MR CHANDRASHEKAR BHAT V. DIRECTOR GENERAL OF INCOME TAX (INV)

WP/14073/2023

AI Insights

Mr. Chandrashekar Bhat filed a writ petition under Articles 226 and 227 of the Constitution of India against various officials of the Income Tax department, seeking the return of original documents seized during a raid on 04.05.2013. The documents were not returned within the statutory period as per Section 132(8) of the Income Tax Act, leading to the petition. The Income Tax department returned the documents following an emergent notice from the court. The court criticized the prolonged retention of the documents and the lack of justification for such delay, emphasizing the need for accountability and adherence to legal provisions by government officials.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 752393 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 30-08-2023
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India, Section 132(8) of the Income Tax Act, Section 17(1)(d) of the Limitation Act, 1963
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP
• Assessee Lawyers: AJAY N
• Keywords: Income Tax raid; Limitation Period; Original documents; Seizure of documents; Writ of Mandamus
• Section: 226; 227; 17(1)(d); 132(8)

Judgement Text

" - 1 - NC: 2023:KHC:31092 WP No. 14073 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF AUGUST, 2023 BEFORE THE HON'BLE MR JUSTICE KRISHNA S DIXIT WRIT PETITION NO. 14073 OF 2023 (T-IT) BETWEEN: MR CHANDRASHEKAR BHAT, AGED ABOUT 56 YEARS, S/O LATE. S GOVIND BHAT, RESIDING AT NO.70, 5TH B CROSS, NARAYANAPPA LAYOUT, R.T. NAGAR, BANGALORE - 560 032. …PETITIONER (BY SRI. AJAY KUMAR N.,ADVOCATE) AND: 1. DIRECTOR GENERAL OF INCOME TAX (INV) UNITY BUILDING, 5TH FLOOR, MISSION ROAD, BANGALORE - 560 027. 2. PRINCIPAL COMMISSIONER OF INCOME TAX UNITY BUILDING, 5TH FLOOR, MISSION ROAD, BANGLORE - 560 027. 3. THE ADDITIONAL COMMISSIONER OF INCOME TAX CENTRAL RANGE,-1, UNITY BUILDING, 5TH FLOOR, MISSION ROAD, BANGALORE - 560 027. 4. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1 (1), 3RD FLOOR, CENTRAL REVENUES BUILDING, QUEENS'S ROAD, BANGALORE - 560 001. …RESPONDENTS (BY SRI.DILIP M.,ADVOCATE) Digitally signed by SHARADA VANI B Location: HIGH COURT OF KARNATAKA - 2 - NC: 2023:KHC:31092 WP No. 14073 of 2023 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENTS TO HANDOVER THE ORIGINAL DOCUMENTS SEIZED DURING THE TIME OF RAID CONDUCTED ON 04/05/2013 VIDE DIN NO. ITBA/REC/M/154/2022- 23/1043125179(1) WHICH IS AT ANNX-A DATE 23.09.2021 WITHIN THE STIPULATED TIME AS SPECIFIED BY THIS HONBLE COURT. THIS PETITION COMING ON FOR PRELIMIANRY HEARING IN B GROUP THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Petitioner assessee has approached this court with the following prayer: “To issue a Writ of mandamus directing the Respondents to handover the Original Documents seized during the time of raid conducted on 04/05/2013 vide DIN No. ITBA/ REC/M/154/2022-23/1043125179 (1) which is at Annexure-A date 23.09.2021 within the stipulated time as specified by this Hon’ble Court.” 2. After service of notice, the Director General of Income Tax and others have entered appearance through their Sr. Panel Counsel, now submit that all the original documents that were seized on 04.05.2023 have been now returned to the petitioner and therefore nothing survives for consideration. - 3 - NC: 2023:KHC:31092 WP No. 14073 of 2023 3. Having heard the learned counsel for the parties and having perused the petition papers, the original prayer of the petitioner has become infructuous inasmuch as the eight documents enlisted in the memo filed by the petitioner on 30.08.2023 have been handed back to him. There is no dispute from the petitioner that what has been handed back are the original documents. Counsel for the Revenue also vouches the same. 4. Petitioner’s memo dated 27.08.2023 reads as under: “The undersigned Counsel for the Petitioner herewith reports the Release of the seized documents on 11.08.2023 which was seized by the Respondents during the raid conducted on 04.05.2013. The Copy of the Mazhar is herewith produced as ANNEXURE-A. The undersigned Counsel further submits that during the raid conducted on 04.05.2013 at the residence of the Petitioner, some of the Original Documents relating to the Sale of various properties were seized by the Respondent and the same was not tendered by the Respondents even after 30 days as contemplated under Section 132(8) of the Income Tax Act. Further, due to the unjustified withholding of the Original Documents, which is - 4 - NC: 2023:KHC:31092 WP No. 14073 of 2023 specified under annexure-B, viz Sale Deeds, Sale Agreements and Cheques could not be specifically enforced by the executants and the cheques which were given for withdrawal to the Petitioner could not be presented for payment, therefore, the person/s were prevented from sufficient cause to enure the benefit of those Deeds and Agreements and the factum of execution of the same is also affirmed by his Highness Sri Kanta Datta Narasimha Raja Wadiyar in the Sworn Statement tendered before the Income Tax Authorities. Hence, the Petitioner most respectfully prays before this Hon’ble Court to exclude the computation of limitation in the legal recourse taken by the person/s in enforcing/registering the Sale Agreements and Sale Deed which is mentioned in Annexure-B being the subject matter of seizure by the Respondents in the interest of justice and equity. The Original Documents seized by the respondents are herewith annexed in ANNEXURE-B Series.” 