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TMI Blog1975 (7) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... to leave his premises. The reason given was that the latter had been ordered by his superior officers in that behalf. The son of the petitioner, Shri Kapil Sibal, advocate, was coming by air from Delhi and the wife of the petitioner was preparing to leave by car to receive him but she was also not allowed to leave the house. Shri Gurdial Singh Mann, a retired P. C. S. officer, and his wife had been staying with the petitioner for the last 415 days, because the father of the former was lying ill in the Post Graduate Institute of Medical Education and Research (P.G.I.), Chandigarh. They had been lodged in the guest room of the house in which their luggage was also kept. Shri Mann wanted to leave the premises for some work but the raiding party did not allow him to do so. The search of the premises was commenced at about 8-30 a.m. and it concluded at about 5-30 p.m. The raiding party also wanted to make a search of the luggage of Shri Mann and his wife to which Shri Mann objected. The petitioner also requested respondent No. 3 that it was unfair to conduct a search of the luggage of a guest because this action tantamounted to insulting the guest as well as the host. Upon thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had information or reasons to believe that any person had in his possession money, bullion, jewellery or other valuable articles, which represented wholly or partly income or property which had not been disclosed for the purposes of the Act. He also requested that he should be furnished information in the possession of the authorities as to how any of the articles represented undisclosed income of a particular year. Further, he contested the value put on these articles by the department. The other plea raised was that the notice was issued with a view to conducting a fishing enquiry by placing burden on the assessee to prove everything, which was not the intention of the legislature as manifested in section 132 of the Act. Towards the end, it was submitted : " In order to enable me to give a satisfactory reply to this notice, it is requested that the information asked for may kindly be supplied to me within a week. " On November 12, 1974, respondent. No. 4 informed the petitioner, vide annexure " P-8 ", that the value of the jewellery and the luxury articles had been taken on the basis of the market value, that the two cars which the petitioner possessed had also been taken i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso given. Towards the end, it was stated that since the acquisition of all the assets had been duly explained, the sum of Rs. 10,000 seized from his possession might be refunded or adjusted against the next instalment of advance tax payable by his client. On January 6, 1975, Shri Brij Mohan Khanna, advocate of the petitioner, addressed another letter (annexure " P-10 ") to the Income-tax Officer, in which it was stated that since the department had not asked for further clarifications, it was presumed that they were satisfied with the reply. It was further averred that if any inference adverse to the interests of the petitioner was to be drawn on the basis of the information supplied by him and the statement made by him, the same may be brought to his notice so that he may be able to satisfy the authorities by adducing evidence, if necessary. The learned counsel also demanded a reasonable opportunity of being heard and reserved his right to challenge the legality of the search and seizure in question. On the following day, the learned counsel addressed another letter (annexure " P-11 ") to respondent No. 1 drawing his attention to the fact that an order under section 132(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No. 4, which appeared to have been despatched from Patiala. The envelope contained an order passed by respondent No. 4 on January 14, 1975, at Camp Patiala with the approval of respondent No. 1. It was prayed that since this order had been passed in disregard of the injunction issued by this court, the same should be quashed. In support of the allegations made in this civil miscellaneous petition, the petitioner filed his own affidavit and an affidavit sworn by Shri S. C. Sibal, advocate. This petition and the main case came up for hearing before my Lord the Chief justice and Verma J. on January 20, 1975. On that day, the learned counsel for the respondents fairly and frankly conceded that in view of the facts disclosed in the affidavits of the petitioner and Shri S. C. Sibal, advocate, the order might be annulled. The Bench ordered accordingly. The Bench also made some observations about the departmental files and allowed the learned counsel for the petitioner to inspect the record. At the instance of Mr. Awasthy, the learned counsel for the respondents, it was clarified that the stay order issued by the Motion Bench would continue to operate till, the final disposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m with respondent No. 1 justifying the issuance of the search warrant. Respondent No. 4 filed the main return to the petition on February 11, 1975. It was denied that the petitioner was disallowed to leave the premises. He was only requested to be present at the time of the search and he agreed to the request. It was also denied that the wife of the petitioner was disallowed to receive her son at the airport. It is further submitted that the car of the petitioner was allowed to go to the airport, to bring his son. The placing of unnecessary restrictions on the movements of Shri Mann were also denied. It was further averred that since the room