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TMI Blog2024 (8) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority for initiation of the search proceedings are justified or not? HELD THAT:- As on of the search by the competent authority in a sealed cover to this Court. Learned Additional Solicitor General has also provided copies of other seized materials and documents during the course of hearing to demonstrate that what is recorded in the satisfaction note prior to the search was actually found to be true during the course of search. We are, therefore, of the opinion that on perusal of the satisfaction recorded by the respondent authority for initiation of the search, it does not require any interference by this Court and this Court is satisfied for the satisfaction recorded by the respondent authority for initiation of the search against the petitioner and therefore, challenge by the petitioner to the search initiated under Section 132 of the Act would fail. Therefore, without going into the further details with regard to the submissions made by both the sides on pre-search action of the respondent authorities, we are of the opinion that the petition would fail so far as challenge to the search operation qua petitioner is concerned. Whether the respondents are entitled to use the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generation of black money in the economy and every assessee would take recourse to such precedence and therefore, the respondent authorities are not agreeable to such suggestion, as in the facts of the case of S.R. Batliboi [ 2009 (8) TMI 1293 - SUPREME COURT ] the documents and the papers were found during the course of search at the place of search of a third person and not at the place of search of a Chartered Accountant, whereas in the facts of the case, petitioner who is though a practicing advocate, but has been searched by valid initiation by invoking provision of Section 132 of the Act and this Court having been satisfied with regard to the initiation of the search in case of the petitioner, the discretion is vested in the respondent authorities who are the highest authority of the Income Tax Department to conduct the search for taking or not taking action upon the incriminating documents and if such discretion is exercised judiciously, we hope that no further litigation would arise in the case of third parties whose documents were found during the course of the search. However, it will be open for such third parties to raise all the contentions available under the law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e residential premises as well as the office premises of the Petitioner. (d) Direct the respondents to not use/rely upon any material collected in physical or digital format consequent to the search action u/s 132 of the Income Tax Act in any other proceeding in relation to the Petitioner or any other assessee. (e) Direct the respondents to return the cash seized consequent to the search action u/s. 132 of the Income Tax Act carried out at the residential premises as well as the office premises of the Petitioner. (f) Declare that there was no satisfaction and reason to believe under the act to carried out search action u/s. 132 of the Income Tax act. (g) Pending the admission, hearing and final disposal of this petition, direct the Respondents not to deal with the evidences collected in any manner whatsoever and to stay further proceedings under the act consequent to the search action u/s. 132 of the Income Tax Act carried out at the residential premises as well as the office premises of the Petitioner. 3. Brief facts of the case are as under: 3.1 The petitioner is an individual and by profession he is a practicing advocate since 2003 as per the certificate issued by the Bar Counci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company him to open the office premises of the petitioner as one key of the office premises of the petitioner was with Ms. Hima Patel. 3.7 It is also the case of the petitioner that when the said officer brought Ms. Hima Patel to the office of the petitioner, one more team led by respondent No.3 was awaiting at the office. The petitioner has also referred to and relied upon on the CCTV footage of the apartment of Ms. Hima Patel which are available on Google Drive. 3.8 According to the petitioner, Ms. Hima Patel was compelled to open the office of the petitioner, which was done by her calling her brother at 07.00 a.m. on 03rd November, 2023 with office keys. 3.9 It is also the case of the petitioner that Panchnama of the office premises of the petitioner shows that Ms. Hima Patel was already present at the office premises though she was brought to the office by the officer who went to serve the summons. 3.10 The petitioner has also contended that CCTV cameras working in the office of the petitioner were turned-off and officers of the search party took copy of data from loose paper files and copied data from the digital devices available in 13 computers and main servers in the office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht by learned senior standing counsel Ms. Maithili Mehta to appear for them on the ground that they were discharging their official duty and therefore, she may be permitted to appear instead of represent them as an advocate of the respondent Income Tax Department. 5.2 The matter was thereafter heard on 18th December, 2023, 20th December, 2023 and 29th January, 2024. 6. Learned senior advocate Mr. Mukul Rohtagi with learned senior advocate Mr. Saurabh Soparkar submitted that the entire search action at both the premises i.e. residence and office of the petitioner is contrary to the provisions of Section 132 of the Act,1961 and therefore, the same is required to be quashed being without any jurisdiction. 6.1 In support of such contention, it was submitted that the petitioner is a lawyer by profession and there is no case against him and search was conducted only with a sole motive to get the original copies of Memorandum of Understanding for the sale of land between one Mr. Vivek Patel and one Mr. Trilok Patel which was drafted by the petitioner and his assistants in his office. 6.2 It was submitted that none of the ingredients of Section 132(1)(a), (b) and (c) of the Act,1961 are co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been drafted/documented by the petitioner in his professional capacity and therefore, the same would be covered under the sanctity of doctrine of attorney-client privilege as well as under Section 126 of the Evidence Act, 1872 (for short the Evidence Act ). 6.6 It was therefore submitted that the respondents have no right to analyse the data of third party which do not belong to the petitioner, for which no authority, permission or warrant was sanctioned and as such the question of identifying or analysing such data as incriminating in nature or not would not arise. 6.7 Reliance was placed on Section 126 of the Evidence Act to submit that as per the said provision, an advocate owe a duty towards his clients that when a confidential information was parted to any advocate by his client hoping and trusting to retain it confidential and that when a situation arise that such confidential information is at stake, then in such scenario, an advocate is not permitted to disclose such permission without the consent of his client. It was submitted that the case of the petitioner would fall in Illustration (a) to Section 126 of the Evidence Act as the petitioner is never a party to draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of fundamental right under Articles 19(1)(f), 19(1)(g) and 21 of the Constitution of India depriving of his right, dignity and privacy. 6.12 Learned senior advocates for the petitioner submitted that the entire search proceedings and consequent action on part of the respondents are, therefore, required to be quashed and set aside as conditions of Section 132 of the Act are not fulfilled and there is no reason to believe that search is warranted as no satisfaction is recorded under the provision of Section 132 of the Act as per the requirement and the entire search operation took place only on the basis of apprehension, presumption and suspicion and therefore, such search operation is initiated without any jurisdiction. 