The Income-Tax department routinely imposes cost on assesses for late filing of returns or delayed tax payment. For a change, it was at the receiving end when the high court imposed a cost of Rs 25,000 for retaining books of accounts impounded from a city builder for almost five years.
Justice D V Shylendra Kumar, while disposing of the petition filed by Shubha & Prabha Builders Private Ltd, observed that the I-T department couldn’t flout its own rules and regulations.Online GST Certification Course by TaxGuru & MSME- Click here to Join
“The department cannot hold back the books of accounts for such a long period without any tenable explanation or authority of law. They should immediately return those books and pay the cost to the petitioner,” the court observed.
Kiran Kumar, counsel for the petitioner, told the court: “The department impounded those books for verification on October 7, 2005. They extended the retention period from time to time, saying the company could file an appeal. On March 16, 2009, the department issued a fresh order seeking to retain those books till 2010.
“Under Section 131(3) of the IT Act, the department at best can retain impounded books only for 15 days. Thereafter, with due permission from the commissioner, that period can be extended by a few days. Only one extension is available under the law.”