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TMI Blog2008 (6) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... the satisfaction note did not indicate any information in the possession of the authorized officer for initiating the proceedings, thus the warrant of authorization is liable to set aside. Further held that once the proceedings initiated by issuance of warrants of authorization were found to be bad in law, there would be no occasion to continue with the proceedings of the block assessment. Even if the order of transfer were to be upheld, it would not be operative. - 4148/97 - - - Dated:- 26-6-2008 - MEHTA D. A. and ANTANI H. B. JJ. K.H Kaji for the petitioner. Manish R. Bhatt for the respondents. Judgment: D. A. Mehta J .- Mr. K. H. Kaji, learned advocate for the petitioner seeks permission of the court to amend the prayer clause by making appropriate corrections and deletions. Permission as sought for is granted. The petition is taken up for hearing after the necessary amendments have been carried out. 2. This petition has been preferred by one Suvidha Association, a non-trading corporation, duly registered under the Bombay Non-Trading Corporation Act, 1959 with the following prayers: "16. The petitioner prays: (A) that this hon'ble court be pleased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The search proceedings concluded on February 20, 1997. It is the grievance of the petitioner that the entire exercise, right from the beginning of issuing warrant of authorisation, subsequent search proceedings, issuance of notice under section 158BC of the Act, transfer of proceedings from Bhavnagar to Rajkot under section 127 of the Act, is mala fide and/or bad in law as being without jurisdiction. 4. Learned senior standing counsel, Shri M. R. Bhatt appearing for the respondent authorities submitted that the warrants of authorisation had rightly been issued in compliance with the requirements of section 132 of the Act; that the authorities had also taken care to comply with the procedural safeguards by recording the requisite reasons before issuing the warrants of authorisation, and hence the petition is required to be rejected. 5. The court requested learned counsel for the respondent authorities to place for perusal the reasons which weighed with the authorities for issuance of the warrants of authorisation. On going through the said document, the following facts emerge: Initially, Assistant Director of Income-tax (Investigation), Bhavnagar mooted a proposal in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... high level. Since this N.T.C. started the business of construction I am including the name of Shri Dayabhai Narshibhai Patel for issuance of warrants of authorisation under section 132 of the Income-tax Act. The name of concern is included for survey action under section 133A of the Income-tax Act. In view of the above facts and facts narrated on page Nos. 1 to 3 of this note, it is considered that if a notice under section 142(1) or summon under section 131 is issued to the above parties. I have reason to believe that they will fail to produce or cause to produce books of account and documents disclosing the true state of affairs of their business. It also appears that these persons are in possession of valuables, assets like jewellery, money, bullion etc. which represents income which is not disclosed or is not likely to be disclosed for the purpose of the Income-tax Act. It is therefore proposed that residential premises of persons mentioned in annexure A may be covered under section 132 of the Income-tax Act and survey under section 133A as per annexure B. Put up before Addl. DIT (Inv.), Rajkot, for perusal and necessary action." 10. Annexure A which refers to proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) any person is in possession of any money, bullion, jewellery or other valuable article or thing which represents either wholly or partly income or property which has not been or would not be disclosed for the purpose of the Act, then the authorised officer may issue a warrant of authorisation. However, before that, the authority is required to record reasons to believe that any of the aforesaid three conditions, viz., "a", "b" or "c" exists and such belief is entertained in consequence of information in possession of the authority. 15. In the present case, admittedly, so far as the petitioner corporation is concerned, existence of condition No. "c" regarding possession of money, bullion, jewellery or other valuable article or thing etc. cannot come into play-the petitioner being a non-trading corporation. The only contingencies therefore would be a representative of the petitioner corporation not responding to a summons or a notice or not likely to respond to a summons or a notice. 16. When one considers the contents of the satisfaction note referred to herein above, it becomes apparent that it is not possible to state, even prima facie, that the representative of the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities to form a belief to initiate any proceedings against the petitioner-corporation. 19. The warrants of authorisation which were originally issued on December 20, 1995 against persons other than the petitioner were cancelled on February 13,1996. The law does not permit revival of warrants of authorisation which are cancelled once. In fact, there could be no occasion for such revival considering the fact that the basis for issuance of warrant of authorisation is that the authority has reason to believe, in consequence of information in the possession of the authority, that there is violation of one or there might be violation of any one of the conditions stipulated by clauses (a), (b) and (c) of sub-section (1) of section 132 of the Act. A satisfaction which is recorded in December 1995 cannot be efficacious and operative in January 1997-after one year. The satisfaction and the resultant action under section 132 of the Act have to be imminent and proximate, and based on information in possession at the point of time when the reason to believe is formed and recorded. Therefore, the attempt to link the satisfaction of December 1995 with the satisfaction of February 1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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