act, 1961, intimating M/s. Seth Brothers that there was reason to believe that their income chargeable to tax had escaped assessment and it was proposed to reassess this income for the assessment year 1954 55.
In response to the notice Baikunth Nath and Vishwa Nath flied a return under protest.
In the meantime information was received by the Income tax Commissioner, U.P., that M/s. Seth Brothers were maintaining "duplicate records" and were evading assessment of their true income and that it was necessary to seize the records which may be found at "Shanti Niketan," Meerut in which M/s. Seth Brothers carried on the business of Imperial Flour Mills and other business.
The Commissioner of Income tax, U.P., on May 29, 1963 drew up a memorandum that on a report of the Income tax Officer, D Ward,, Meerut requesting for 604 authorisation under section 132 of the Income tax Act, 1961, to.
enter and search the premises of M/s. Seth Brothers, he was satisfied about the need for the issue of the authorisation.
The Commissioner also issued an order in Form 45 prescribed under Rule 112 of the Income tax Rules, 1962, authorising two Income tax Officers R. R. Agarwal and R. Kapoor to enter the premises known as "Shanti Niketan", at Meerut and to search for and seize such books and documents as may be considered relevant or useful for the purpose of the proceeding of reassessment, and to place identification marks thereon and to convey them to the Income tax Office.
On the. 7 and 8 of June, 1963 the premises described in the order were searched and account books and certain documents found therein were seized and were carried to the Income tax Office.
M/s. Seth Brothers then moved a petition in the High Court of Allahabad, for an order quashing the proceedings of the Income tax authorities.
Petitions were also filed by Nath Brothers (Private) Ltd., Seth Brothers (Private) Ltd. and Seth Brothers, Meerut for the same relief.
By these petitions they claimed writs of certiorari quashing the letters authorising search of the premises at Shanti Niketan, and writs of mandamus directing the Income tax Officer to return all the books, papers and articles seized during the search and for writs of prohibition restraining the Income tax Department from using any information gathered as a result of the search.
It was submitted by the petitioners that K.L. Ananda, Income tax Officer and Satya Prakash an "ex employee" of M/s. Seth Brothers had given false information to the Deputy Director of Inspection with a view to blackmail the partners of M/s. Seth Brothers, and that the order of search was made by the Commissioner of Income tax at the direction of the Deputy Director of Inspection, that the action of the Income tax Officer in searching the premises and in seizing the books of account was malicious and that in any event section 132 of the Income tax Act, 1961, and the rules framed thereunder, were violative of the fundamental freedoms guaranteed by articles 14, 19(1)(f) & (g) and 31 of the Constitution.
Affidavits were filed on behalf of M/s. Seth Brothers.
It was affirmed that "the so called duplicate records" seized by the Income tax Officer were copies of the books of account and that action had been taken by the Commissioner of Income tax, not on his own initiative but at the behest of the Directorate of Inspection.
In reply to the contentions raised by the assessees several affidavits sworn by Officers of the Income tax Department were filed.
The Commissioner of Income tax stated in his affidavit that before issuing letters of authorisation and the warrant of search he was satisfied that it was necessary to take action 605 under section 132 of the Indian Income tax Act, 1961, and that the letters of authorisation were not issued at the direction of the Directorate of Inspection.
The Income tax Officers stated that in consequence of the search a large number of "duplicate account books and records" maintained by M/s. Seth Brothers were recovered, that the search was carried out according to law and in the presence of two of the partners of the firm and their advocates, that all the documents seized were relevant for the purpose of reassessment, that there was close connection between the different business activities of the partners of M/s. Seth Brothers and that all the documents which were seized were in relation to those activities.
The Deputy Director of Inspection in his affidavit stated that he did not give any direction to the Commissioner to issue authorization for search and seizure.
The High Court of Allahabad held on a consideration of the averments made in the affidavits filed on l behalf of M/s Seth Brothers and the revenue that "there was reason to believe" that instructions were issued by the Directorate of Inspection for a general raid and seizure of all account books and papers which may be found at the premises of the firm; that some out of the documents seized by the Income tax Officers were irrelevant for the purpose of any proceeding under the Act: that besides the documents belonging to M/s Seth Brothers the Income tax Officers seized documents relating to the transactions of the allied concerns; that marks of identification were not placed on certain documents at the time they were seized; that the documents seized were detained by the Income tax Officer for more than two months; and that the police force employed during the raid was excessive.
The High Court concluded: "It is true that there was no iII will between the . (partners of Seth Brothers) on one side and respondent Nos. 1, 3 and 4 (Commissioners of Income tax, U.P. & Punjab and Income tax Officer, Special Investigation Circle A, Meerut) on the other side.
But the extent of the seizure was far beyond the limits of section 132 of the Act.
The action was mala fide in the sense that, there was abuse of power conferred on Income tax Officers by section 132 of the Act.
The act being main fide, the proceedings .should be quashed by this Court by issuing a writ of mandamus.
" The Income tax Officer, S.I. Circle has appealed to this Court with special leave.
Section 132 as originally enacted by Act 43 of 1961 was substituted by a modified provision by the Finance Act of 1964 which in its turn was replaced by section 1 of the Income tax (Amendment) Act, 1965.
By section 8 of that Act it was provided, inter alia, 606 that any search of a building or place by an .
Income tax Officer purported to have been made in pursuance of sub section
(1) of section 132 of the principal Act shall be deemed to have been made in accordance with the provisions of that sub section as amended by the Act of 1965 as if those provisions were in force on the day the search was made .
The relevant part of section 132 as substituted by the Income tax (Amendment) Act, 1965 may, there.fore, be set out: "132.
Search and seizure. (1) Where the Director of Inspection or the Commissioner, in consequence of information in his possession, has reason to believe that (a) any person to whom a summons under sub section (1) of section 37 of the Indian Income tax Act,1922 (XI of 1922), or under sub seCtion (1) of section 131 of this Act, or a notice under sub section (4) of ' section 22 of the Indian Income tax Act, 1922,or under sub section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents.
which will be useful for, or relevant to.
, any proceeding under the Indian Income tax Act, 1922 (XI of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been disclosed for the purposes of the Indian Income tax Act, 1922 (XI of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), he may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income tax Officer (hereinafter referred to as the authorised officer) to (i) enter and search any building or place where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; 607 (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search; (iv) place marks of identification on any books of account or other documents or make ' or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing.
(2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government or of both, to assist him for all or any of the purposes specified in sub section (1) and it shall be the duty of every such officer to comply with such requisition.
(3) The authorised officer may, where it is not practicable to seize any such books of account, other document, money, bullion, jewellery or other valuable article or thing, serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub section.
. . . . . . (8) The books of account or other documents seized under sub section (l ) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained: Provided (13) The provisions of the Code of Criminal Procedure, 1898 (V of 1898), relating to searches and seizures shall apply, so far as may be, to searches and seizure under sub section (1).
" 608 The Central Board of Direct Taxes has, in exercise of the power conferred by section 295(1) of the Act, framed r. 112 prescribing the procedure to be followed by the Commissioner and the authorised officers.
The Commissioner or the Director of Inspection may after recording reasons order a search of premises, if he has reason to believe that one or more of the conditions in section 132(1) exist.
The order is in the form of an authorization in favour of a subordinate departmental officer authorising him to enter and search any building or place specified in the order, and to exercise the powers and perform the functions mentioned in section 132 (1 ).
The Officer so authorised may enter any building or place and make a search where.
he has reason to believe that any books of account or other documents which in his opinion will be useful for, or relevant to any proceeding under the Act, may be found.