6.13 It was also pointed out by learned senior advocate that after the search proceedings were over, the respondents have not provided the copies of statements recorded nor the access to the digital data copied from the office and residential premises of the petitioner were provided so as to enable the petitioner to contend that respondents can only use the materials which incriminates the petitioner under the provisions of the Income Tax Act as any other materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developed in latter cases by spelling it out from the right to freedom of speech and expression in Art 19(1)(a) and the right to 'life' in Art. 21. 36. Two latter cases decided by the Supreme Court of India where the foundations for the right were laid, concerned the intrusion into the home by the police under State regulations, by way of 'domiciliary visits'. Such visits could be conducted any time, night or day, to keep a tag on persons for finding out suspicious criminal activity, if any, on their part. The validity of these regulations came under challenge. In the first one, Kharak Singh v. State of UP, 1964(1) SCR 332, the UP Regulations regarding domiciliary visits were in question and the majority referred to Munn v. Illinois (1876) 94 US 113 and held that though our Constitution did not refer to the right to privacy expressly, still it can be traced from the right to 'life' in Art. 21. According to the majority, Clause 236 of the relevant Regulations in UP, was bad in law; it offended Art. 21 inasmuch as there was no law permitting interference by such visits. The majority did not go into the question whether these visits violated the 'right to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;a reasonable basis for intrusion'. The right to privacy, in any event, (see para 28) would necessarily have to go through a process of case-by-case development. 46. It cannot be denied that there is an element of confidentiality between a Bank and its customers in relation to the latter's banking transactions. Can the State have unrestricted access to inspect and seize or make roving inquiries into all Bank records, without any reliable information before it prior to such inspection? Further, can the Collector authorize 'any person' whatsoever to make the inspection, and permit him to take notes or extracts? These questions arise even in relation to the sec. 73 and have to be decided in the context of privacy rights of customers. 53. Once we have accepted in Govind (supra) and in latter cases that the right to privacy deals with 'persons and not places', the documents or copies of documents of the customer which are in Bank, must continue to remain confidential vis-a-vis the person, even if they are no longer at the customer's house and have been voluntarily sent to a Bank. If that be the correct view of the law, we cannot accept the line of Miller i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a regulatory scheme, the target s reasonable expectation of privacy may be reduced: Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), 1990 CanLII 135 (SCC), [1990] 1 S.C.R. 425, at p. 507; R. v. Fitzpatrick, 1995 CanLII 44 (SCC), [1995] 4 S.C.R. 154, at para. 49. However, I do not accept the Attorney General s contention that this scheme may be properly characterized as an administrative law regulatory compliance regime : A.F., at para. 111. Its purposes, as stated in the Act and indeed as described by the Attorney General in his submissions, are to detect and deter the criminal offences of money laundering and terrorist financing and to facilitate the investigation and prosecution of these serious offences: s. 3(a). The regime imposes penal sanctions on lawyers for non- compliance. It therefore has a predominantly criminal law character and its regulatory aspects serve criminal law purposes. [38] I also accept that, as Arbour J. noted in Lavallee, the need for the full protection of the privilege is activated in the context of a criminal investigation: para. 23. However, the reasonable expectation of privacy in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Nine Judges Bench of the Supreme Court of Canada in case of Her Majesty the Queen v. Lavallee, Rackel Heintz, Barristers and Solicitors, and Andrew Brent Polo reported in 2002 SCC Online Can SC 61. 34. The proper approach to the constitutional issues here is under s. 8 of the Charter, and there is no need to undertake an independent s. 7 analysis. This was properly explained in Fink by Goudge J.A., at para. 15: While a seizure undertaken by the state in the course of a criminal investigation can be said to implicate s. 7 and while solicitor-client privilege is encompassed within the principles of fundamental justice, I think s. 8 provides a sufficient framework for analysis. If the procedure mandated by s. 488.1 results in a reasonable search and seizure of the documents in the possession of a lawyer, it surely accords with the principles of fundamental justice and vice versa. 35. If the procedure set out in s. 488.1 results in an unreasonable search and seizure contrary to s. 8 of the Charter, it follows that s. 488.1 cannot be said to comply with the principles of fundamental justice embodied in s. 7. See also Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486. In R. v. Edw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... political traditions . Where the interest at stake is solicitor-client privilege a principle of fundamental justice and civil right of supreme importance in Canadian law the usual balancing exercise referred to above is not particularly helpful. This is so because the privilege favours not only the privacy interests of a potential accused, but also the interests of a fair, just and efficient law enforcement process. In other words, the privilege, properly understood, is a positive feature of law enforcement, not an impediment to it. This was emphasized by this Court in McClure, supra, where Major J., writing for the Court, stated, at paras. 32 and 34-35: That solicitor-client privilege is of fundamental importance was repeated in Jones, supra, per Cory J., at para. 45: The solicitor-client privilege has long been regarded as fundamentally important to our judicial system. Well over a century ago in Anderson v. Bank of British Columbia (1876), 2 Ch. D. 644 (C.A.), at p. 649, the importance of the rule was recognized: The object and meaning of the rule is this: that as, by reason of the complexity and difficulty of our law, litigation can only be properly conducted by professional m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rment has long been the standard by which this Court has measured the reasonableness of state encroachments on solicitor-client privilege. Recently, in Brown, supra, in defining the scope of the innocence at stake exception to solicitor-client privilege, this Court insisted that the judge order the production of only those communications that are necessary to allow an accused, whose innocence is otherwise at stake, to raise a reasonable doubt as to his guilt (para. 77). In Jones, supra, this Court held at para. 77 that even where public safety is at stake, there must be a clear and imminent risk of serious bodily harm or death to an identifiable person or group before solicitor- client privilege can be compromised. Moreover, where it is determined that these criteria are met, the majority in Jones held that [t]he disclosure of the privileged communication should generally be limited as much as possible (para. 86). Major J., dissenting on another point, agreed at para. 28 that solicitor-client privilege is a fundamental common law right of Canadians . Anytime such a fundamental right is eroded the principle of minimal impairment must be observed . As I noted earlier in these reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho have benefited by evading tax through the services offered by the Writ Petitioner, that were available in the Writ Petitioner s office/residence? II. Assuming that question (A) is answered on the affirmative, does the Income-tax department have the Right to seize documents of other third-parties who have not benefited by evading tax through the services offered by the Writ Petitioner, that were available in the Writ Petitioner s office/residence? PRE- SEARCH 6. Before we dwell into the above legal questions, it is important to make note of why the Writ Petitioner who is a practicing Advocate, is a target person as per section 132 of the Income Tax Act, 1961. Role of the Writ Petitioner in the Present scheme of Evasion 7. The Writ Petitioner specializes in providing services/advise in land dealings. Gujarat s land pricing framework is peculiar in terms of the difference between the jantri rate and the market rate. The huge differences between the price at which the sale deed gets executed and the total consideration actually paid, paves ways for the running of a parallel black economy. 