1992 (3) TMI 8 - HC - Income Tax

Summary

Issues Involved:
1. Legality and Jurisdiction of Warrant of Authorisation.
2. Search and Seizure Operation.
3. Availability of Alternative Remedy.
4. Application of Mind by Authorities.
5. Procedural Safeguards under Rule 112 of Income-tax Rules, 1962.

Summary:

1. Legality and Jurisdiction of Warrant of Authorisation:
The petitioner, Messrs. Jai Bhagwan Om Parkash, challenged the warrant of authorisation issued u/s 132 of the Income-tax Act, 1961, and Rule 112(1) of the Income-tax Rules, 1962, arguing it was illegal and without jurisdiction as it was against Messrs. Om Parkash Som Parkash, a Hindu undivided family-assessee, not the petitioner-firm. The court found that the business premises searched were run by Messrs. Om Parkash Som Parkash in respect of the business styled as Messrs. Jai Bhagwan Om Parkash, thus validating the warrant of authorisation.

2. Search and Seizure Operation:
The search and seizure operation resulted in the recovery of 4 kgs. of gold ornaments, 119 kgs. of silver ornaments, and Rs. 1,25,000 in cash. The petitioner claimed that the items seized were mentioned in their regular account books. The court noted discrepancies between the stock found and the stock recorded in the books, supporting the legitimacy of the search operation.

3. Availability of Alternative Remedy:
The respondents argued that the petition should be dismissed due to the availability of alternative remedies u/s 132(10) and 132(11) of the Income-tax Act for the return of books or documents and against orders made u/s 132(5). The court acknowledged the availability of alternative remedies but proceeded to address the merits of the case.

4. Application of Mind by Authorities:
The petitioner contended that there was no information or application of mind by the authorities before issuing the warrant. The court reviewed the detailed notes and inquiries made by the authorities, concluding that there was sufficient information and application of mind, thus satisfying the conditions precedent u/s 132.

5. Procedural Safeguards under Rule 112 of Income-tax Rules, 1962:
The court examined the compliance with procedural safeguards under Rule 112, including the presence of witnesses during the search and the preparation of a list of seized items. It was found that the procedure was meticulously followed, and no procedural violations were identified.

Conclusion:
The court dismissed the petition, finding the warrant of authorisation and subsequent search and seizure operation to be legal and within jurisdiction, supported by sufficient information and proper application of mind by the authorities. The procedural safeguards under Rule 112 were duly followed, and the petitioner's claims were not substantiated.