The Officer making a search may seize any books of account or other documents and place marks of identification on any such books of account or other documents or make or cause to be made extracts or copies therefrom and may make an inventory of any articles or things found in the course of any search which in his opinion will be useful for, or relevant to.
any proceeding under the Act, and remove them to the Income tax Office or prohibit the person in possession from removing them.
He may also examine on oath any person in possession of or control of any books of account or documents or assets.
The section does not confer any arbitrary authority upon the Revenue Officer.
The Commissioner or the Director of Inspection must have, in consequence of information, reason to believe that the statutory conditions for the exercise of the power to order search exist.
He must record reasons for the belief and he must issue an authorization in favour of a designated officer to search the premises and exercise the powers set Out therein.
The condition for entry into and making search of any building or place is the reason to believe that any books of account or other documents which will be useful for, or relevant to, any proceeding under the.
Act may be found. ' If the Officer has reason to believe that any books of account or other documents would be useful for, 0r relevant to, any proceedings under the Act, he is authorised by law to seize those books of account or other documents, and to.
place marks of identification therein, to make extracts or copies therefrom and also to make a note or an inventory of any articles or other things found in the course of the search.
Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the tax payer, the power must be exercised strictly in accordance with the law and only for the purposes for which the law authorizes it to.
be exercised.
If the action of the Officer issuing the authorization, or of the designated 609 Officer is challenged the Officer concerned must satisfy the Court about the regularity of his action.
If the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the Court.
If the conditions for exercise of the power are ' not satisfied the proceeding is liable to be quashed.
But where power is exercised bona fide, and in furtherance of the statutory duties of the tax officers any error of judgment on the part of the Officers will not vitiate the exercise of the power.
Where the Commissioner entertains the requisite belief and for reasons recorded by him authorises a designated Officer to enter and search premises for books of account and documents relevant to or useful for any proceeding under the Act, the Court in a petition by an aggrieved person cannot be asked to substitute its own opinion whether an order authorising search should have been issued.
Again, any irregularity in the course of entry, search and seizure committed by the Officer acting in pursuance of the authorisation will not be sufficient to vitiate the action taken, provided the Officer has in executing the authorisation acted bona fide.
The Act and the Rules do not require that the warrant of authorisation should specify the particulars of documents and books of account: a general authorisation to search for and seize documents and books of account relevant to.
or useful for any proceeding complies with the requirements of the Act and the Rules.
It is for the Officer making the search to exercise his judgment and seize or not to seize any documents or books of account.
An error committed by the Officer in seizing documents which may ultimately be ' found not to be useful for or relevant to the proceeding under the Act will not by itself vitiate the search, nor will it entitle the aggrieved person to an omnibus order releasing all documents seized.
The aggrieved party may undoubtedly move a competent Court for an order releasing the documents seized.
In such a proceeding the Officer who has made the search will be called upon to prove how the documents seized are likely to be useful for or relevant to a proceeding under the Act.
If he is unable to do so, the Court may order that those documents be released.
But the circumstance that a large number of documents have been seized is not a ground for holding that all documents seized are irrelevant or the action of the Officer is mala fide.
By the express terms of the Act and the Rules the Income tax Officer may obtain the assistance of a police officer.
By sub section
(13) of section 132 the provisions of the Code of Criminal Procedure, 1898, relating to searches apply so far as may be, to searches under section 132.
Thereby it is only intended that the officer concerned shall issue the necessary warrant, keep present respectable persons of the locality to witness the search, and generally carry out the search 610 in the manner provided by the Code of Criminal Procedure.
But sub s.(2) of section, 132 does not imply that the limitations prescribed by section 165 of the Code of Criminal Procedure are also incorporated therein.
In Income tax Officer, A Ward, Agra & Others vs Firm Madan Mohan Demma Mal and Another(1), it was observed that the issue of a search warrant by the Commissioner is not a judicial or a quasi judicial act and even if the Commissioner is enjoined to issue a warrant only when in fact there is information in his possession in consequence of which he may form the necessary belief, the matter is not thereby subject to scrutiny by the Court.
Section 132 of the Income tax Act does not require specific mention by description of each particular document which has to be discovered on search: it is for the Officer who is conducting the search to decide whether a particular document found on search is relevant for the purpose or not.
That statement of the law, in our judgment, accurately states the true effect of section 132.
The mere fact that it may ultimately be found that some document seized was not directly relevant to any proceeding under the Act or that another officer with more information at his disposal may have come to a different conclusion will not be a ground for setting aside the order and the proceeding for search and seizure.
The authorisation issued by the Commissioner was, in the view of the High Court, open to challenge on the ground that the Commissioner did not apply his mind to the existence of circumstances which justified the exercise of the power to issue authorisation.
The action of the Income tax Officers who.
searched the premises was quashed on the ground that they seized some documents which were irrelevant to the process of reassessment.
In our judgment, in reaching their conclusion that the Commissioner acted at the behest of the Director of Inspection, the High Court ignored important evidence on the record.
It was averred in the petition of M/s Seth Brothers that "(56) It appears that the Deputy Director of Inspection at the instigation of Shri K.L. Nanda and Sri Satya Prakash, without making any enquiries or having any material, 'ordered a raid for search and seizure of all ,the account books and papers, which could be found.
(57) That, according to such directions of the Directorate, the Commissioner of Income tax, U.P. Lucknow, was made to issue authorisations under section 132 of the Act of 1961 in favour of opposite Parties Nos. 3 and 4 to search out the (1) 611 premisses of Shanti Nikethan ',Civil Lines, Meerut, premises of 'Shanti Niketan 'and to seize the account 'books, documents and papers, which could be recovered therefrom.
. . . . . .
The High Court observed that even though a number of affidavits were ' filed by the Income tax authorities, no reference to paragraph 56 of the writ petition was made and the "only affidavit filed by Shri A.L.Jha, Commissioner of Income tax was vague in the extreme".
The allegation in paragraphs 56 & 57 of the writ petition made no definite allegation.
that the Commissioner of Income tax acted at the behest of the Deputy Director of Inspection and not on his own satisfaction reached in consequence of information in his possession.
In the verification clause Baikunth Nath stated that the contents of paragraph 57 were true on information received from Deputy Director of Inspection (Investigation), Income tax, Central Revenue Buildings, New Delhi.
but said nothing about the contents of paragraph 56.
The 'affidavits filed on behalf of the Income tax Department specifically denied the allegations made in paragraphs 56 & 57.
R. R. Agarwal (one of the Income tax Officers authorised to conduct the search) in his affidavit affirmed that the letter of authorisation was issued to him by the Commissioner of Income tax, U.P. Lucknow, after the Commissioner had been satisfied on the report submitted by the deponent.
The Commissioner of Income tax, Mr. A.L. Jha, by his affidavit denied that letters of authorisation were issued under the directions of the Deputy Director of Inspection or anybody connected with Directorate.
He also stated that in respect of the case of M/s. Seth Brothers some information was brought to him by the Directorate and that information corroborated the report made to him by Mr. R.R. Agarwal and that after taking into consideration all those materials he was satisfied that a search of the premises of M/s. Seth Brothers "was called for" and that he issued the impugned letters of authorisation.
Mr. R.V. Ramaswamy, Deputy Director of Inspection (Investigation) in paragraph 6 of his affidavit denied that the raid or search of the premises of M/s. Seth Brothers was ordered by him.
The affidavit of R. Kapur, Income tax Officer, Special Investigation Circle, who was authorised by the Commissioner of Income tax to make the search is also relevant.