8. Here comes the significance of drafting documents containing details of actual value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch person is in possession of any document, which would be useful or relevant for the purpose of proceedings under the Income Tax Act, which if requisitioned by the authority, would not be produced by such person. In the case of the Petitioner, the Respondent No 3, had reasons to believe that the Petitioner was in the possession of documents reflecting unaccounted and clandestine land dealings, entered into between parties to circumvent the rule of law. A detailed narration in this regard is available in the satisfaction note, which stands submitted in a sealed cover and seen by this Hon ble Court during the course of hearings in the matter. This goes to show that Section 132(1)(b), which is one of the circumstances under which a search can be conducted, stands duly fulfilled in the case of the Petitioner. C. Further, the Respondent No. 3 also had reasons to believe to proceed under Section 132(1)(c). There was sufficient material and information gathered as discussed in the Satisfaction Note, which goes to show that the Petitioner was in possession of money/cash, which has not been disclosed for the purpose of the Income Tax Act, and represents undisclosed income of the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch at a place for gathering evidence with respect to the third parties, especially when clear reasons have been recorded to that effect that documents containing huge unaccounted transactions pertaining to third party will be found at his place. F. The Satisfaction Note shown to the Hon ble Court in the sealed cover would indicate that the satisfaction for the reasons to believe in the case of the petitioner himself is separately and clearly recorded in the Satisfaction Note. The satisfaction clearly draws out that the petitioner has an expertise in providing advice in land related matters. As per the material available on record and also recorded in the Satisfaction note, he not only aids in drafting of land documents having details of unaccounted transactions, but also facilitates the storage/safe keeping of many such documents which interalia includes one such deal between Mr. Vivek Patel and Trikam Patel, wherein two separate MOUs pertaining to the same land and same time indicating two separate transaction values were being secreted at the office of the petitioner. G. The facts recorded in the satisfaction note, as stated above have been squarely corroborated with the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. 148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within [ a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee ] , a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. Also, prior to enforcement of section 148A since 01.04.2021, the department was entitled to seize and use the material pertaining to third parties (not searched) in assessment proceedings as per the provisions of section 132(1)(b) (c) r.w.s. 153C of the Act w.e.f 01/06/2003. The same was also applicable before 01/06/2003 through the provisions of section 132(1)(b) (c) r.w.s. 132(7). The above provisions of the Act unambiguously put the intent of the legislature that there is no embargo/restriction whatsoever on seizure of any documents or books of accounts, which pertains to, or any information contained therein, relate to any person other than the person searched. 3. Petitioner s Averment: The Search was conducted to get hold of the original copy of a memorandum of Understanding for a sale of land between one Mr. Vivek Patel and one Mr. Trikam Patel which was merely drafted by the Petitioner s office. No action u/s 132 of the Act can be undertaken upon the petitioner to retrieve the said document. Counter Arguments: A. As recorded in the Satisfaction Note, there was a discreet information available with the department that the petitioner assists his clients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. A detailed narration in this regard is available in the satisfaction note, which stands submitted in a sealed cover and seen by this Hon ble Court during earlier hearings in the matter. B. As discussed in the preceding paras, the documents that were believed to be secreted and stored in a clandestine manner by the petitioner in a sealed cover, are neither registered with any authority nor are available in the state government records. Considering such nature of the documents it cannot be expected by any logical mind that they will be provided in response to summons of the department. C. The petitioner specializes in providing advise for land related matters including the method of drafting documents containing details of huge unaccounted transactions, so the said document even if found by the department would not clearly and easily specify the cash/unaccounted portion of the transactions. Also, it was believed that such clandestine/incriminating documents were stored in a clandestine manner so that they are not easily accessible even to the parties of the transactions. In the backdrop of these facts and also on the basis of years of experience of the department, as has been gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one premises of the petitioner. Conclusion: 12. All the ingredients of Section 132 of the Income Tax Act, 1961, have been satisfied in all its form and content. The material available on record and the resultant satisfaction note clearly spells out the reasons to believe with respect to the petitioner himself, the builder group that was searched and also with respect to other third parties. Consequent to the search action, evidences on all the three limbs of the satisfaction note having huge implications on the Income Tax Act have been found and seized. The seizure and consideration of such material is clearly supported by the provisions of the Income Tax Act, 1961, as discussed supra. So, the search action carried out in the case of petitioner u/s 132 of the Act is valid as has also been expressed by the Hon ble court during the court proceedings. 13. Nowhere in all these years of jurisprudence has any judicial forum even remotely interpreted Section 131(1A), Section 132(2)(b), Section 132(2)(c) and Section 148, to limit an exercise of search and seizure only to the extent of the parties that the Department is aware of, and return anything and everything related to any other part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , showing that any crime or fraud has been committed since the commencement of his employment. It is immaterial whether the attention of such barrister, pleader, attorney or vakil was or was not directed to such fact by or on behalf of his client. Explanation The obligation stated in this section continues after the employment has ceased. Illustrations (a) A, a client, says to B, an attorney I have committed forgery, and I wish you to defend me. As the defence of a man known to be guilty is not a criminal purpose, this communication is protected from disclosure. (b) A, a client, says to B, an attorney I wish to obtain possession of property by the use of a forged deed on which I request you to sue. This communication, being made in furtherance of a criminal purpose, is not protected from disclosure. (c) A, being charged with embezzlement, retains B, an attorney, to defend him. In the course of the proceedings, B observes that an entry has been made in A s account book, charging A with the sum said to have been embezzled, which entry was not in the book at the commencement of his employment. This being a