Section 132A — Powers to Requisition Books of Account, etc.

Section 132A of the Income-tax Act, 1961 grants the authorities the power to requisition books of account or other documents. This section is invoked when the authorities have reason to believe that such documents are necessary for any proceedings under the Act and that they are not produced despite a notice or are likely to be tampered with. The significance of this section lies in its ability to aid in the collection of evidence during investigations into tax evasion. The statutory test involves the satisfaction of the authorized officer that the requisition is necessary. The burden of proof lies with the tax authorities to justify the need for requisition. In practice, this section is crucial for ensuring compliance and preventing concealment of income.

Common Litigation Flashpoints

1. Validity of the reasons to believe for requisition
2. Scope of documents that can be requisitioned
3. Procedural lapses in the requisition process
4. Challenge to the jurisdiction of the authority issuing requisition

Judgments on Section 132A — Powers to Requisition Books of Account, etc.

• DCIT, CC-1(2), Kolkata vs M/s Chaman Metallics Ltd — ITAT,
  Once the assessee has submitted documents relating to identity, genuineness of the transaction, and credit-worthiness, the AO must conduct an inquiry before invoking Section 68.
• DCIT (Central Circle-1) vs Shree Ganesh Edibles Pvt. Ltd. — ITAT,
  Once the assessee furnishes identity, creditworthiness, and genuineness of the lender, the onus shifts to the AO to prove otherwise.
• Principal Commissioner of Income Tax, Central-3 vs Abhisar Buildwell P. Ltd. — SC,
  In the absence of incriminating material, the AO cannot assess or reassess completed/unabated assessments under Section 153A.
• Union of India & Anr. vs M/s. Ganpati Dealcom Pvt. Ltd. — SC,
  The 2016 Amendment Act cannot be applied retrospectively as it creates new offences and substantive changes, which cannot be applied to past transactions.
• Commissioner of Income Tax (Central)-III vs Kabul Chawla — HC,
  Additions to income under Section 153A can only be made based on incriminating material found during the search.
• ACIT vs M/s Majestic Properties (P) Ltd. — ITAT,
  Mere jottings on loose papers without corroborative evidence cannot form the basis for assessing undisclosed income.
• PR. COMMISSIONER OF INCOME TAX CENTRAL-2 NEW DELHI vs MEETA GUTGUTIA PROP. M/S FERNS 'N' PETALS — HC,
  Completed assessments can be interfered with by the AO under Section 153A only on the basis of some incriminating material unearthed during the course of search.
• C.I.T., Kolkata vs SMIFS Securities Ltd. — SC,
  Goodwill is an asset under Explanation 3(b) to Section 32(1) of the Income Tax Act, 1961.