Mr. Kapur averred that some information was received by Mr. R.R. Agarwal from which it appeared that the firm of M/s. Seth Brothers and its partners were "evading tax by maintaining duplicate sets of accounts" and by suppressing relevant documents and papers 612 from the Department; that Mr. R.R. Agarwal made a written request to the Commissioner of Income tax for letters of authorisation in order to carry out the search of the assessee 's premises and in pursuance thereof on May 29, 1963 the Commissioner of Income tax issued three authorisation letters, two in favour of Mr. R.R. Agarwal and one in favour of the deponent authorising them to, carry out the search in accordance with the terms of the 'authorisation letters.
In this state of the record we are unable to agree with the High Court that the letters of authorisation were issued by the Commissioner of Income tax at the direction of the Director of Inspection (Investigation).
The attention of the Court was presumably not invited to the relevant paragraphs of the 'affidavits of the Officers concerned.
It is true that a large number of documents were seized from the premises of M/s. Seth Brothers but that has by itself no direct beating on the question whether the Income tax Officer acted mala fide.
If the Income tax Officer in making 'a search had reason to believe that any books of account or other documents useful for, or relevant to, any proceeding under the Act may be found, he may make a search for and seize those 'books of account 'and other, documents.
Some books, maps of the cold storage, assessment returns, and doctor 's prescriptions were seized by the Income tax Officer.
It appears, however, from the inventory that a large number of documents which related to the business of the assessees and their allied concerns were also seized.
It would be impossible merely from the circumstance that some of the documents may be shown to have no clear or direct relevance to any proceeding under the Act that the entire search and seizure was made not in bona fide discharge of official duty but for a collateral purpose.
The suggestion that the books of 'account and other documents which could be taken possession of should only be those which directly related to the business carried on in the name of M/s. Seth Brothers has, in our judgment, no substance.
The books of account and other documents in respect of other businesses carried on by the partners of the firm of the assessees would certainly be relevant because they would tend to show interrelation between the dealings 'and supply materials having a bearing on the case of evasion of income tax by the firm.
We are unable to hold that because the Income tax Officers made a search for and seized the books .of account and documents in relation to business carried on in the names of other firms and companies, the search and seizure were illegal.
It is also said that marks of identification were not placed on several documents.
Assuming that this allegation is true, in the absence of anything to show that the documents were ' either re 613 placed or tampered with, that irregularity will not bY itself supply a ground for holding that the search was mala fide.
A delay of two months in issuing a notice calling for explanation is also not a ground for holding that the action was taken for a collateral purpose.
It is not disputed that 'assistance of the, police may be obtained in the course of a search.
The High Court has, however, found that the police force employed was excessive.
But we are unable to hold that on the evidence, in keeping police officers present at the time of the search in the house of influential businessmen to ensure the protection of the officers and the record, "excessive force was used.
" We accordingly see no good grounds to accept the finding recorded by the High Court that the manner in which the search and seizure were conducted "left no room for doubt that the Income tax Officer did not apply his mind and formed no opinion regarding the relevancy or usefulness of the account books and documents for any proceedings under the Income tax Act." The High Court accepted that the correctness of the opinion actually formed by the Income tax Officer .was no.t open to scrutiny, in a writ petition, but in their view no opinion was in fact formed by the Officer and the search and seizure of documents and books of account must on that account be held as made in excess of the powers conferred upon the Income tax Officer and mala fide.
For these observations we find no warrant.
The Income tax Officers concerned have sworn by their affidavits that they did in fact form the requisite opinion under section 132 of the Act and the other evidence and the circumstances do not justify us in discarding that assertion.
These proceedings were brought before the High Court by way of a writ petition under article 226 of the Constitution before any investigation was made by the Income tax Officers pursuant to the action taken by them.
In appropriate eases a writ petition may lie challenging the validity of the action on the ground of absence of power or on a plea that proceedings were taken maliciously or for a collateral purpose.
But normally the High Court in such a ease does not proceed to determine merely on affidavits important issues of fact especially where serious allegations of improper conduct are made against public servants.
The Income tax Officers who conducted the search asserted that they acted in good faith in discharge of official duties and not for any collateral purpose.
The Commissioner of Income tax also denied that he acted at the direction of the Deputy Director of Inspection and that case was supported by the Deputy Director of Inspection.
If the ,learned Judges of the High Court were of the view that the question was one in respect of which an investigation 614 should be made in a petition for the issue of a writ, they should have directed evidence to be taken viva voce.
The High Court could not, on the assertions by the partners of the firm which were denied by the Income tax Officer, infer that the premises of M/s. Seth Brothers were searched and documents were seized for a collateral purpose, merely from the fact that many documents were seized or that on some of the documents seized marks of identification were not put or that the documents belonging to the "sister concerns" of the "Imperial Flour Mills" were seized.
In our view the decision of the High Court that the action of the Commissioner of Income tax, U.P., and the Income tax Officers who purported to act in pursuance of the letters of authorisation was mala fide, cannot be accepted as correct.
Counsel for M/s. Seth Brothers contended that opportunity may be given to the assessees to lead evidence viva voce to prove that the revenue officers acted for a collateral purpose.
We do not entertain this request since we propose to remand the case to the High Court to decide questions which have not been decided.
The applicants, if so advised, may move the High Court for leave to lead evidence.
It is for the High Court to decide whether at this stage after nearly six years leave to examine witnesses should be granted.
The order passed by the High Court is set aside and the proceeding is remanded to the High Court.
The High Court will deal with and dispose of the proceeding according to law.
We may observe that counsel for the Income tax Officer did not invite us to decide the question of the vires of section 132 of the Income tax Act on which the High Court has expressed no opinion.
M/s. Seth Brothers and the other petitioners in the High Court will pay the costs of these appeals in this Court.
There will be one hearing fee.
Costs in the High Court will be costs in the petition.
V.P.S. Appeals allowed and case remanded.

summary:
Under section 132 of the Income tax Act, 1961, the Commissioner of Income tax or the Director of Inspection may, after recording reasons, order the search of premises if he has reason to believe that one or more of the conditions in section 132(1) exist.
The officer authorised may enter any place and make a search where he has reason to believe that books or documents relevant to any proceeding under the Act may be ,found.
He may seize any books or documents and place marks of identification on them, and may remove them to the income tax office.
By the express terms of the Act and the Income tax Rules, the officer designated to make the search may obtain the assistance of the police.
The Income tax Officer issued notice to the respondent firm that its income chargeable to tax had escaped assessment and that it was proposed to reassess the income.
He also gave information to the Commissioner of Income tax that the respondent was maintaining duplicate records for evading assessment of the true income and requested the Commissioner for authorisation under section 132 to enter and search the premises where the respondent was carrying on business.
The Commissioner recorded his reasons and issued an order in the prescribed form authorising two Income tax Officers to enter the premises, to search for and seize such books and documents as may be considered relevant or useful for the purpose of reassessment, and to place identification marks thereon and to convey them to the income tax office.
The premises were accordingly searched and the account books and certain documents found therein were seized and carried to the income tax office.
Petitions were filed in the High Court for writs of certiorari for quashing the proceedings of the Income tax authorities, and consequential reliefs.
The High Court granted the writs on the grounds: (1) that the order of search was made by the Commissioner at the direction of the Directorate of Inspection and without satisfying himself about the existence of circumstances justifying search; (2) that besides the documents belonging to the respondent the Income tax Officers seized documents relating to the transactions of their allied concern which documents were irrelevant to the process of reassessment of the respondent; (3) that marks of identification were not placed on certain documents at the time they were seized; (4) that the documents seized were detained by the Income tax Officer for more than two months; and (5) that the police force employed during the raid was excessive.
