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TMI Blog2024 (5) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... um on which, the exercise of the power u/s 132 would revolve. The Hon ble Apex Court in Laljibhai Mandalia [ 2022 (7) TMI 639 - SUPREME COURT ] has specifically held that such reasons may have to be placed before the High Court in the event of a challenge to formation of the belief of the Competent Authority in which event the Court would be entitled to examine the reasons for formation of the belief, though not the sufficiency or adequacy thereof. We are not satisfied with the satisfaction of the requirement of Section 132 (1) of the said Act. It is also necessary to note that no notice has been issued to the Petitioners soliciting any information from them, in this regard, at any point of time earlier to the action under Section 132 (1) of the said Act, though it may not be necessary, in case the file would demonstrate the information and material enough to indicate a reason to believe. In absence of the same, we are, therefore, unable to sustain the action of the Respondents taken under Section 132 (1) of the said Act. The same is, therefore, hereby quashed and set aside. Referring to original file of the Department having perused the same in extenso, we are of the considered op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Avaneesh Logistics Private Limited, in all of which, the Petitioner No. 1 is the Purchaser of the immovable property, jointly with the aforesaid person. According to him, these transactions have been already disclosed to the Income Tax Department in the returns filed by the Petitioner No. 1, for the relevant Assessment Years, and therefore, there is no other material, according to him, which would entitle the Respondents to conduct a search and seizure in terms of the language & requirement of Section 132 of the said Act. He, therefore, submits that the aforesaid action is vitiated on that count and cannot be sustained. (4) Mr. Parchure, learned Counsel for the Respondents, while supporting the action of the Respondents in conducting the search and seizure, invites our attention to the averments made in Paragraph No. 7 of his submissions dated 22/03/2024 (Page 392) contending that the Locker No. 105 held by the Petitioner at AXIS Bank, Branch at Nagpur had disclosed that it contained jewellery and valuables with gross weight of 6650.67 grams and silver items with gross weight of 15831.455 grams which were cumulatively valued at Rs. 3,91,00,297/-, out of which, only valuables a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act." (6) In Spacewood Furnishers (supra), the Hon'ble Apex Court had laid down the principles which govern the provisions of Section 132 of the said Act as under:- "8. The principles that can be deduced from the aforesaid decisions of this Court which continue to hold the field without any departure may be summarized as follows : 8.1 The authority must have information in its possession on the basis of which a reasonable belief can be founded that- (a) the person concerned has omitted or failed to produce books of account or other documents for production of which summons or notice had been issued OR such person will not produce such books of account or other documents even if summons or notice is issued to him. OR (b) such person is in possession of any money, bullion, jewellery or other valuable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article which represents either wholly or partly income or property which has not been or would not be disclosed; v) Such reasons may have to be placed before the High Court in the event of a challenge to formation of the belief of the competent authority in which event the Court would be entitled to examine the reasons for the formation of the belief, though not the sufficiency or adequacy thereof. In other words, the Court will examine whether the reasons recorded are actuated by mala fides or on a mere pretence and that no extraneous or irrelevant material has been considered; vi) Such reasons forming part of the satisfaction note are to satisfy the judicial consciousness of the Court and any part of such satisfaction note is not to be made part of the order; vii) The question as to whether such reasons are adequate or not is not a matter for the Court to review in a writ petition. The sufficiency of the grounds which induced the competent authority to act is not a justiciable issue; viii) The relevance of the reasons for the formation of the belief is to be tested by the judicial restraint as in administrative action as the Court does not sit as a Court of appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve as contemplated under Section 132 (1) of the said Act has to be prior to such seizure. (11) For the sake of maintaining secrecy, we are not discussing the reasons recorded in the file, however, suffice it to note that, we are not satisfied with the satisfaction of the requirement of Section 132 (1) of the said Act. It is also necessary to note that no notice has been issued to the Petitioners soliciting any information from them, in this regard, at any point of time earlier to the action under Section 132 (1) of the said Act, though it may not be necessary, in case the file would demonstrate the information and material enough to indicate a reason to believe. In absence of the same, we are, therefore, unable to sustain the action of the Respondents taken under Section 132 (1) of the said Act. The same is, therefore, hereby quashed and set aside. As a result of which, all consequent actions cannot be sustained and are accordingly quashed and set aside. (12) The Petition is allowed in the above terms. No costs. (13) Needles to mention that the Respondents shall be free to take any action against the Petitioners in case it is so permissible in law, by use of the material which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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