What the courts have decided on section 131(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Pramod Swarup Agarwal v PDIT (Inv)
High CourtHelps taxpayerUnder appeal
The authorised officer who searched us has now summoned us under s.131(1A). Can he?
No, not after the search is over. The officer who issued the notice was the authorised officer for the s.132 search, and s.131(1A) lets the authorised officer use that power only before he takes action under clauses (i) to (v) of s.132(1). The action having already been taken, the notice was quashed; and the department could not save it by pointing to the same person's substantive designation as Deputy Director.
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Pawan Kumar Goel v Union of India
High CourtHelps taxpayer
The officers came in on a survey, I cooperated and showed them everything, and then they turned it into a search and took away the cash. Can they do that?
No, not on this record. The Punjab and Haryana High Court quashed the action. Section 133A(4) forbids an income-tax authority acting under that section from removing any cash, stock or valuable article from the premises, and it is only where the person refuses or evades cooperation that section 133A(6) lets the authority fall back on the powers in section 131(1). Here the assessee had voluntarily disclosed and handed over Rs 2,09,89,090, the department produced no material to show non-cooperation, and no satisfaction was ever recorded for converting the survey into a search. The summons under section 131 was also vague, specifying nothing that was required of him. The action was quashed with consequential benefits.
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P. Murali Mohana Rao v Addl. CIT, Range-1, Hyderabad
ITATHelps taxpayerNo later treatment found
The Additional Commissioner has levied Rs 30,000 on me personally, as the chartered accountant representing my client, for not attending on three dates in answer to section 131 summons. Does he even have the power to pass that order?
On this reasoning, no. Because section 272A(1) imposes Rs 10,000 for each default, the penalty in law was Rs 10,000 per default and not Rs 30,000 in aggregate; and on the thresholds in section 274(2) a penalty of that amount is for the Income-tax Officer to impose, so the Tribunal held the Addl. CIT had no jurisdiction to pass the order. It also held there was reasonable cause under section 273B, that one show-cause notice cannot support penalties for three separate defaults, and that the completion of the client's assessment under section 143(3) rather than section 144 showed the subsequent compliance was good compliance.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