fact observed by B in the course of his employment, showing that a fraud has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not pass the test of primary purpose . D. Apart from drafting/advising of illegal documents, his office is also used as a safe place to store such documents in a clandestine manner. Hence, undoubtedly, the petitioner is directly involved in helping his clients to evade tax under the Income Tax Act. Such documents gets squarely covered under the proviso of section 126 of the Indian Evidence Act i.e aiding his clients for furtherance of illegal purpose. Therefore, the claim of the petitioner for protection of third party documents u/s 126 of the Indian Evidence Act is unsustainable. If such blanket immunity is provided to the premises of the petitioner, then in places like Gujarat where there is a huge involvement of unaccounted money in property transactions, all the businessman would prefer to keep all their documents at a place of lawyer or would start cohabitating their offices with the office of the lawyer and such places would turn into tax havens. Thus, it is prayed that the immunity sought by the petitioner merely because he happens to be a lawyer, is ill founded and liable to be rejected. Separation of Incriminating and non-incriminating digital data E. Much has been debat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties involved. Reliance on section 126 is without any underlying justification G. Though the petitioner is again and again relying on section 126 of the Indian Evidence Act, he has neither in his affidavit nor during the course of hearing, has provided any list of documents which he contests to be covered by client-attorney privilege. Further, other than making a general claim of being an advocate, the petitioner has not provided any evidence as to how each of such document is covered by such privilege. The blanket claim that all the third-party documents are covered by such privilege, is clearly beyond the provisions of law. Section 126 is the Right of the Client And Not The Advocate H. Not even a single client whose documents have been seized has approached court or has become a party to the writ petition to challenge such seizure on the grounds of attorney- client privilege. The privilege enshrined in the section 126 of the Indian Evidence Act is of the client per se and not of the attorney in the first place. The client will have multiple opportunities to contest the seizure when being summoned/ questioned by the income tax authorities. Also, the adjudicating authorities on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not by an Advocate, especially when the said Advocate is himself the target assessee of the search action u/s 132 of the I T Act. 2. Petitioner s averment: The counsel of the petitioner has relied upon the judgement in the case of Department of Income Tax (Investigation) and Another v. S.R. Batliboi and Company and Others, (2009) 17 SCC 767. Counter Arguments: A. The Hon ble Court relying Section on 126 of the Evidence Act, 1872, and on Batliboi (Supra), insisted to appoint an independent authority to deliberate on what is incriminating and what is non-incriminating, as neither party would be able to come to consensus on the same. B. However, the present case cannot be seen in the light of Batliboi (Supra) as the facts of petitioner s case can be clearly distinguished from the facts that led to the case in Batliboi (Supra). The brief facts of the Batliboi case are that when the Income-Tax Department was conducting a search action on the assessee, the EMAAR-MGF Group, one auditor from S.R. Batliboi and Co. firm, who was not at all the target assessee for the department and accidently happened to be at the premises of the target assessee and two laptops belonging to this auditor f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e name of the Petitioner himself for his office premises and residential premises. The digital data was cloned from the devices which directly belonged to the petitioner which contained petitioner s data including that of third parties in which he has aided and abetted tax evasion. Thus, there is no question of separating the data pertaining to the target assessee as ruled by the Hon ble Supreme Court in the case of S. R. Batliboi and Co. D. Secondly, any document connected to the target assessee which would be required by the assessing officer for making a proper assessment on the target assessee group, was directed to be handed over as per the judgement in the case of S. R. Batliboi and Co. In the facts of the present case, since the digital devices were seized from the office of the petitioner, all the files therein would be connected to the target assessee (petitioner), and would be required by the assessing officer for making a proper income assessment of the petitioner. E. Thirdly, even in Batliboi (Supra), the Assessing officer was given the liberty to choose what he/she deemed as relevant to the case of target assessee. In case S.R. Batliboi Co., disagreed, it had the liber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , without any reliable information before it prior to such inspection? Further, can the Collector authorize any person whatsoever to make the inspection, and permit him to take notes or extracts? These questions arise even in relation to Section 73 and have to be decided in the context of privacy rights of the customers. B. One serious point raised by the Hon ble Supreme court in the aforementioned para is to make roving enquiry, without any reliable information before the dept prior to such inspection . It is respectfully submitted that in the case of petitioner no roving or fishing inquiry was made. The dictionary meaning of the phrase roving enquiry is to ask questions which are not at all connected with the subject matter . In the case of petitioner, there was sufficient material and information on the record and on the basis of which reasons to believe in the case of petitioner himself was separately and clearly recorded in the Satisfaction Note. There was sufficient material and information available on record which suggested that the petitioner assists his clients, in an illegal manner, in carrying out land transactions involving huge amounts of unaccounted cash and thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectfully reiterated that this search was not conducted on a guess work, but is one of the biggest searches in recent history based on sufficient information that formed a strong reason to believe , which are all recorded in the satisfaction note. Applying this judgement would be to read into Section 132, that Lawyers in India cannot be searched, completely in converse to the legislative intent. For Canada (supra) to be applied, there ought to have either been a law that states that lawyers cannot be searched, or a law that states that lawyers can be searched. Neither is present in the Income-Tax Act, 1961. B. It is submitted further that, on the contrary, as per Criminal Procedure Code, Section 91, summons can be made for production of documents by the court/police and only the records mentioned in section 123 and 124 of the Indian Evidence Act i.e documents relating to affairs of State and official communications are protected. No such protection is carved out for section 126 of the Indian Evidence Act by the legislature. If there cannot be any immunity for summoning documents protected u/s 126, under section 91 of the CrPC, it can also not be restricted to be searched and seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48, does not limit the jurisdiction of the Department from seizing third-party documents. c. Section 126 of the Evidence Act, 1872, does not bar the Income-tax Department to seize any document that is made in furtherance of any illegal purpose. d. Section 126 is not a benefit for an Advocate during a search operation, but the Right of the client to claim privilege. Therefore, the Writ Petitioner s reliance on the same, lacks locus. e. All third parties who feel that their Right under Section 126 of the Evidence Act, 1872, is violated have plenty of opportunities to contest the same. It is to be noted that till now, not a single client of the Writ Petitioner has come forward stating the same. PART- II DURING THE SEARCH ACTION A. Allegations with respect to Hima Patel 18. All the averments with respect to Ms. Hima Patel were comprehensively dealt with in the Affidavit in reply of Respondent no. 3 dated 13.12.2023 at para no.58 to para No. 66 and at para No. 69. However, the said arguments and the rebuttals made in the court are reiterated and rephrased as below: 1. 