5. Learned counsel for the petitioner contends that the subject documents having been abruptly seized way back on 4.5.2013 by the Income Tax department during the course of raid, they continued to be in their custody for all these years i.e., till 11.8.2023, disregarding the request for the return or for the furnishment of copies thereof. He also brings to the notice of court that there were bank cheques and many if not all of them, have - 5 - NC: 2023:KHC:31092 WP No. 14073 of 2023 become invalid by the efflux of time; similarly, a few of the documents which comprised bilateral transactions affecting immovable property, that required discharge of certain obligations in a time bound way, may run the risk of non- justiciability because of arguable delay, latches or bar of limitation. He also mentions about some Regular First Appeal being allowed against his client or persons claiming under him for want of those documents. The counsel grieves that his client is put to a manifest injustice, a great hardship and a huge loss because of the unauthorized retention of original documents for a decade & more, in the guise of investigation. Therefore, he prays that court should make an appropriate observation for saving the limitation period or for repelling the possible contention of delay & latches, should petitioner bring legal proceedings founded on these documents. Learned Panel Counsel appearing for the Revenue contends that the seizure & retention of the subject documents having been done in due discharge of official duties, statutorily ordained, the officials have the protection of good faith doctrine. This - 6 - NC: 2023:KHC:31092 WP No. 14073 of 2023 court is not very sure of availability of this defense in the fitness of things. 6. The subject documents came to be returned to the petitioner by the Income Tax department immediately after issuance of Emergent Notice by this court and without waiting for any direction in the matter. This is appreciable. It hardly needs to be stated that the pendency of a litigation per se does not come in the way of answering respondents granting relief/reprieve to the dominant litis, of course in accordance with law. However, no explanation is offered for the long delay brooked in returning the documents. This court deprecates the culpable action of the Revenue in retaining the original documents of a citizen for more than a decade sans any justification. Original documents could have been returned retaining authentic copies thereof with the stipulation that whenever instructed, the petitioner should produce the same; in the alternative, copies could have been furnished retaining the original documents in the cupboard, in all - 7 - NC: 2023:KHC:31092 WP No. 14073 of 2023 fairness. Neither of these things has happened. The plea that still the inquiry/investigation is pending and therefore, the originals were not returned to the petitioner, is too feeble a justification, to say the least. There is absolutely no explanation for not furnishing the copies of the original documents. No affidavit or objection is filed by the Revenue explaining as to how return of the original documents or furnishing of their copies would have prejudiced the pending inquiry/investigation. The officials of the Revenue have acted as law unto themselves, to say the least. This militates against the rules of reason & justice, that should animate the acts of officials in a Welfare State. That being said, it is for the petitioner to initiate appropriate proceedings against the erring officials for the redressal of his grievance i.e. for damages, compensation or the like from them personally. 7. The above being said, section 17(1)(d) of the Limitation Act, 1963 postpones the starting point of limitation period for suits and applications where any - 8 - NC: 2023:KHC:31092 WP No. 14073 of 2023 document necessary to establish the right of plaintiff has been fraudulently concealed by the defendant/opponent. This provision embodies the fundamental principle of justice & equity that no party should be prejudiced for failing to institute legal proceedings in time when the facts or material necessary for him to do so have been willfully concealed from him. It hardly needs to be stated that, to the transactions comprised in the seized documents, the government or the Income Tax officials are not a party. Nor can it be said that the erring officials of the Income Tax department, howsoever grave the error may be, have acted in fraud & duplicity in seizing the documents or retaining the same too far beyond a reasonable period. Therefore, the said provision stricto sensu may not be invocable. However, that is not the end of matter: where court commits the error, a litigant is not put to prejudice vide actus curiae neminem gravabit. Similarly, the arguable sovereign act of the State namely the seizure & retention of original documents by the Income Tax department also should not prejudice the citizen, in the - 9 - NC: 2023:KHC:31092 WP No. 14073 of 2023 sense that whatever justiciable rights that are foundable on these documents, should not be rendered time barred or unenforceable due to lapse of time. Therefore, the period during which the subject original documents continued to be in the custody of Income Tax department, shall be liable to be discounted while computing the period of limitation for the institution of suit or other legal proceedings even against others. An argument to the contrary cannot be sustained without exposing the petitioner or anyone claiming under him to enormous prejudice or loss, which a constitutionally ordained Welfare State needs to shun. In the above circumstances and with the above observations, this Writ Petition is disposed off, costs having been very reluctantly made easy, on the passionate submission of Panel Counsel appearing for the Revenue. Nothing observed herein above shall come in the way of petitioner taking up appropriate proceedings against the - 10 - NC: 2023:KHC:31092 WP No. 14073 of 2023 erring officials of Income Tax department, for the redressal of his grievance, and all contentions in that regard, are kept open. Sd/- JUDGE Snb/ List No.: 1 Sl No.: 54 "