In appeal to this Court, HELD: (1) The Commissioner stated in his counter affidavit that before issuing the authorisation he was satisfied that it was necessary to take action under section 132 and that the authorisation was not issued at the 602 direction of the Directorate of Inspection.
The Deputy Director of Inspection also stated in his affidavit that he never gave any direction to the Commissioner to issue authorisation for search and seizure.
Therefore, in reaching the conclusion that the Commissioner acted at the behest of the Director of Inspection, the High Court was in error, because, having held that the correctness of the opinion formed by the income tax authorities was not open to scrutiny in a writ petition the High Court acted on mere affidavits and accepted the assertions of the respondents which were specifically denied by the Revenue authorities.
[612 B C; 613 D; 614 A B] (2) Since the power conferred, though not arbitrary, is a serious invasion upon the rights and privacy of the tax payer, the power must be strictly exercised in accordance with law and only for the purposes for which the law authorises it to be exercised.
If the action of the officer issuing the authorisation or of the officer designated to make the search is challenged, they must satisfy the court about the regularity of the action taken.
If the action is maliciously taken or for a collateral purpose it is liable to be struck down.
But where the power is exercised bona fide and in furtherance of the statutory duties of the Revenue Officers any error of judgment on the part of the officers will not vitiate the exercise of the power.
The Act and the Rules do not require that the authorization should specify the particulars of documents and books of account; a general authorisation to search for and to seize documents and books of account relevant to or useful for the proceeding under the Act complies with the requirements of the Act and the Rules.
It is for the officer making the search to exercise his judgment and seize or not to seize any documents or books of account.
An error committed by the officer in seizing documents which may ultimately be found not to be useful for or relevant to the proceeding will not by itself vitiate the search, nor will it entitle the aggrieved person to an omnibus order releasing all documents seized.
[608 G H; 609 A F] In the present ease, therefore, merely because a large number of documents, some of which related to the concerns allied to the respondent firm, were seized, it could not lead to the inference that the search and seizure were for a collateral purpose.
On the contrary, the books of account and the documents in respect of other businesses carried on by the partners of the respondent firm through the allied firms would be relevant, because, they would show inter relation between the dealings and supply materials having a bearing on the case of evasion of income tax by the respondents.
Therefore, the search and seizure were not illegal or mala fide.
[609 G; 612 F ]H Income tax Officer, A ward, Agra vs Firm Madan Mohan, , approved.
(3) Assuming that marks of identification were not placed On some documents, it was a mere irregularity and, unless the documents were shown to be tampered with, would not make the search and seizure mala fide.
[612 H] (4) A delay of two months in issuing a notice calling for explanation is also not a ground for holding that the action was taken for a collateral purpose.
[613 A B] (5) Keeping police officers present at the time of search in the house of influential businessmen to ensure the protection of the officers and the record, would not be a case of excessive use of force.
[613 B C]


judgement:
Criminal Appeal No. 82 of 1967.
Appeal by special leave from the judgment and order dated March 15.
1967 of the Rajasthan High Court in Criminal Appeal No. 219 of 1965.
Sobhag Mal Jain and V.S. Dave, for the appellant.
K.B. Mehta, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
The appellant 's conviction by the learned Additional Sessions Judge, Jodhpur under section 314 read with section 109, Indian Penal Code, having been affirmed by the High Court of Rajasthan, he appeals to this Court after obtaining special leave.
The charge on the basis of which he was tried was that some 689 days prior to May 1, 1963, he abetted one Mst.
Radha at Jodhpur to cause the miscarriage of one Miss Atoshi Dass alias Amola, who as a result of administration of tablets and introduction of "laminaria dento" by the said Mst.
Radha, died on May 1, 1963.
The case for the prosecution is that in about the years 1962 63, the appellant was the 13resident of Gramotthan Pratishthan at Jalore.
Miss Atoshi Dass was a teacher working in Indra Bal Mandir, Tikhi, an institution under the management of the appellant.
She was young and unmarried.
Illicit relationship developed between the aforementioned Atoshi Dass and the appellant as a result of which Miss Atoshi Dass became pregnant.
With a view to cause abortion of the child in her womb, the appellant took Miss Dass to Jodhpur and there attempted to cause the miscarriage mentioned above through one Mst.
Radha.
The attempt was not successful.
The insertion of "laminaria dento" in the private pacts of Miss Dass caused septicaem as a result of which she died in the hospital on May 1, 1963.
The appellant 's case is that he had no illicit relation with Miss Atoshi Dass nor did he abet the alleged abortion.
He denies that Miss Atoshi Dass died as a result of any attempt at abortion.
As seen earlier the appellant was charged and tried for the offence of abetting Mst.
Radha to cause the miscarriage in question but he was ultimately convicted of the offence of abetting Miss Dass in the commission of the said offence.
It may be stated at this stage that one Mst.
Radha was tried along with the appellant in the trial court but she was acquitted on the ground that there was no evidence to show that she had anything to do with the abortion complained of.
Despite the contentions of the appellant to the contrary, we think there is satisfactory evidence to show that the death of Miss. Dass was due to septicaem resulting from the introduction of "laminaria dento" into her private parts.
On this point we have the unimpeachable evidence of Dr. A.J. Abraham.
P.W. 4.
There is also satisfactory evidence to show that the appellant was in terms of illicit intimacy with Miss Dass.
It is true that the principal witness on this point is Miss Chhayadass, P.W. 6, the sister of the deceased, a witness who has given false evidence in several respects.
But as regards the illicit relationship between the appellant and Miss Atoshi Dass, her evidence receives material corroboration from the evidence of P.W. 7, M.B. Sen and P.W. 5.
Misri Lal.
Further it also accords with the probabilities.
of the case.
It is not necessary to go into that question at length as we have come to the conclusion that the appellant is entitled to an acquittal for the reasons to be stated presently.
690 While we are of opinion that there was illicit intimacy between the appellant and the deceased, we are unable to accept the assertion of Miss Chhayadass that the appellant was her only paramour.
D. 3 conclusively proves that the deceased had illicit relationship with one Sood at Delhi.
In the committal court Miss Chhayadass admitted that the address on Exh.
D 3 is in the handwriting of the deceased.
In that court she was positive about it; but in the trial court she went back on that admission.
In many other respects also she had deviated from the evidence given by her in the committal court.
Hence we are unable to.
accept her statement in the trial court that the address found on Exh.
D 3, an inland letter is not in the handwriting of the deceased.
D 3, appears to be a self addressed letter sent by the deceased to one Sood.
The fact that the deceased had more than one paramour is not a material circumstance though it may indicate that the appellant could not have had any compelling motive to abet the abortion complained of.
The .fact that the appellant was on terms of illicit intimacy with the deceased, an unmarried girl and that she later became pregnant through him is without more, not sufficient to connect the appellant with the crime.
From the evidence of Misrilal and Sengupta, it is clear that the appellant and the deceased had gone together to Jodhpur on April 24, 1963.
But from the evidence of Sengupta, it is also clear that the deceased had some work to attend to at Jodhpur.
It is also clear from the evidence of Miss Chhayadass that the deceased and the appellant were going together to Jodhpur and other places off and on.
It may be noted that while returning from Jodhpur to his native place, the appellant left the deceased with Mr. and Mrs. Sengupta.
Hence the circumstance that the appellant and the deceased went together to Jodhpur on April 24, 1963.
cannot be held to be an incriminating circumstance.
This leaves us with the evidence relating to the actual abetment.