1. Petitioner s averment: Ms. Hima Patel was forcefully taken to the office premises of the Petitioner. Counter Argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e occupied only by ladies or children. Also, as per the manual, where residential premises are to be searched or where the personal search of a lady may be required, it should be ensured that there is adequate representation of female officers/officials. Serving of summons did not fall in any of these criterias specified in the Manual. Also it is to mention that neither the residence of Ms. Hima Patel was occupied by only lady/children nor it was to be searched. So, the available lady constables which were hardly 20 in number were sent to the residential premises (where lady officers/officials were not available considering the skewed ratio of females in the workforce of the department) on priority basis, following the guidelines laid down in the search and seizure manual 2007. So, it is appropriate to mention at this juncture that not sending a lady official/officer/constable was not borne out of intention but was borne out of dire and unavoidable limitation. Further, as discussed there was no requirement as per the search and seizure manual, 2007 to send a lady officer/constable to serve a summons. 4. Petitioner s Averment: The Department took away mobile phones of her and her fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e premises of the Premises of the Petitioner Counter Arguments: A. It may be noted that Department wanted to maintain the sanctity of search and in view of the fact that the petitioner himself could not be available to remain present at office, as he was present at his residence where a parallel search was being conducted and therefore, Ms. Hima Patel, who was inextricably involved in the work of the petitioner at the office of the petitioner regularly and who had access to the key of the office, was summoned at the office to remain present in the search proceedings. B. Ms. Hima Patel was requested to cooperate in the proceedings, which she did voluntarily without any objection. She returned to her own residence at the end of each day s search and voluntarily returned back every morning to the office premises of the Petitioner, being the responsible person, in front of whom the premises could be searched, in the absence of the Petitioner being physically present in the premises, since it was her place of work. B. Allegations with respect to purported restrictions made on Petitioner and his family members: 19. All the averments with respect to alleged restrictions made on the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from his coaching class. Needless to say, if the daughter of petitioner had informed about her willingness to go to college, she would have been permitted to attend the same as was done in the case of Petitioner s son. 3. Petitioner s Averment: Movement of Petitioner s son and wife were also restricted. Counter Arguments: A. It is respectfully submitted that all the family members were allowed free movement within the house and all the basic necessities of all the family members were duly taken care of including movements of house help (in and out of the house) after following due procedure. Petitioner s son was also allowed to attend his coaching classes during the search after following due procedures. B. Also, on request, the Petitioner s son was allowed to meet his friend when he visited the house. C. It is also submitted that the Petitioner and his wife were also allowed to visit the temple on request on the morning of 06.11.2023. D. The said facts can also be verified from the two independent witnesses who were also present at the time of the search being conducted. E. It may please be noted that efforts were made to accommodate all the requests made as far as possible, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rments with respect to restrictions made on the petitioner and his family members during the search proceedings, were comprehensively dealt with in the Affidavit in reply of Respondent no. 3 dated 13.12.2023 at para no. 67, para no. 68, Para No. 89 to para no. 93 and para no. 95. However, the said arguments and the rebuttals made in the court are reiterated and rephrased as below: 1. Petitioner s averment: The digital data within the personal mobile phone and other personal digital devices of the petitioner as well as his wife was copied and the search was in violation of constitutional right of privacy. Counter Arguments: A The Right to Privacy is recognized only under Article 21 of the Constitution of India. This right can always be taken away with the authority of law. In the present case, the authority of law is expressly manifested by the language employed in Section 132(1) of the Income Tax Act. If at all there has been a breach of the right to privacy, such a breach would have the legal sanctity as it was done under the express authority of law. B. Regarding the right to employment and occupation under Article 19(1)(g), it is trite that this right is subject to reasonable re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to get clarity on the activities carried out at the premises of search, the maximum hours of recordings need to be viewed, therefore the recording was halted to avoid any loss of data. C. All the procedures and proceedings have been carried out in presence of two independent witnesses and nothing untoward has taken place during the entire course of the proceedings. No sort of high-handedness has been resorted to and the same has also not been alleged by the petitioner, though the CCTV was switched off. D. The only allegation with respect to CCTV being switched off is that officers not authorized also visited the office of the petitioner during the search. This allegation is false as only the Officers who were authorized as per the Warrant of Authorization had visited the office premises of the petitioner. 3. Petitioner s Averment: Even though, all seizures and inventory were taken on 03.11.2023 itself, search was prolonged to harass the petitioner into giving the original document of transaction between Mr. Vivek Patel and Mr. Trikam Patel which the petitioner did not have. Counter Arguments: A. The chain of events from the strike of search at the Petitioner s residential premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g photo copy of original document, found during search, approximately 700 pages in numbers have been taken in the custody of the department; and the same is indicated at Annexure A1 and Annexure A2, as mentioned in the Panchanama. Only the documents which were prima facie found to be useful for the purposes of the Income Tax Act, were photocopied and seized by the Department. It is clarified that no seizure of any original document of the Petitioner was made by the Department, so as not to paralyze his operation. B. With respect to the seizure of the digital data: While dealing with the digital data, utmost care was taken to maintain the integrity of the digital data by following all the techniques and methods prescribed by the Digital Evidence Investigation Manual, 2014, issued by CBDT (also prescribed by the CBI Manual, 2020 with the difference that original devices are not seized by Income Tax department). The detailed note on the legal and procedural aspects of handling of digital evidence has been described in the note annexed as Annexure- A to the counter affidavit filed on 23.01.24. However, a gist of the note has been categorized and summarized into three heads as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seizure actions carried out by the department. Similar methods are followed by other Central Investigation Agencies also. Such techniques and methods have become quite essential in the current digital scenario and serves two-fold purpose of finding the right evidence and maintaining the integrity and evidentiary value of the digital evidence found. 