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TMI Blog2014 (11) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that no reason was ascribed for search and seizure and action taken u/s 132 of the Act was illegal - The relevant confidential file, if required and necessary could have been called for and examined - Revenue in the counter affidavit was not required to elucidate and reproduce the information and details that formed the foundation. The terms used are ‘reason to believe’. - Whether the competent authority had formed the opinion on the basis of any acceptable material or not, as is clear as crystal, the High Court has not even remotely tried to see the reasons – reasons can be recorded on the file and the Court can scrutinize the file and find out whether the authority has appropriately recorded the reasons for forming of an opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th at the residential as well as the business premises. During the search of the residential premises, son of the sole proprietor was informed by the Income Tax Officer that the search operations were also being conducted at the factory premises. Despite such information he was not allowed to leave the house. Assailing the search and the seizure, the 1st respondent preferred a writ petition before the High Court and contended therein that there was no information in possession of the officer which could have persuaded any reasonable person to form an opinion about the existence of undisclosed assets of the writ-petitioner. It is further urged that the warrant of authorization was issued mechanically, arbitrarily and there was total non- app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At this stage it is relevant to refer to Para 40 of the writ petition, which is quoted below: 40. That in the facts and circumstances the Petitioner bonafidely believes that there was no information in possession of the officer issuing the warrant of authorization for search which could lead any reasonable person to form an opinion about existence of undisclosed assets with the Petitioner. The warrant of authorization, even if assumed that there was any, was issued mechanically arbitrarily and without application of mind and without forming the opinion about existence of undisclosed assets, as contemplated by Sub-Section (1) of Section 132. The reply of the said paragraph has been given by the Respondents in Para 33 of the coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate how the denial in the counter affidavit filed by the revenue could be treated as an admission by implication to come to a conclusion that no reason was ascribed for search and seizure and, therefore, action taken under Section 132 of the Act was illegal. The relevant confidential file, if required and necessary could have been called for and examined. Revenue in the counter affidavit was not required to elucidate and reproduce the information and details that formed the foundation. 6. In this context, we may profitably refer to the decision in Pooran Mal V. The Director of Inspection (Investigation), New Delhi and others (1974) 1 SCC 345, wherein the Constitution Bench, while upholding the constitutional validity of Section 132 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (c) exists. In this connection it may be further pointed out that under sub-rule (2) of Rule 112, the Director of Inspection or the Commissioner, as the case may be, has to record his reasons before the authorisation is issued to the officers mentioned in subsection (1). Thirdly, the authorisation for the search cannot be in favour of any officer below the rank of an Income Tax Officer. Fourthly, the authorisation is for specific purposes enumerated in (i) to (v) in subsection (1) all of which are strictly limited to the object of the search. Fifthly when money, bullion, etc. is seized the Income Tax Officer is to make a summary enquiry with a view to determine how much of what is seized will be retained by him to cover the estimated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrict Registrar and Collector, Hyderabad and Another V. Canara Bank and Others (2005) 1 SCC 496, while referring to Section 132 of the Act, it has been ruled that: There are safeguards. Section 132 uses the words in consequence of information in his possession, has reason to believe . (emphasis supplied) Section 132(1-A) uses the words in consequence of information in his possession, has reason to suspect . Section 132(13) says that the provisions of the Code of Criminal Procedure, relating to searches and seizure shall apply, so far as may be, to searches and seizures under Sections 132(1) and 132(1-A). There are also Rules made under Section 132(14). Likewise Section 132-A(1) uses the words in consequence of information in his p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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