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TMI Blog2013 (9) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... published documents for which the Head of the Department namely the Director General of Income Tax (Investigation), UP and Uttrakhand had validly claimed privilege under Sections 123 and 124 of the Evidence Act - We do not find that claim of privilege was not for bonafide purpose. The information of large amount of cash transactions in foreign bank may have generally raised doubts in bonafide manner on the nature of transactions - A large amount of accounted black money was floating in the market which poses a serious threat to the national economy - The Government of India had adopted several methods to discouraging the parallel economy being run by unscrupulous persons - The Financial Intelligence Unit (FIU), Ministry of Finance, Government of India was engaged in collecting such information against the money laundering, terrorist financing and related crimes - The sources and methods of the organisation collecting and processing such sensitive information cannot be subjected to public scrutiny to jeopardize the interest of the organisation and national interest. Relying upon well-established principles of claiming privilege under Sections 123 and 124 of the Evidence Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition to the petitioner; and (h) grant such other relief as is deemed fit under law and equity." 3. After exchange of affidavits the writ petition was heard by a Division Bench of this court. The conclusions drawn by the Court in the judgement dated 04.2.2011 on the points for determination are as follows:- Points for determination by the Court CONCLUSIONS The following points arise for determination at this stage: (i) Whether it is mandatory to record the reasons to believe for authorising the search; (ii) Whether the DIT(I)-Kanpur had jurisdiction to authorise the search; (iii) Whether the search was invalid as no prior approval of the Development Commissioner was taken under section 22 of the SEZ Act; (iv) Whether the Petitioner is entitled to be informed about the information/ material or reasons to believe for authorising search before the question of their relevancy is decided by the court; (v) Whether the court can examine the records to adjudge the relevancy of the information/ material or the reasons to believe for authorising search without assistance of the Petitioner; (vi) Whether the Petitioner has made out a prima facie case against the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to authorisation of search on the ground that there were other points, which were not argued and were not decided by the Court. The application was heard by the Division Bench presided by Hon'ble Mr. Justice Prakash Krishna (as he then was) and Hon'ble Mr. Justice Vipin Sinha. By an order dated 31.7.2013 the Bench dismissed the review petition. The last four paragraphs of the order dated 31.7.2013, relevant for the purpose of the case, are quoted as below:- "Viewed as above, we are of the view that no case for reviewing the judgment dated 4.2.2011 has been made out. Before parting with the case, we may note that the above review application was filed on 15th of April, 2011 and the writ petition was listed before the different Benches of this Court from time to time. The case was adjourned for one reason or the other on account of the non-availability of Sri S.K. Garg, Advocate, as is apparent from the order sheet.. At no point of time, Sri S.K. Garg, Advocate, who had argued the matter originally, invited attention of the Court to decide the review application. In the meantime, Hon'ble Mr. Justice Yatindra Singh who delivered the judgment of the Division Bench has been trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the information in possession of the department or the reasons for authorizing search except the source of information. 9. That M.D. Overseas Ltd is a leading importer and exporter of bullion, Platinum bars and other precious metals. The satisfaction note gives the details of the modus operandi adopted by the aforesaid importer and exporter in respect of which the necessary information were received from Financial Intelligence Unit (FIU), Ministry of Finance, Govt. of India, which is a Central National Agency for receiving, processing, analyzing and disseminating information relating to suspected financial transactions and it is also responsible for coordinating and strengthening the efforts of national and international agencies, investigation in pursuing the global efforts against money laundering, terrorist financing and related crimes. This agency FIU-IND is an independent body reporting to Economic Intelligence Council headed by Finance Minister, Govt. of India. The FIU-IND collects the information of cash transaction reports and suspicious transaction reports and it analyses the information received to uncover the patterns of transactions, suggesting suspicion of money l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undering, terrorist financing etc. cannot be disclosed to the petitioner or his counsel and the petitioner-company is engaged in the sham transactions of purchase and sale of precious metals with cash which generates heavy unaccounted income. Photostat copy of the functions, collection of information and analysis of information and sharing of information by FIU-IND is enclosed herewith as Annexure SA-1. 12. That it is only due to search carried out at the different premises of the petitioner on 15.9.2009 that, incriminating documents have been recovered and on the basis of these incriminating documents substantial additions are likely to be made by the Assessing Officer during the assessment proceedings. 13. That, moreover, the Department has least objection in showing the Satisfaction Note to the Hon'ble Court, rather it has already been produced before the Hon'ble Court, rather it has already been produced before the Hon'ble Court in a sealed envelope and can be produced again before the Hon'ble Court if so desired." 11. Shri Bharat Ji Agarwal, appearing for the Income Tax department, has relied upon judgments of Supreme Court in State of Punjab vs. Sodhi Sukhdeo Singh AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the source and method of collecting the information but they have a right to examine the satisfaction note to assail the validity and bonafides of the search and seizure operations. He submits that the company has been preparing accounts regularly and has been subjected to income tax assessments. The Income Tax department, with an object to unearth undisclosed income or the income which may have escaped assessment, cannot resort to a harsh and punitive action like search and seizure on the basis of information, which is not relevant. Shri Ashish Bansal submits that the disclosure of satisfaction note will demonstrate that the entire action was malafide and that the petitioner was not the target of either collecting the information or the result arising therefrom. 13. We have considered the arguments and find that the grounds, on which the privilege has been claimed under Sections 123 and 124 of the Evidence Act, are relevant for the purpose and object of claiming privilege. It is in public interest not to disclose the satisfaction note to the petitioner. The privilege may not only be claimed for the information collected, gathered or processed but may also be claimed for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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