5. Petitioner s Averment: Search was conducted in unreasonable manner Counter Arguments: A. The Petitioner cannot dispute three aspects. Firstly, the search was preceded by a valid recording of the reasons to believe under Section 132(1) on the basis of material and information available. Secondly, a satisfaction note in this regard was also prepared and obtained valid approvals under the Act. Thirdly, the persons who conducted search operations were duly authorized under warrants of authorization issued by the concerned authority under the Act. Once this triple test gets satisfied, the search cannot be questioned on the basis of any procedural infirmities. B. Further, when the search was being conducted, all the procedures as prescribed in the search and seizure manuals for various segments of the search was duly complied with by the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, for this purpose the Investigation Wing needs to disseminate such information to the Jurisdictional Assessing Officer well before the expiry of the limitation period. Therefore, necessary observations may be made by this Hon ble Court, with regards to the exclusion of the period of litigation while calculating the limitation period under the Income Tax Act, 1961. 8. In rejoinder, learned senior advocate Mr. Soparkar submitted that respondent No.3 in his reply at Page No.288 has averred that one of the various sources based on which the targets were identified are social media and digital media and therefore, raised a very important question as to how and under which provision of law the respondents have accessed the digital media of the petitioner i.e. laptops etc. prior to the search. It was, therefore, submitted that the respondents have illegally tapped the digital media of the petitioner and his colleagues which is not legal. It was pointed out that the search action taken by the respondent authorities is not on account of the capacity of the petitioner but his clients and therefore, no search action could have been initiated at the premises of the petitioner. 8.1 It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the same would then become a roving and fishing inquiry which is prohibited under the law. Reliance was placed on the decision in case of Ajit Jain v. Union of India reported in (2000) 242 ITR 302 (Del.) which was upheld by the Apex Court reported in 2003 SCC Online (SC) 1464. 8.6 Learned senior advocate thereafter referred to and relied upon the decision of the Bombay High Court in case of Municipal Corporation of Greater Bombay v. Vijay Metal Works reported in AIR 1982 Bom. 6 wherein the Bombay High Court has stressed upon the duty of an advocate to protect confidential information of his client by observing that the only way of such information can be disclosed is when the client consents to disclosure of the same. 8.7 It was submitted by learned senior advocate Mr.Soparkar that in the facts of the case, the information in form of the data seized by the respondent authority is admittedly without the consent of the petitioner as the same was seized during the course of search from the office and residential premises of the petitioner and therefore, the petitioner is duty-bound to protect such information as the same was forcibly taken by the respondent authorities without the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law for conducting such illegal search by taking away the data from the office premises of the petitioner, who is a professional advocate, under the guise of incriminating material. It was, therefore, prayed that petition be allowed as prayed for. 9. Having heard learned advocates for the respective parties and having considered the submissions made by both the sides, the following questions would arise for our consideration. (a) Whether the search initiated by the respondent authorities at the residential and office premises of the petitioner is just, proper, legal and in accordance with provision of Section 132 of the Income Tax Act or not? (b) Whether the respondents are entitled to have the digital imaging of the data contained in various computers, laptops, electronic gadgets of the petitioner pertaining to third parties who are clients of the petitioner who is an advocate by profession, under the guise of collecting the data pertaining to the target group where the search operations were carried out by the respondent authorities? (c) Whether the respondents can be prevented from using and relying on the materials collected in the physical or digital format consequent to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. Evidence Act, 1872 126. Professional communications. No barrister, attorney, pleader or vakil, shall at any time be permitted, unless with his client s express consent, to disclose any communication made to him in the course and for the purpose of his employment as such barrister, pleader, attorney or vakil, by or on behalf of his client, or to state the contents or condition of any document with which he has become acquainted in the course and for the purpose of his professional employment, or to disclose any advice given by him to his client in the course and for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date on which the last of the authorisations for search was executed. 3. DGs IT (Inv.) are requested to ensure that officers of competence and proven integrity are taken in the Investigation Wing. The officers posted in the Investigation Wing will be trained at NADT in a special course for which arrangements will be separately made. 4. DGs IT (Inv.) are required to ensure strict compliance of the above guidelines /instructions. 11. On perusal of the provision of Section 132 of the Act, the issue with regard to interference by this Court while exercising Article 226 of the Constitution of India is no more res integra in view of the decision of the Apex Court in case of Pooran Mal v. The Director of Inspection (Investigation), New Delhi reported in (1974) 1 SCC 345, wherein the Apex Court has considered violation with regard to Articles 19(1)(f) and 19(1)(g) of the Constitution of India while upholding the constitutional validity of the provision of Section 132 of the Income Tax Act as under. 8. Search and seizure are not a new weapon in the armory of those whose duty it is to maintain social security in its broadest sense. The Process is widely recognised in all civilized count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly it cannot be disputed that in the case of a taxing statute it is open to the legislature to enact provisions which would check evasion of tax. It is under this power to check evasion that provision for search and seizure is made in many taxing statutes. It must therefore be held that the legislature has power to provide for search and seizure in connection with taxation laws in order that evasion may be checked. It is, now too late in the day to challenge the measure of search and seizure when it is en- trusted to income-tax authorities with a view to prevent large sale tax evasion. 