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TMI Blog2010 (12) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... epared and valuables and loose papers were also inventorised. The search was suspended on 17.02.2005 at about 9 p.m. by service of prohibitory order under section 132(3) of the Income Tax Act, 1961 (hereinafter referred to as `the Act, 1961') and the same was concluded on the next date i.e. on 18.02.2005, afternoon. A survey under section 133A of the Act, 1961 was also conducted in the office premises of the firm M/s. Deshpande Malu Co. wherein the petitioner was a partner. The said survey and search was unauthorized and without there being any material so asto form reasons to believe that the petitioner was in possession of any money, bullion, jewellery or other valuable articles or thing, as required under the provisions of section 132(1) of the Act, 1961. 3. Shri Neelabh Dubey, learned counsel appearing for the petitioner would question the legality and validity of the search on the ground that the respondent No. 3, DGIT (Inv.) did not have information in his possession as to form reason to believe that the petitioner was in possession of money, bullion, jewellery or other valuable article or thing representing undisclosed income or property. Thus, the impugned warrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. On the other hand, Shri Rajeev Shrivastava, learned counsel, on the basis of returned filed on behalf of the respondent-Department would submit that the search was initiated on the ground that the DGIT(Inv) had sufficient information in possession of, inter alia, to form reason to believe that the petitioner was in possession of other valuable articles or things which would not be disclosed for the purpose of income tax and would facilitate evasion of tax. The contention of the petitioner that the tax- payers who are professionals of excellence should not be searched without there being compelling evidences and confirmations of substantial tax evasion, is admittedly a part of the instruction No. 7/2003 issued by the CBDT. But the same does not supplant the provisions of law. In the case on hand, sufficient materials were available indicating that the petitioner was in possession of the materials which warranted search and seizure under section 132 of the Act, 1961. There were compelling evidences and confirmation of substantial tax evasion to abet the tax evasion by Bajrang Group of Raipur. On search, it was found that the petitioner was also involved in evasion of substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 142 of this Act, was issued to produce, or cause to be produced, any books of accounts or other documents, has omitted or failed to produce or cause to be produced, such books of account, or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purpose of Indian Income Tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then- (A) the Director General or Director or the Chief Commissioner or Commissioner, as the case may be, may authorize any Additional Director or Additional Commissioner or J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea of jurisdiction of any Chief Commissioner or Commissioner, but such Chief Commissioner or Commissioner has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in section 120 it shall be competent for him to exercise the powers under this sub section in all cases where he has reason to believe that any delay in getting the authorization from the Chief Commissioner or Commissioner having jurisdiction over such person may be prejudicial to the interest of the revenue: Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristic or due to its being of a dangerous nature, the authorized officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorized officer and such action of the authorized officer shall be deemed to be seizure of such valuable article or thing under clause (iii): Provided a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny as it is the final conclusion arrived at by the officer concerned, as a result of mental exercise made by him on the information received. But, the reason due to which the decision is reached can always be examined. When it is said that reason to believe is not open to scrutiny what is meant is that the satisfaction arrived at by the officer concerned is immune from challenge but where the satisfaction is not based on any material or it cannot withstand the test of reason, which is an integral part of it, then it falls through and the Court is empowered to strike it down. Belief may be subjective but reason is objective. In ITO vs. Lakhamani Mewal Das 1976CTR (SC) 220 : (1976) 103 ITR 437 (SC) : TC51R.598, the Supreme Court, while interpreting similar expression used in s. 147 of the Act, held: The expression `reason to believe' does not mean a purely subjective satisfaction on the part of the ITO. The reason must be held in good faith. It cannot be merely a pretence. 15. In S.K.Industries (P) Ltd. v. Director General of Income Tax (Inv.), the High Court of Delhi took the similar view, as aforestated. 16. The Supreme Court, in Income Tax Officer, Spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons mentioned in clauses (a), (b) or (c). 19. There is a common thread running through the cases cited above, it is well settled that the Court has to examine the availability of materials and forming of reasons and not beyond that. If on examination, it is found that there was no material to form reason to believe, the High Court under Article 226 of the Constitution of India, may quash the same. If there are reasons to believe in normal circumstances, sufficiency of reason to believe may not be examined. 20. So far as the contention of learned counsel for the petitioner that the petitioner is a professional of excellence, and the tax payers who are professional of excellence cannot be searched without there being compelling evidences and confirmations of substantial tax evasion is concerned, the same is noticed to be rejected. In the case on hand, I have examined the records produced before the DGIT (Inv.). Sufficient materials were available to establish that there was compelling evidences and confirmations of abetment of tax evasion. 21. In the written submission, the petitioner has raised a new issue that the original papers have been produced before th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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