occupied by Mrs. and Mr. Mann was a part of the house of the petitioner, the luggage placed in that room had also to be checked up. In spite of the aggressive attitude of Mr Mann, no insult was meted out to him or to his wife. Regarding the search warrant issued against Shri Mann, it is submitted that respondent No. 1 did have information that Shri Mann was staying with the petitioner. The information was further to the effect "that there was a close inter-connection between the petitioner and Shri Mann ". The remaining pleas on this point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued the impugned warrant without any basis has been controverted in the following terms : " It is incorrect to say that the issuing of the warrant of authorisation against the petitioner was in furtherance of what is mentioned as 'a matter of policy'. In fact, information was received by respondent No. 1 that the petitioner had not been disclosing his correct income for the purposes of the Income-tax Act. It was further reported that the petitioner possessed undisclosed assets and thus was systematically evading payment of tax. He was following a systematic course whereby his wealth was considerably understated. It was also reported that the petitioner had in his possession money, bullion, jewellery and other valuable articles and things which represented income or property which were not disclosed for the purposes of the Income-tax Act. For some time past tax evasion by business-community and professionals like doctors, advocates, etc., has been engaging the attention of the department. A close watch was being kept regarding the business activities and professional income and the returns made and assessments finalised in the past. A careful analysis of this information was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing time-bound proceedings, the petitioner was himself trying to prolong them so as to make it impossible for respondent No. 1 to finish them in time. It was admitted that the premises of the lawyers were searched at various places on the same day but it was also asserted that on this ground alone the searches could not be held to be indiscriminate. The affidavit sworn by respondent No. 1 gives the following account of the circumstances under which the luggage of Shri Gurdial Singh Mann was searched : " However, at the time of recording his reasons for the search of the premises of the petitioner, the deponent had information that Shri Gurdial Singh Mann was staying with the petitioner. The information was further to the effect that there was a close inter-connection between the petitioner and Shri Mann. The Commissioner was, therefore, satisfied that in case Shri Mann was still there with the petitioner he would have to be included in the search operations. But a warrant of authorisation against him could not be given to the authorised officer inasmuch as had Shri Mann left the premises before the date of the search, there would have been an unnecessary and premature dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lery and other valuable articles and things which represented income or property which were not disclosed for the purpose of the Income-tax Act. For some time past tax evasion by business community and professionals like doctors, advocates, etc., has been engaging the attention of the department. A close watch was being kept regarding the business activities and professional income and the returns made and assessments finalised in the past. A careful analysis of this information was duly processed in the intelligence wing in the office of the deponent. Material was collected and facts were sifted. Thereafter, the matter was discussed with the various high functionaries working at various places in the charge of the deponent. After carefully going into the matter, the deponent was satisfied that immediate action was necessary in the case of some of the members of the business community and the various professionals including the petitioner. The deponent was satisfied that considering the business affairs of the petitioner he was in possession of accounts and papers which he would not produce before the income-tax authorities, if called upon to do so in the normal way. That is how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st with the petitioner. A reference has already been made to the affidavit of Shri Mann in which he had affirmed that he never lived in the house of the petitioner prior to October 14, 1974, and as a matter of fact he had been living in the M.L.As. Hostel (Haryana) with effect from October 2 to October 11, 1974. Shri G.S. Mann is stated to have some links and connections with the petitioner. We were of the view that if Shri Mann had not been living with the petitioner on October 7 and 8, 1974, the relevant entries in the file of the Commissioner of Income-tax about this point would have to be looked upon with a certain amount of suspicion. The learned counsel for the petitioner also brought to our notice a photostat copy of the relevant entry in the register, exhibit CW-I, maintained at the M.L.As.' Hostel (Haryana). In view of the importance of the question involved, we summoned Shri H.R. Minhas, guide-cum-clerk, Haryana Tourist Department, with the relevant register and recorded his statement. At the request of the learned counsel for the petitioner, we also examined Shri Mahant Ram, Watchman of the Hostel, and Shri Hardwari Lal, M.L.A., with whose good offices Shri Mann was perm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, 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, 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 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, 