10. Indeed the measure would be objectionable if its implement is not accompanied by safeguards against its undue and improper exercise. As a broad proposition it is now possible to state that if the safeguards are generally on the lines adopted by the , Criminal Procedure Code they would be regarded as adequate and render the temporary restrictions imposed by the measure reasonable. In the case just cited there was a proviso to sub-section (2) of section 41 which prescribed that all searches under the sub-section shall, so far as may be, made in accordance with the provisions of the Code of Crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 tax liability and how much will have to be returned forthwith. The object of the enquiry under subsection (5) is to reduce the, inconvenience to the assessee as much as possible so that within a reasonable time what is estimated due to the Government may be retained and what should be returned to the assessee may be immediately returned to him. Even with regard to the, books of account and documents seized, their return is guaranteed after a reasonable time. In the meantime the person from whose custody they are seized is permitted to make copies and take extracts. Sixthly, where money, bullion etc. is seized, it can also be. immediately returned to the person concerned after he makes appropriate provision for the payment of the estimated tax dues under sub-section (5) and lastly, and this is most important, the provisions of the Criminal Procedure Code relating to search and seizure apply, as far as they may be, to all searches and seizures under section 132. Rule 112 provides for the actual search and seizure being made af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, thoroughly unable to form any opinion. This would only mean that any belief entertained by him would be an arbitrary belief and legislation investing such an officer with the power to direct a search is per se unreasonable. in our opinions there is no substance in this argument. The Director of Inspection, as already seen in section 116 of the Income-tax Act, is an officer in the Income-tax Department next only in authority to the Board of Direct Taxes. Section 118 shows that all Inspecting Assistant Commissioners and Income-tax officers, besides being subordinate to the Commissioners, are also subordinate to the Director of Inspection. Under section 119(2) every income-tax officer employed in the execution of the Act is required to observe and follow such instructions as May be issued to him for, his guidance by the concerned Director of Inspection. Moreover under section 120 the Director of Inspection is required to perform such functions of any other income-tax authority, apparently, including the Income-tax Officers and his direct superiors, as may, be assigned to Mm by the Board. Under section 135 the Director of Inspection is competent to make any enquiry under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t say that if Mr. Karkhanis really thinks that there is substance in this argument, than he must be blissfully unaware of the manner in which income-tax is evaded. It is impossible to enumerate all the circumstances in which the necessary reasonable belief may be entertained under sub-clause (b). As an illustration, however, we may point out a case which fans completely under sub-clause (b). An assessee may be filing his returns from year to year regularly and his Assessments may be also completed in due course over years. Ms books of account and documents have been duly checked from year to year and the assessing officer is also completely satisfied that the returns are correct. But it might so happen that this apparently honest assessee has invested large funds in properties and other financial deals, reliable information about which finds its way to the Director of Inspection. In such a case no oracle is needed to tell the Director of Inspection that if a requisition is made on the assessee to produce his documents in connection with these financial deals and investments, the assessee will most certainly omit to produce or cause to be produced such documents. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the submissions made by both the sides on pre-search action of the respondent authorities, we are of the opinion that the petition would fail so far as challenge to the search operation qua petitioner is concerned. 11.3 However, at the same time, the way in which the search has proceeded from 03rd November, 2023 to 06th November, 2023 would require specific observations by this Court, more particularly the way in which the search proceedings were conducted by the respondent authorities and the explanation tendered by the respondent authorities by way of affidavit-in-reply and the averments made therein. The contentions of the respondent authorities and the allegations and the averments made by the petitioner with regard to conduct of the search is concerned, are already recorded hereinabove and therefore, the same are not repeated for the sake of brevity. Suffice it to say that the glaring conduct or the misconduct in carrying out the search operation has come on record which is required to be deprecated as under. (i) First and foremost, the role of respondent No.11 who has not defended himself by taking recourse to the stereotype affidavits filed by respondent Nos.7 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the respondent authority is nothing but an afterthought as it was known to the respondent authority that summons was to be served at the residence of a lady advocate and therefore, it was incumbent and mandatory for the respondent authority to send a lady constable instead of two police personnel with rifle. Without presence of a lady constable with respondent No.11 and instead of sending lady constable, two police personnel with rifle were sent with respondent No.11 which shows clear intention of the respondent authority to coerce Ms.Hima Patel, lady advocate, to cooperate and thereafter a show is made before this Court that Ms.Hima Patel has cooperated with the respondent authority to go voluntarily with them to the office of the petitioner and open the office by calling her brother to provide keys of the office. It is also found from the record that till 11.00 a.m. no lady constable was available at the office premises and inspite of that, respondents started search operation by switching-off the CCTV cameras, which otherwise would have recorded search operation as well as the condition of alone lady in the office premises of the petitioner. Such high-handed action on part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with law. 11.4 With regard to the contention of the petitioner that respondent authorities have tried to mislead this Court by showing the details in a sealed cover by referring to various seized materials are concerned, we are of the opinion that respondent authorities have never tried to mislead this Court inasmuch as the respondent authorities have shown the materials which was seized during the course of search, more particularly images taken from the electronic gadgets of the petitioner, which prima facie satisfies this Court with regard to the valid initiation of search proceedings at the residential and office premises of the petitioner. However, this Court is concerned only with the manner in which the search was conducted which has caused lot of concerns and heart- burning to the citizens of this country. 12. Now, with regard to the main issue in the entire matter is whether the respondents are entitled to use the seized materials in physical and digital form which, according to the respondent authorities, would be incriminating materials against any third party found during the course of search from the office and residential of the petitioner or not. To answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re years ago the Division Bench of this Court had opined in N.K. Textiles Mills -vs- CIT, [1966] 61 ITR 58 propounded that it was necessary and essential for these officers to take into custody only such books as were considered relevant to or useful for the proceedings in question. It was not open to them to indiscriminately, arbitrarily and without any regard for relevancy or usefulness, seize all the books and documents which were lying in the premises, and, if they did so, the seizure would be beyond the scope of the authorization . Our learned Brothers have designedly used the words proceeding in question , in order to clarify that material that may possibly be of relevance to the affairs of a third party, unconnected with the raided assessee and beyond the contemplation of the search and seizure exercise, should not be retained. All remaining doubts will be dispelled on a perusal of H.L. Sibal -vs- CIT, [1975] 101 ITR 112 in which the Division Bench has, inter alia, analysed Commissioner of Commercial Taxes -vs- Ramkishan Shrikishan Jhaver, [1967] 66 ITR 664 into four concomitants - (1)The authorized officer must have reasonable grounds for believing that anything necessary f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in the two laptops are of this character. The rigours of the law, inter alia the necessity to have reasons to believe so must be recorded and be followed by warrants. An indiscriminate search frustrates the whole scheme of Section 132 and emasculates the protective measures against these draconian powers. 