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TMI Blog1997 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... partly income or property which has not been, or would not be, disclosed for the purposes of the Act, to enter any building or place where he has reason to suspect that such money, bullion, jewellery or other valuable article or thing are kept and to seize any such money, bullion, jewellery or other valuable article or thing found as a result of such search. As a prerequisite for exercise of power of search and seizure under section 132 of the Act, the authorised officer shall have information in his possession and in consequence of such information, shall have reason to believe that the 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 purposes of the Act. The powers of the income-tax authorities of search and seizure under section 132 of the Act have been a matter of examination by various High Courts in the country and by the Supreme Court time and again. Learned advocate, Mr. J. P. Shah has relied upon the judgments in the matters of N. K. Textile Mills v. CIT [1966] 62 ITR 58 (Punj) ; Commr. of Commercial Taxes v. Ramkishan Shrikishan Jhaver [1967] 66 ITR 664 (SC) ; H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The formation of opinion should be based on active application of mind and be bona fide and not be accentuated by mala fide, bias or based on extraneous or irrelevant material. The belief must be bona fide and cogently supported. The courts have further held that the existence or otherwise of the condition precedent is open to judicial scrutiny. (g) The court would examine whether the authorised person had material before it on which he could form the opinion whether there is rational connection between the information possessed and the opinion formed. However, the court would not sit in appeal over the opinion formed by the authorized person if the authorized person had information in his possession and the opinion formed is on the basis of such material. The court would not examine whether the material possessed was sufficient to form an opinion. (h) The court cannot go into the question of aptness or sufficiency of the grounds upon which the subjective satisfaction is based. (i) If the belief is bona fide and is cogently supported, the court will not interfere with or sit in appeal over it. We shall now examine the facts of the present case. On November 7, 1995, these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the gold which belonged to one Noorbhai of Dubai and the gold was handed over to one Mohammad Rafiq NOV Konkani who was an employee of New Robinson Tours and Travels, Bombay. The gold was found from room No. 206 which was rented by six persons including Mohammed Rafiq Konkani. It was confirmed by the said six persons that the gold was sent by Noorbhai from Dubai and that the same was to be handed over to one Ahmed Bashir. The said six persons were residents of India and, therefore, he thought it fit to inform the income-tax authorities about the gold. He, therefore, informed the Deputy Director of Income-tax, Shri Meena, at about 4.00 o'clock in the morning on November 8, 1995. After the arrival of Shri Meena and his staff at the hotel, Police Inspector, Shri Bawa, apprised them of the situation and gave a report in writing. Mr. R. P. Meena, Asstt. Director, has filed an affidavit and has stated that upon receiving the information from Shri K.C. Bawa, Police Inspector, he visited the hotel and waited till around 1.30 a.m. in the morning and contacted Shri Bawa who was there interrogating persons occupying room No. 206. After Shri Bawa drew up the report, he handed over copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The gold belonged to one Noorbhai of Dubai. The name of the persons given by respondents Nos. 5 and 6 to whom they were supposed to hand over the gold was found to be incorrect. The gold was seized from Mohammad Rafiq Konkani and Bashir Ahmed Patel and not from the writ petitioners. The learned advocate Mr. Shah, has contended that the gold was brought into the country in a lawful manner and proper customs duty as assessed by the customs authority was paid for the same. He vehemently argued that the Government of India, in its Ministry of Finance, has permitted the import of gold by an Indian from a foreign country who has stayed abroad continuously for a period of six months and who pays customs duty in foreign exchange. The maximum quantity of gold that can be brought under the said scheme is 5 kgs. He has relied upon the communication dated March 2, 1994 (annexure "E" to the petition), and has submitted that the gold as aforesaid can also be brought as a carrier. It is hardly relevant whether the gold belonged to the passenger or not. According to him, the action of the income-tax authorities is contrary to the abovereferred to gold import scheme. Once the gold has been br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enough to rouse the suspicion of the respondent authorities. If the gold were not seized, it would have been sold in the open market in India and the income thereof would not be disclosed for the purposes of the Act. Thus, in the submission of Mr. Thakore, there was material before the authorities and the same was scrutinised and after active application of mind, an opinion was formed by respondent No. 3 and on the basis of such opinion, a warrant was issued under section 132 of the Act. He has submitted that the sufficiency of the material on which the opinion is formed is not a subject in which the court should interfere. Suffice if the authorities had the material on which an opinion could be formed and that the opinion is formed on the basis of the said material and no other extraneous or irrelevant material. He has also relied upon the statements recorded during the course of search and the material subsequently gathered by the authorities. He also tried to justify the action of the respondent authorities indicating that respondents Nos. 5 and 6 have repeatedly changed their stand, their names and addresses given by them at various stages of investigation are changed from time ..... 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