On this aspect of the case the only evidence brought to our notice is the evidence of Miss Chhayadass and the letter exhibit P.4.
Miss Chhayadass deposed in the trial court that when the pregnancy of the deceased became noticeable, the appellant told the deceased in the presence of that witness; that he would get the the child aborted through Mst.
Radha.
As mentioned earlier Miss Chhayadass is a highly unreliable witness.
She had admitted in the committal court that she had been tutored by the police to give evidence.
In fact she pointed out a police officer who was in the court as the person who had tutored her.
In the trial court she denied that fact.
There is no gainsaying the fact that she was completely under the thumb of the police.
She deviated from most of the important admissions made by her during her cross examination in the committal court.
Coming to the question of the abetment referred to earlier, this is what she stated during her cross examination in the committing court: 691 "My sister did not tell Madan Raj about her illness (arising from her pregnancy) in my presence.
On being enquired by me about my sister at Jalore I was informed that my sister had gone to Mst.
Radha Nayan in the hospital for treatment.
No talks about it were held before me prior to my talk at Jalore (talks between Madanraj and my sister about treatment).
" According to the admissions made by her in the committal court she came to know for the first time about her sister 's intention to cause miscarriage only after her death.
No reliance can be placed on the evidence of such a witness.
Now coming to Exh.
P.4, this is a letter said to have been written by the deceased sometime before her death intending to send the same to the appellant which in fact was not sent.
It was found in her personal belongings after her death.
There was some controversy before the courts below whether the same is admissible under section 32 (1 ) of the Evidence Act and whether it could be brought within the rule laid down by the Judicial Committee in Pakala Narayana Swami vs Emperor(1).
We have not thought it necessary to go into that question as in our opinion the contents of the said letter do not in any manner support the prosecution case that the appellant instigated the deceased to cause miscarriage.
The letter in question reads thus: "Santi Bhawan 28 4 63.
I went with your letter to.
the father.
Since I could not get money from him, I dropped you a letter.
I went to Mst.
Radha and asked her to give me medicine.
I further said that the money would be received.
She gave me a tablet and told me that injection would be given on receipt of full payment.
This tablet is causing unbearable pain and bleeding but the main trouble will not be removed without the injection.
How can I explain but the pain is untolerable.
I have left Sen 's residence.
He and particularly neighbouring doctor would have come to know everything by my condition, which is too serious.
(Meri is halat se unaki vishesker pas me Daktarji ko sub kuch pata chal jati powon tak ulati ho jati).
Firstly I intended to proceed to Jalore but on reaching the Station I could not dare to proceed.
I feel that you are experiencing uneasiness and trouble for me.
I am causing monetary as well as mental worries to you.
I have been feeling.
this for a considerable longer period.
Please do not be annoyed.
It has become very difficult for me to stay alone for the last several days.
(1) A.I.R. [1939] P.C. 47.
692 Had you accepted me as your better half you would have not left me alone in my such serious condition.
You cannot know what sort of trouble I am experiencing.
Had you been with me I would not have felt it so such.
Please do not be annoyed.
Perhaps no one has given you so much trouble.
I will write all these facts to my mother I will also write about our marriage.
28 4 63 Today is Sunday.
I cannot book a trunk call you the court.
Today I tried on the Phone number of Hazarimal but it was engaged, and latter on it cancelled.
My Pranam.
Yours Ritu.
Today I have taken injection and have come from Shanti Bhawan.
" portion of that letter indicates that the appellant was in any manner responsible for the steps taken by the deceased for causing miscarriage.
No other evidence has been relied upon either by the trial court or by the High Court in support of the finding that the appellant was guilty of the offence of abetting the deceased to cause miscarriage.
For the reasons mentioned above we are of the opinion that there is no legal basis for the conviction of the appellant.
The learned Counsel for the appellant challenged the conviction of the appellant on yet another ground.
As mentioned earlier he 'was charged and tried for the offence of abetting Mst.
Radha to cause abortion of the child in the womb of the deceased but curiously enough he was convicted for abetting the deceased to cause miscarriage.
Abetment as defined in section 107 of the I.P.C., can be by instigation, conspiracy or intentional aid.
If the abetment was that of Mst.
Radha, it could have been only by instigation or conspiracy but if it was an abetment of the deceased, it could either be by instigation or by conspiracy or by intentional aid Throughout the trial the accused was asked to defend himself against the charge on which he was tried.
At no stage he was.
notified that he would be tried for the offence of having abetted the deceased to cause miscarriage.
It is now well settled that the absence of charge or an error or omission in it is not fatal to a trial unless prejudice is caused see Willie (William) Slaney vs The State of Madhya Pradesh(1).
Therefore the essential question is whether there is any reasonable likelihood 693 of the accused having been prejudiced in view of the charge flamed against him.
From what has been stated above one can reasonably come to the conclusion that the accused was likely to have been prejudiced by the charge on the basis of which he was tried.
From the cross examination of the prosecution witnesses, it is seen that the principal attempt made on behalf of the appellant was to show that he had nothing to do with the co accused, Mst.
Radha.
He could not have been aware of the fact that he would be required to show that he did not in any manner abet the deceased to cause miscarriage.
The facts of this case come within the rule laid down by this Court in Faguna Kanta Nath vs The State of Assam(1).
The case of Gallu Sah vs The State of Bihar(2) relied by the High Court is distinguishable.
Therein Gallu Sah was a member of an unlawful assembly.
He was said to have abetted Budi to set fire to a house.
One of the members of the unlawful assembly had set fire to the house in question though it was not proved that Budi had set fire to the house.
Under those circumstances this Court held that the offence with which Gallu Sah was charged was made out.
As observed by Calcutta High Court in Umadasi Dasi vs Emperor(a) that as a general rule, a charge of abetment fails when the substantive offence is not established against the principal but there may be exceptions.
Gallu 's case was one such exception.
For the reasons mentioned above we allow the appeal and acquit the appellant.
He is on bail.
His bail bonds stand cancelled.
V.P.S. Appeal allowed.
(1) [1959] 2 Supp.

dataset_name: IN-Abs

summary:
The appellant was charged with having abetted one R in causing miscarriage to a woman who died in the. attempt.
R was acquitted but the appellant was convicted of the offence of abetting the deceased woman in the commission of the offence.
The High Court confirmed the conviction.
In appeal to this Court, HELD: The facts of the present case fell within the rule that a charge of abetment fails ordinarily when the substantive offence is not established against the principal offender.
The High Court erred in holding that the rule laid down in Gallu Sah vs The State of Bihar, [1959] S.C.R. 861, applied to the facts of the case.
That was an exceptional case; [693 B D] Faguna Kanta Nath vs State of Assam, [1959] Supp. 2 S.C.R. 1, followed.
Umadasi Dasi vs Emperor, I.L.R. approved.
Further, the appellant cross examined ' the prosecution witnesses only 10 show that he had nothing to do with his co accused R, as he was not aware of .the fact that he would be required to show that he did not in any manner abet the deceased.
Therefore, he was prejudiced by the absence of the charge of abetting the deceased woman and hence, was entitled to an acquittal.
[693 A B] Willie Slaney vs The State of M.P., [1955] 2 S.C.R. 1140, referred to.


judgement:
ivil Appeal No. 574 of 1966.
Appeal by special leave from the judgment and order dated September 22, 1964 of the Allahabad High Court in First Appeal No. 39 of 1952.
J.P. Goyal and Sobhag Mal Jain, for the appellants.
K.B.Mehta, for respondent No. 2.
