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TMI Blog1979 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the material available, form a reasonable belief that conditions necessary for directing search and seizure under s. 132(1) existed. In Writ Petitions Nos. 920 of 1975 and 113 of 1976, the legality of the order passed under s. 132(5) of the Act has been challenged an aground that the ITO passed the orders without obtaining the previous approval of the IAC. The relevant part of s. 132, as it stood at the time of the searches and seizures, was as follows: 132. Search an seizure.-(1) Where the Director of Inspection or the Commissioner, in consequence of information in his on, has reason to believe that (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (XI of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account 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 notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pliance with this sub-section ...... (8) The books of account or other documents seized under subsection (1) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained ...... .. The scope and ambit of s.132 of the Act has been explained by the Supreme Court in. ITO v. Seth Brothers [1969] 74 ITR 836 in the following words (p. 843) : " The section does not confer any arbitrary authority upon the revenue officers. The Commissioner or the Director of Inspection must have, in consequence of information, reason to believe that the statutory conditions for the exercise of the power to order search exist. He must record reasons for the belief and he must issue an authorisation in favour of a designated officer to search the premises and exercise the powers set out therein. The condition for entry into and making search of any building or place is the reason to believe that any books of account or other documents which will be useful for p or relevant to, any proceeding under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and even if the Commissioner is enjoined to issue a warrant only when in fact there is information in his possession in consequence of which he may form the necessary belief, the matter is not thereby subject to scrutiny by the court. (See ITO v. Firm Madan Mohan Damma Mal [1968] 70 ITR 293 (All). It is not necessary before effecting the search and seizure under s. 132 of the Act, that the officials of the I.T. dept. should have given to the person whose account books and documents are sought to be seized, a notice to produce whatever account books or other documents are needed and that the person should have failed to comply with such a notice. As laid down in cl. (b) of sub-s. (1) of s. 132 if the Commissioner is satisfied that the person 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 Act he is empowered to direct a search and seizure without giving to the person concerned a, notice to produce the account books or other documents needed. In the affidavit sworn by the Commissioner the information which led him to issue the warrants of authorisation has been set out as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Road, Allahabad, named, Now Naini Service Station and Dandi Service Station. I was informed that near Dandi Pump he had vast lands converted into Maqsood Ahmad Colony cleared by the town planner. The promoter of the colony is a Sikh from Delhi who has a local office in Dandi. The colony is, to have 300 shops and over 600 flats and all plots have been sold out. Maqsood Ahmad lived in 1975-77 in Bahadurganj just close to Haji Lal Mohd. Biri Works separated only by a galli and the house belongs to the Waqf. He stayed in the Upper storey and that at specified places in the house there will be found documents and cash and jewellery about 3 to 4 lakhs rupees will also be found. I was also informed that at Dandi Petrol Pump his trusted Munim, Maqbool Ahmad, will also have documents at the petrol pump. (e) I was also informed that Maqsood Ahmad's brother, Mahmood Ahmed, had joined, him in supply of biris to Hind Tobacco Company, Haji Lal Mohd. Biri Works and the two brothers have excise licenses in their names. I was informed that he, also worked as Lit Light Company, sole kerosene agent for Indian Oil at Allahabad, office at Katju Road, and depot at Leader Road and that his oil tanker i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiating action against the petitioner. On these facts, the search of the premises of the petitioner was held to be illegal. In New Kashmir and Oriental Transport Co. (P.) Ltd. v. CIT [1973] 92 ITR 334 (All), the search and seizure of the books of account was held to be illegal as no reason was recorded by the Commissioner for taking action under s. 132 against the petitioner. The search conducted in H. L. Sibal v. CIT [1975] 101 ITR 112 (P H), was held to be illegal as the satisfaction made it obvious that the record relating to the authorisation for a search of the premises of the petitioner was prepared after the search was conducted. The record did not represent the contemporaneous thinking and activities of the Commissioner. On the same reasoning the search conducted in the case of S. C. Sibal v. CIT [1977] 106 ITR 102 (P H), was held to be illegal. The rule laid down in these cases is not attracted to the facts and circumstances of the cases in hand. In Writ Petitions Nos. 920 of 1975 and 113 of 1976, the legality of the order under s. 132(5) was challenged on the ground that the impugned orders were not passed with the previous approval of the IAC. Sub-s. (5) of s. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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