17. Our research has led us to a reading of District Registrar and Collector, Hyderabad - vs- Canara Bank, AIR 2005 SC 186, which concerns the challenge to Section 73 of the Stamp Act (as substituted by A.P.Act No.17 of 1986), permitting any person authorized by the Collector to inspect registers, books, papers, documents and proceedings and to take notes and extracts as may be deemed necessary. Chief Justice Lahoti considered not only several precedents delivered by Courts panning the globe, but also the Article 12 of the Universal Declaration of Human Rights, Article 17 of the International Covenant of Civil and Political Rights, the European Convention on Human Rights; and the Canadian Charter of Rights and Freedoms which emblazons that Everyone has the right to be secure against unreasonable search and seizure ; and the New Zealand Bill of Rights which additionally qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses the words for the purposes of this Act and Section 133(6) permits a requisition to be sent to a bank or its officer. There are other Central and State statutes dealing with procedure for search and seizure for the purposes of the respective statutes. 18. We may also advert to the several decisions of different High Courts where the material which was not found as a result of search and seizure was discarded for the purposes of assessment under Chapter XIV-B. In the case of CIT -vs- G.K Senniappan, (2006) 284 ITR 220 it was held that the material collected during Survey under Section 133 does not constitute such evidence based on which assessment under Section 158BB can be framed. In the case of CIT -vs- Ravi Kumar the Court held that loose slips found during a Search cannot constitute substantial evidence to invoke Section 69A of the Act. Similar views have been endorsed by a Division Bench of this Court in CIT -vs- Ravi Kant Jain: [2001] 250 ITR 141, where the Court emphasized on the fact that Block Assessment under Chapter XIV-B cannot be a substitute for regular assessment and thus the change of opinion of Revenue on audited accounts seized during search cannot form the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is permitted to inspect the data contained on other files/folders relating to the 46 other parties but this data shall not be copied in any form. If, according to the Assessing Officer, the files/folders pertaining to any of the 46 other parties are connected with the EMAAR-MGF Group and would be required by the Assessing Officer for making a proper assessment on the EMAAR-MGF Group, this may be pointed out in writing to the representative of S.R. Batliboi Co. along with the material/reasons relied upon by the Income Tax Department for making its claim. It shall then be open to S.R. Batliboi Co. after considering the said material/reasons either to consent to the said claim made by the Income Tax Department or, alternatively, to challenge the same by adopting appropriate proceedings for this purpose. In the event S.R. Batliboi giving its consent or alternatively, failing in its challenge to the said claim made by the Income Tax Department, S.R. Batliboi Co. shall then make available a hard copy of the contents of the said connected filed/folders. The Civil Appeal is disposed of in the abovementioned terms. However, the question of law sought to be raised in the appeal is kept open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found to be incriminating leading to any tax evasion, then the respondents are entitled to consider the same in accordance with law without any restrictions as to whether the petitioner is involved for such incriminating material in any manner whatsoever or whether such documents are pertaining to or belonging to the petitioner or not in view of such presumption. 13.1 It was also submitted that the respondent authorities are, therefore, entitled to take action on the basis of the documents which are copied and seized by the respondent authorities found to be incriminating in any manner. In furtherance of such submission, it was submitted that the petitioner cannot have the protection of Section 126 of the Evidence Act, as, such protection is available to the clients of an attorney. The petitioner wants to have aid under Section 126, which stipulates that the petitioner cannot be compelled to give copies of documents which is a privileged communication, if the petitioner is not in knowledge of as to whether such document would give rise to any fraud or any other illegalities. Reference was made to the Illustrations (b) and (c) of Section 126 which shows that client s say to the atto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'search and seizure in sec.132; power to requisition books of account etc. in sec. 132A; power to call for information as stated in sec. 133. Sec. 133(6) deals with power of officers to require any Bank to furnish any information as specified there. There are safeguards. Sec.132 uses the words in consequence of information in his possession, has reason to believe . Sec. 132(1A) uses the words in consequence of information in his possession, has reason to suspect . Sec. 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 sec. 132(1) and 132(1A). There are also Rules made under sec.132(14). Likewise sec. 132A(1) uses the words in consequence of information in his possession, has reason to believe . Sec. 133 which deals with the power to call for information from Banks and others uses the words for the purpose of this Act and sec. 133(6) permits a requisition to be sent to a Bank or its officer. There are other Central and State statutes dealing with procedure for 'search and seizure' for the purposes of the respective statutes. 13.4 The Apex Court thereafter con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trine of attorney- client privilege, the respondent authorities can consider the documents which are incriminating which falls under Illustrations (b) and (c) of Section 126 of the Evidence Act. However, the documents which are found to be incriminating which would be covered by the Illustration (a) of provision of Section 126 cannot be utilised or no action can be taken upon such documents which are found to be incriminating which covered by Illustration (a). Meaning thereby that where the petitioner is found to be in possession of any document of his clients which, according to the respondents are incriminating prior to the employment of the petitioner in his legal capacity, then no action can be taken against such documents. Whereas, if it is found by the respondent authorities that the petitioner has come to the knowledge of fraud or illegal activity, if any, to be committed by the client during the course of his engagement as illustrated by Illustrations (b) and (c) to Section 126, the respondent authorities invoking provision of sub-section (4A) of Section 132 of the Act can take appropriate action in accordance with law. Of course, these findings are arrived at keeping in mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made to the respondents as to appointment of any independent agency as agreed before the Apex Court in the case of S.R. Batliboi (supra) by the respondent Department. However, learned Additional Solicitor General objected to such suggestion of the Court and upon the instructions submitted that such practice would set a wrong precedence for unearthing the evasion of tax in the country and to curb the generation of black money in the economy and every assessee would take recourse to such precedence and therefore, the respondent authorities are not agreeable to such suggestion, as in the facts of the case of S.R. Batliboi (supra), the documents and the papers were found during the course of search at the place of search of a third person and not at the place of search of a Chartered Accountant, whereas in the facts of the case, petitioner who is though a practicing advocate, but has been searched by valid initiation by invoking provision of Section 132 of the Act and this Court having been satisfied with regard to the initiation of the search in case of the petitioner, the discretion is vested in the respondent authorities who are the highest authority of the Income Tax Department t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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