C.J. Suit No. 41 of 1947 was filed in the Court of the Civil Judge, Mathura by the deity Thakur Janki Ballabhji Maharaj, acting through its manager L. Tulsiram, authorised agent of the Bharatpur State, for a decree for possession of the temple of the deity at Brindaban in U.P. and of the temple properties and for an order calling upon the defendant, Ramchand, to account for the realisations of the estate of the deity.
The case of the plaintiffs was that the Ruler of the State of Bharatpur built the temple at Brindaban and installed the idol.
of Thakur Janki Ballabhji Maharaj and dedicated the temple to the deity; that the shebait of the deity who was a paid employee of the State was appointed by the Ruler of the State of Bharatpur; that one Chhotelal was appointed a priest to perform the Worship in the temple under a written agreement dated April 8, 1936; that after the death of Chhotelal on May 13, 1912 Ramchand was appointed the priest of the temple on condition that he shall execute the usual agreement in favour of the State; that Ramchand entered upon the duties as pujari but failed to execute the agreement, and in course of time raised various constructions of his own on the premises in dispute and converted them into private residential buildings, and illegaily used the temple as a lodging house for pilgrims "to the utter detriment, loss and desecration of the deity" and thereby acquired "illegal benefit to himself out of the temple properties"; and that Ramchand was not performing the seva puja of the deity.
The suit was resisted by Ramchand.
He denied that the temple, was built at the expense of the Ruler of the State of Bharatpur or that he Ramchand was appointed to be a priest of the temple by the Ruler of Bharatpur.
He contended that one Ram Narain 636 Kedar Nath had taken a piece of land at Bindraban on rent from the temple of Govindji and after constructing a temple thereon and installing the Thakurji had given it as an offering to Sitaram, ancestor of Ramchand, and had appointed Sitaram as the Manager of the temple; that the temple had since then remained in the management of the descendants of Sitaram, and that he (Ramchand) was in possession of the temple and its properties as "Manager and proprietor".
The trial court dismissed the suit holding that the Ruler of Bharatpur was never the owner of the temple or of the articles mentioned in Sobs.
A and B of the plaint, that the Ruler was also not the founder of the temple nor its shebait; and that the Ruler had never appointed any pujari of this temple and was not authorised to appoint or dismiss such a pujari.
In appeal against the decree passed by the Court of First instance it was urged before the High Court of Allahabad that the trial court erred in dismissing the suit merely on the finding that the Ruler of the State of Bharatpur "had no concern with the construction of the temple or with the installation of the idol in the temple", and that in the suit filed by the deity, having regard to the acts of mismanagement and misappropriation committed by the defendant Ramchand, a decree should have been made in favour of the deity.
Counsel for Ramchand contended that the suit being of the nature of a suit under section 92 of the Code of Civil Procedure could not be instituted without obtaining the sanction.
in writing of the Advocate General and that in any event the second plaintiff, the State of Bharatpur, could not file the suit, since it was not a shebait or the settlor of the temple.
It was common ground before the High Court that the property of the temple was not property of a public trust of a religious or charitable nature.
From the averments made in the plaint it is clear that the suit was filed by the deity against the person in management and it was not a suit filed by the relators.
Section 92 of the Code of Civil Procedure had no application to the suit and the sanction of the Advocate General was not a condition of the initiation of the suit.
The High Court therefore rightly rejected the contention that the suit was not maintainable without the sanction of the Advocate General.
The High Court held that it was open, even to a worshipper, if he possesses sufficient qualifying interest, to start a suit to protect the property of the deity.
Observing that the defendant Ramchand had raised residential buildings of his own in the temple premises and that he was lodging pilgrims in a part of those buildings and was asserting a proprietary title to them and was on that account guilty of conduct detrimental to the interest of the deity 637 and had rendered himself liable to be ejected from the temple and its properties, and that he was unfit to act as pujari, the High Court reversed the decree passed by the trial court and decreed the plaintiffs ' suit for possession of the temple and its properties and restrained the defendant Ramchand by an injunction from interfering with the management of the temple and, performance of worship of the deity.
With special leave, Ramchand has appealed to this Court.
Ramchand has committed several acts of mismanagement and misappropriation of the temple and its properties.
He has set up a personal title to the temple properties and has converted the properties to his own use.
Ramchand is therefore not fit to remain in possession as pujari or as manager of the temple.
The suit is filed by the deity acting through the Manager.
Granting that it is not proved that the Ruler 'of Bharatpur established the temple and installed the deity, there is abundant evidence that the State of Bharatpur had made from time to time large donations for the maintenance of the temple.
The Ruler of Bharatpur had therefore clearly a substantial interest to maintain the suit on behalf of the deity to protect the property.
There is no merit in the appeal and therefore it must fail.
It is, however, necessary to make an effective decree in this appeal.
It may be noticed that even though the suit has been filed and prosecuted on behalf of the State of Bharatpur and later by the State of Rajasthan through its District Magistrate, the temple is situate within the State of U.P. and it would be difficult for the District Magistrate or any other authority acting on behalf of the State of Rajasthan to look after the administration of the temple and to protect its properties from misappropriation.
This is undoubtedly a private trust but the civil courts have jurisdiction to frame a scheme for the management of the temple which is not a public trust.
The Judicial Committee of the Privy Council in Pramatha Nath Mullick vs Pradyumna Kumar Mullick(1) directed that a scheme be framed for the regulation of the worship of the idol even though there was no public trust.
In Asha Bibi and Others vs Nabissa Sahib and Others(2) the Madras High Court held that a suit for removing the trustees of a private trust and for framing a scheme was maintainable.
A similar view was also.
taken by the Calcutta High Court in Shri Mahadeo Jew and Another vs Balkrishna Vyas & Another(3).
The civil court has therefore jurisdiction to frame a scheme for management of the temple and its properties.
The present is, in our judgment, a case in which in exercise of the powers under order 41 rule 33 of the Code of Civil Procedure we should direct (1) 52 I.A. 245.
(2) A.I.R. 1957 Mad.
(3) A.I.R.1952 Cal. 763. 638 that the court of first instance to frame a scheme of management of the temple collections and the income and disbursement of expenses, application of the surplus if any and for that purpose to appoint a manager of the property of the deity and its properties, with authority to take possession of the temple and the properties from the defendant Ramchand and, to administer the property and its income under the directions of the court.
We direct accordingly.
The Court will also take an account of his dealings with the property of the deity from Ramchand and determine his liability and recover the amount found due from him on taking accounts.
The Court will pass appropriate orders with regard to the constructions made by Ramchand and will prevent the property being used for the private benefit of Ramchand or any other person.
The scheme to be framed will be consistent with the law relating to private religious endowments, if any, in force in the State of Uttar Pradesh.
Subject to this modification, the appeal is dismissed with costs.
G.C Appeal dismissed.

summary:
The deity Thakur Janki Ballabhji Maharaj installed in a temple at Brindaban brought in the court of Civil Judge Mathura a suit through its manager an authorised agent of the erstwhile Bharatpur State for a decree for possession of the temple and its properties as well as for accounts to be rendered by R the pujari of the temple.
It was alleged in the plaint that the temple had been built by the Ruler of Bharatpur who had dedicated it to the deity.
It was further alleged that R, the defendant who had succeeded the priest originally appointed by the Ruler of Bharatpur had mismanaged and misappropriated the temple properties and had failed to perform the seva puja of the deity.
R in his written statement denied these allegations and contested the suit.
After the merger of Bharatpur State in the State of Rajasthan the suit was prosecuted by the District Magistrate of Bharatpur.
