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Issues involved: Quashing of search and seizure proceedings under s. 132(1) of the Income-tax Act, 1961, legality of proceedings under s. 132(5) read with r. 112A of the I.T. Rules, 1962, and return of seized property.
Summary: The petitioner, mother of two individuals, sought to quash search and seizure proceedings conducted at her residence under s. 132(1) of the Income-tax Act, 1961. The search revealed hidden jewellery claimed by the petitioner as exclusively hers. Subsequently, search warrants were issued against her, leading to the seizure of assets. The petitioner challenged the legality of these actions, arguing lack of information and belated seizure. Regarding the first contention, the Court found that the Commissioner had valid grounds to issue search warrants based on information gathered directly from the petitioner. The Court held that the Commissioner's satisfaction under s. 132(1)(b) and (c) was justified, allowing for the search and seizure of assets. Addressing the second contention, the Court noted that all jewellery had been discovered before the warrants against the petitioner were issued. However, it ruled that the Commissioner was within rights to authorize seizure of assets claimed by the petitioner, emphasizing the effectiveness of s. 132(1) in such cases. The Court rejected the argument that assets could not be seized in the petitioner's hands post the initial search, stating that the provision allows for valid searches based on authorized warrants. It was established that the search party acted honestly, presenting gathered information to the Commissioner for issuing warrants against the petitioner. The Court emphasized that the search of the premises was lawful, leading to the discovery of jewellery and unaccounted income. It highlighted the necessity for valid search warrants and justified the seizing of discovered items in the petitioner's possession post the issuance of warrants against her. In conclusion, the Court found no merit in the petition and dismissed it with costs, affirming the legality of the search and seizure proceedings conducted under the Income-tax Act, 1961.
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