The trial court dismissed the suit but the High Court decreed it.
By special leave the defendant came to this Court.
HELD: (i) The High Court rightly rejected the defendant 's plea based on section 92 of the Code of Civil Procedure.
It was common ground before the High Court that the property of the temple was not property of a public trust of a religious or charitable nature.
From the averments in the plaint it was clear that the suit was flied by the deity against the person in management and it was not a suit filed by the relators.
Section 92 of the Code of Civil Procedure had no application to.
the suit and the sanction of the Advocate General was not a condition of the initiation of the suit.
[636 F G] (ii) The evidence established that the defendant had committed several acts of mismanagement and misappropriation of the temple and its properties He had set up.
a personal title to the temple properties and had converted the properties to his own use.
He was therefore unfit to remain the pujari of the temple.
[637 B C] Granting that it was not proved that the Ruler of Bharatpur established the temple and installed the deity, there was abundant evidence that the State of Bharatpur had made from time to.
time large donations for the maintenance of the temple.
The Ruler of Bharatpur had therefore clearly a substantial interest 'to maintain the suit on behalf of the deity to protect the property.
There was No. merit in the defendant 's appeal and it must fall.
[637 C D] (iii) Since it would be difficult for the District Magistrate of Bharatpur or any.
other authority acting on behalf of the State of Rajasthan to look after the administration of the temple which was situate in the State of 635 U.P. it was an appropriate case for the exercise of the Court 's powers under O. 41 R. 33 of the Code of .Civil Procedure.
The Civil Courts have jurisdiction to frame a scheme for the management of a temple even though it is not a public trust.
[637 H 638 B] Pramatha Nath Mullick vs Pradyumna Kumar Mullick 52 I.A. 245, Asha Bibi & Ors.
vs Nabissa Sahib & Ors.
A.I.R. 1957 Mad.
583 and Shri Mahadeo Jew & Ant.
vs Balkrishna Vyas & Ant.
A.I.R. 1952 Cal. 763, relied on.


judgement:
Civil Appeal No. 1033 of 1966.
Appeal by special leave from the judgment and order dated September 21, 1964 of the Allahabad.
High, Court in Income tax Misc.
Case No. 121 of 1956.
S.T. Desai, A.K. Verma and Y.B. Dadachanji, for the appellant.
Jagdish Swarup, Solicitor General, S.K. Aiyar, R.N. Sachthey and B.D. Sharma, for the respondent.
By order dated August 23, 1968, we called for a supplementary statement on the issue whether dividend warrants were delivered by he Glass Works to the Bank on August 3, 1949.
The Tribunal has submitted 'a statement of the case that the only relevant facts proved are that the dividend was declared on July 25, 1949 and the Bank encashed the dividend warrants on December 31, 1949.
The appeal must therefore be decided on the footing that the dividend warrants were handed over to the Bank by the Glass Works on August 3, 1949, is not proved.
The material facts which have a bearing on the point in issue are these.
The year of account of the Bank.is the calendar year.
The State of Benaras in which the Bank had its registered office merged with the Indian Union on December 1, 1949.
The Glass Works declared a dividend at a General Meeting on July 25, 1949.
Cheques for Rs. 69,000 issued by the Glass Works in favour of the Bank in payment of the dividend were encashed by the Bank on December 31, 1949.
The dividend received by the Bank has .been brought to tax in the assessment year 1950 51.
Counsel for the Bank urged that the Bank cannot be assessed to.
tax in respect of dividend accruing to it at a time when the Bank was a non resident.
It is urged that by virtue of section 14(2) (c) of the Income tax Act, 1922, as then in force, the income received by the Bank was not liable to be taxed.
At the relevant time section 14(2)(c) read as follows: "(2) The tax shall not be payable by an assessee (c) in respect of any income, profits 'or gains accruing or arising to him within an Indian State, unless such income, profits or gains are received or deemed to 'be.
received in or 'are brought into British India in the previous year by or on .behalf of the assessee, or are assessable under section 12B or section 42.
" By the Adaptation of Laws Order, 1950, the words "an Indian State" were substituted by the words "a Part B State", and the words "British India" were substituted by the words "taxable territories".
Section 2(14A) (which was also incorporated by the Adaptation of Laws Order, 1950, with effect from April 1950) insofar as it is material provides: "taxable territories ' means (a) . . . . . (b) as respects any period after the 14th day of August, 1947, and before the 26th day of January 671 1950, the territories for the time being comprised in the Provinces of India, but excluding the merged territory of Cooch Behar, Provided that the taxable territories shall be deemed to include (a) the merged territories (i) as respects any period after the 31st day of March, 1949,.
for any of the purposes of this Act, and The State of Benaras after merger on December 1, 1949 with the Dominion of India formed part of the State of Uttar Pradesh and was on that account part of the taxable territories by virtue of the definition contained in section 2(14A) of the Indian Income tax Act.
Assuming that the dividend accrued within an Indian State, it was received by the Bank in the taxable territories on December 31, 1949, and by the express words contained in section 14(2)(c) of the Indian Income tax Act, 1922, before it was omitted by the Taxation Laws (Extension to Jammu & Kashmir) Act, 1954, it was not exempt from liability to payment of tax, even if the right thereto had accrued to the Bank in an Indian State.
It was then urged that the dividend must be deemed to have been received by the Bank on July 25, 1949 the day on which it was declared and on that date the Bank being a non resident it could not be brought to tax.
But under section 16(2) of the Indian Income tax Act, 1922, the dividend income was taxable only in the year in which it was paid, credited or distributed, or was deemed to be paid, credited or distributed.
This Court observed in J. Dalmia vs Commissioner of Income tax, Delhi(1) that the expression "paid" in section 16(2) does ' not contemplate actual receipt of the dividend by the member: in general, dividend may be said to be paid within the meaning of section 16 (2) when the Company discharges its liability and makes the amount of dividend unconditionally available to the member entitled thereto.
It was also held that the Act does 'not make dividend income taxable in the year in which it becomes due: it is taxable only in the year in which it is paid, credited or distributed.
The Court overruled the decision of the Bombay High Court in Commissioner of Income tax vs Laxmidas.
s Mulraj Khatau(2) in which it Was held that when dividend is declared, liability arises on the part of the Company to make that payment to the shareholder ,and with regard to the shareholder when the income represented by that dividend accrues (1) (2) 672 or arises to him, and that the fact that the actual payment of the income is deferred is immaterial and irrelevant.
In the present case there is no evidence that before December 31, 1949, dividend was paid, credited or distributed to the Bank.
By virtue of section 4(1)(a) of the Income tax Act, 1922, the income was held properly taxable in the assessment year 1950 51.
It is unnecessary therefore to consider whether even if the Bank was a non resident on July 25, 1959, by virtue of section 4(1)(b)(ii) it was liable to be taxed in respect of the dividend income in the year of assessment 1950 51.
The appeal fails and is dismissed with costs including the costs of the hearing at which the order calling for a supplementary statement was made.
V.P.S. Appeal dismissed.

summary:
The appellant Bank (assessee) was a share holder in a company which declared a dividend on July 25, 1949.
The State of Benares in which the Bank had its registered office merged with the Indian Union on December 1, 1949.
Cheques far the amount of dividend were encashed by the assessee on December 31, 1949.
The assessee 's year of account was the calendar year. 'The. dividend was sought to be taxed in the assessment year 1950 51, but the assessee contended that: (1) the dividend income was exempt from tax under section 14(2)(c), as it stood in the year of assessment; and (2) that it must be deemed to have been received by the assessee even on July 25, 1949, on which date the assessee was a non resident.
HELD: (1) On December 1, 1949, by merger, the State of Benares became part of the taxable territories as defined in section 2(14 A) of the Act.
Hence, though the dividend might have accrued in an Indian State, it was received by the assessee in the taxable territories on December 31, 1949, and, by the express words in section 14(2)(c), as modified by the Adaptation of Laws Order, 1950, the dividend income was not exempt from tax liability.
[671 C E] (2) Dividend income is deemed to have been received by an assessee, under section 16(2), only when it is paid, credited or distributed, or, is deemed to be paid, credited or distributed.
Though paid does not contemplate 'actual receipt ' the dividend can only said to be paid, not when it is declared, but when the company discharges its liability 'and makes the amount of dividend unconditionally available to the member entitled thereto.
In the present case, there was no evidence that before December 31, 1949, the dividend income was paid, credited or distributed to the assessee within the meaning or section 16(2).
[671 E G; 672 A B] J. Dalmia vs
C.I.T. Delhi, followed.


judgement:
tion No. 111 of 1969.
Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
R.K. Garg and Anil Kumar Gupta for the petitioners.
R. Gopalakrishnan and R.N. Sachthey, for the respondent.
685 The Judgment of the court was delivered by Sikri, J.
This is a joint petition by two detenues under article 32 of the Constitution praying for the issue of a writ of habeas corpus or other appropriate writ, direction or order directing that the petitioners be released.
The petitioner, Arshad Ahmad, was detained in pursuance of Detention Order dated September 19, 1967, passed under section 3(1)(a)(i) of the Jammu & Kashmir Preventive Detention Act, 1964.
The copy of the order on the record shows that the order was served on the detenu by Jaswant Singh, Deputy Superintendent of Police (CID), Jammu on September 27, 1967.
No grounds of detention were served on the detenu, but an order dated October 25, 1967, issued by the Secretary to the Government, Home Department, was served on him informing him that it would be against the public interest to disclose the facts or the grounds of detention to him.
The learned counsel for the petitioner, Mr. Garg, contends that the order dated October 25, 1967, was served too late and the detention of the petitioner became illegal when the time for serving the grounds of detention had expired.
Section 8 of the Jammu and Kashmir Preventive Detention Act, 1964, provides that "when a person is detained in pursuance of a detention order, the authority making the order shall, as soon as may be, but not later than ten days from the date of detention, communicate to him the grounds on which the order has been made, and shall afford him the earliest opportunity of making a representation against the order to the Government.
" But the proviso to section 8 states: "Provided that nothing in this sub section shall apply to the case of any person detained with a view to preventing him from acting in any manner prejudicial to the security of the State, if the authority making the order, by the same or a subsequent order, directs that the person detained may be informed that it would be against public interest to communicate to him the grounds on which the detention order has been made.
" The learned counsel for the State contends that if an order has been made under the proviso it does not matter whether the order is made and served beyond the ten days ' time specified in We are unable to accept this contention.
There is no doubt that it is the duty of the detaining authority to communicate the 686 grounds within ten days of the date of detention if the case does not fall within the proviso.
If the detaining authority neither communicates the grounds of detention nor informs the detenu under the proviso within 10 days of the detention, the detention would become illegal and a subsequent order under the proviso would not have the effect of rendering the detention legal.
A similar point arose before this Court in Abdul Jabar Butt vs State of Jammu & Kashmir(1).
This Court was then considering the Jammu and Kashmir Preventive Detention Act (IV of Sambat 2011) and similar provisions contained therein.
Das, C.J., observed: "If the grounds are not communicated to the detenu within the period of time prescribed by the expression "as soon as may be" the detenu becomes deprived of his statutory right under sub s.(1) and his detention in such circumstances becomes illegal as being otherwise than in accordance with procedure prescribed by law.
In order to prevent this result in a certain specified cases the proviso authorises the Government to issue the requisite declaration so as to exclude entirely the operation of sub section
It, therefore, stands to reason and is consistent with the principle of harmonious construction of statutes that the power of issuing a declaration so as to prevent the unwanted result of the operation of sub section
(1) should be exercised before that very result sets in." Although there is some change in the language in the present act in substance the provisions are similar as far as the present point is concerned.
are here concerned with the liberty of a subject and we must adopt a construction which would not have the effect of enabling the executive to make an order under the proviso at any time after the lapse of ten days specified in section 8.
Even from the practical point of view we are unable to.
see that the Government would experience any difficulty in deciding within ten days whether the grounds should be served or not in the public interest.
All the material is with the Government when it passes the order of detention and a period of ten days is ample for the Government to make up its mind whether the case falls within the proviso or not.
In the result we hold that the detention of the petitioner Arshad Ahmad is illegal and he should be released.
Coming to the case of the second petitioner Fazal Hussain, he was detained by order dated January 3, 1968, passed under (1) ; , 59.
687 section 3(1) read with section 5 of the Jammu and Kashmir Preventive Detention Act, 1964.
The order of detention was served on the petitioner in the Central Jail on January 8, 1968, and the same was read out to him.
By order dated January 11, 1968, the petitioner was informed that it was against public interest to disclose facts or to communicate to him the grounds on which the detention order was passed.
The affidavit stating these facts is sworn to by the Additional Secretary to the Government, Jammu and Kashmir, Home Department, and it is stated in the verification that these facts were stated on the basis of information derived from the record of the case which he believed to be true.
The learned counsel for the petitioner contends that the Deputy Superintendent Central Jail, who is alleged to have served the order of detention on the petitioner, should have filed the affidavit.
The State has annexed to the affidavit a copy of the Government Detention Order and below the detention order the following endorsement exists: "The notice of this order has been served upon Shri Fazal Hussain s/o Ayub Khan detenu by reading over the same to him.
Sd/ Dy.
Superintendent Central Jail, Jammu 8/1" In view of this endorsement ' the order of detention we do not consider that it was necessary that the Deputy Superintendent, Central Jail, should have filed an affidavit to the effect that he had served the order of detention on the detenu Fazal Hussain.
No other point is raised.
The petition of Fazal Hussain accordingly fails and is dismissed.
R.K.P.S. Petition dismissed.

summary:
In a petition under article 32 of the Constitution the first petitioner 's detention under section 3(1)(a)(i) of the Jammu and Kashmir Preventive Detention Act, 1961 was challenged as illegal on the basis that no grounds of detention were served on him but that an order informing him that it would be against public interest to disclose the grounds to him was served on him after the expiry of 10 days prescribed in section 8; it was contended that his detention was, therefore, illegal.
In the case of the second petitioner it was claimed that the affidavit in reply to the. petition which set out the facts relating to the service of the order of detention and an order under the proviso to section 8 was sworn to by an Additional Secretary on the basis of information derived from the record of the case.
and not by the Jail Superintendent who was alleged to have served the orders on the detenu.
HELD: (1) The detention of the first petitioner was illegal and he must be released.
It is the duty of the detaining authority to communicate the grounds of detention within 10 days of the date of detention if the case does not fall within the proviso to section 8.
If the detaining authority neither communicates the grounds of detention nor informs the detenu under the proviso within 10 days of the detention, the detention would become illegal and a subsequent order under the proviso would not have the effect of rendering the detention legal.
Abdul Jabar Butt vs State of Jammu and Kashmir, ; ,59.
(2) The petition filed by the second petitioner must be dismissed.
The State had annexed to its affidavit a copy of the Government detention order on which the Jail Superintendent had endorsed the fact of its service.
In view of this it was not necessary for the Superintendent to have filed an affidavit of having effected service.