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 disclosed for the purposes of the Indian Income-tax Act, 1922, or this Act (hereinafter in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized : Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized : Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred in clauses (ii) and (iii) or any part thereof, the Income-tax Officer may, with the previous approval of the Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) He must record in writing the grounds of his belief, and (iv) He must specify in such writing so far as possible the thing for which search is to be made. After he has done these things, he can make the search. These safeguards, which in our opinion apply to searches under sub-section (2), also clearly show that the power to search under sub-section (2) is not arbitrary. Even if the above matters are not expressly mentioned in section 132(1) of the Act, they have assumed statutory character by the force of sub-section (13) of the same section. The important words of section 165, Code of Criminal Procedure, are " such officer may after recording in writing the grounds of his belief and specifying in such writing so far as possible the thing for which search is to be made ". Consequently, it cannot be argued with any justification that the statute does not require the Commissioner of Income-tax to record his grounds of the requisite belief. It is needless to point out that section 165, Code of Criminal Procedure, does not authorise a general search on the off chance that something might be found. See in this connection Divakar Singh v. A. Ramamurthi Naidu and Paresh C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for the actual search and seizure being made after observing normal decencies of behaviour. The person in charge of the premises searched is immediately given a copy of the list of articles seized. One copy is forwarded to the authorising officer. Provision for the safe custody of the articles after seizure is also made in rule 112. In our opinion, the safeguards are adequate to render the provisions of search and seizure as less onerous and restrictive as is possible under the circumstances. The provisions, therefore, relating to search and seizure in section 132 and rule 112 cannot be regarded as violative of article 19(1)(f) and (g). " It was further observed that the measure would be objectionable if its implementation is not accompanied by safeguards against its undue and improper exercise. In case the safeguards were on the lines adopted by the Criminal Procedure Code, they were to be regarded as adequate. When the revenue defends the validity of a taxing statute on the basis of the safeguards accepted as adequate by the highest court of the land, then it is bound to provide all these safeguards in their letter and spirit to those against whom action is taken under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exercise of the power. Whether the Commissioner entertains the requisite belief and for reasons recorded by him authorises a designated officer to enter and search premises for books of account and documents relevant to or useful for any proceeding under the Act, the court in a petition by an aggrieved-person cannot be asked to substitute its own opinion whether an order authorising search should have been issued. Again, any irregularity in the course of entry, search and seizure committed by the officer acting in pursuance of the authorisation will not be sufficient to vitiate the action taken, provided the officer has in executing the authorisation acted bona fide. " In N. K. Textile Mills v. Commissioner of Income-tax, a Division Bench of this court while interpreting the words " reason to believe " occurring in section 132(1) of the Act observed that the belief must be held in good faith. The existence of the belief and the reasons for the belief will be justiciable. Further, such belief should not be based on some suspicion. It must be based on information. In Balwant Singh v. R. D. Shah, Director of Inspection, Income-tax, New Delhi , a Division Bench of the Delhi Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in appeal over the decision of the Director of Inspection or the Commissioner regarding the existence of the reason to believe nor can the court examine the adequacy of the grounds on which the reason to believe entertained by such officer is based. But there is a limited area within which the reason to believe entertained by the Director of Inspection or the Commissioner can be scrutinised by the court. This area now stands clearly demarcated by several decisions of the Supreme Court and its extent and limit are no longer open to doubt or controversy.' " This matter is now firmly established that the condition precedent to the exercise of power of issue of authorisation is that the Commissioner of Income-tax must have the requisite reasons to believe in consequence of some information in his possession. He must arrive at this decision in an honest manner. If the conclusions are arrived at on the basis of no evidence or irrelevant evidence, the action taken would be struck down by the court. Section 34 of the Indian Income-tax Act, 1922, and section 147 of the Act lay down that if an Income-tax Officer has in consequence of the information in his possession reason to belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer had any material before him which could satisfy the requirements of either clause (a) or clause (b) of section 147. Therefore, he could not have issued a notice under section 148. Further, the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question No. 8 in the report which reads ' Whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148 ', he just noted the word 'yes' and affixed his signature thereunder. We are of the opinion that if only he had read the report carefully, he could never have, come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed, on them under these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings under section 34 of the Act is open to challenge in a court of law. From the cases decided under section 34 of the Indian Income-tax Act, 1922, and section 147 of the Act, additional support can be obtained for the conclusion that before the Commissioner can exercise jurisdiction under section 132(1) of the, Act, he must have information on the basis of which he should come to a reasonable belief for any of the requisite purposes mentioned in clause (a), (b) or (c) of that sub-section. So far as section 34 of the Indian Income-tax Act, 1922, and section 147 of the Act are concerned, it has been repeatedly held that power to act on information is not to be confused with the power to revise the earlier conclusion. The Income-tax Officer is not permitted to apply his mind afresh to the same issue or to correct his or his predecessor's errors of judgment, In Income-tax Officer v. Nawab Mir Barkat Ali Khan Bahadur it was observed as under : " The High Court was right in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks as having been maintained in proper course of business, it would be somewhat unjustified use of power on the part of the Commissioner of Income-tax to issue a search warrant for the production of these books of account unless of course there is information to the effect that he has been keeping some secret account books also. He has to arrive at a decision in the background of the mental make up of an individual or individuals jointly interested in a transaction or a venture. A blanket condemnation of persons of diverse activities unconnected with each other on the odd chance that if their premises are searched some incriminating material might be found is wholly outside the scope of section 165, Criminal Procedure Code. This power has to be exercised in an honest manner and search warrants cannot be indiscriminately issued purely as a matter of policy. The case of the petitioner will have to be examined in the light of these principles. It has been held in Seth Brothers' case that if the action, of the Commissioner in issuing a search warrant under section 132(1) of the Act is challenged, the burden lies on him to satisfy the court that he had taken action on proper and rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents. In cross-examination, this witness has stated that Mahant Ram, watchman of the hostel, stated before him that he knew that Shri Gurdial Singh Mann was Shri Hardwari Lal's man and on this account the room was allowed to be occupied by him. When questioned whether he could tell the time when Shri Mann arrived at the hostel, the witness replied that the time was mentioned in the register and he could not orally remember the time of his coming in and leaving the hostel. By and large, the testimony of this, witness remained unshattered. Shri Mahant Ram, P. W. 1, has stated that he was employed as a chowkidar in the Haryana M. L. A.s' Hostel at Chandigarh and his duty was to give keys of the rooms to the members of the Haryana Legislature and to collect back the same from them at the time of their departure. A register had been maintained showing the period containing the entries relating to the arrival and departure of M. L. As. from the hostel. The work inspector sends copies of the statement made out from this register to various offices including the office of the Haryana Vidhan Sabha for realising the charges due from the M. L. As. in respect of their stay in the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l or in the hospital. He, is duly corroborated on all material particulars by Shri M.R. Minhas, C.W. 1, and Shri Mahant Ram, P.W. 1, apart from the authentic documentary evidence referred to above. On May 5, 1975, we had particularly asked Mr. Awasthy, the learned counsel for the respondents, whether he would like to call any of the persons whose affidavits had been filed by the petitioner for cross examination touching this point. On that date he informed us that he would make a statement on this point on the next date of hearing. On May 7, 1975, we particularly questioned Mr. Awasthy whether he wanted to cross-examine Mr. Hira Lal Sibal or Shri Gurdial Singh Mann on this point or not Mr. Awasthy indicated that he had no such intention at that time. He also stated that he had no instructions to lead any evidence in rebuttal. The result is that though the respondents were given an opportunity to rebut the evidence about the stay of Shri Mann and his family in room No. 7 of the Haryana M.L.As.' Hostel With effect from October 2 to October 11, 1974, yet they declined to avail of the same. In the circumstances it stands established beyond any shadow of doubt that Shri Mann did not sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other documents, money, bullion, jewellery or other valuable article or thing have been kept and are to be found at House No. 29, Sector 5, Chandigarh. This is to authorise and require you, Shri R. K. Bali, I.T.O........ (Sd.) S. N. Mathur, 8-10-74 Commissioner of Income-tax, Patiala. Patiala-1. The record shows that no summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 131 of Income-tax Act, 1961, or any notice had been issued to Shri Mann for producing books of account, etc., on October 17, 1974. Furthermore, the warrant purports to have been issued by the Commissioner of Income-tax on October 8, 1974, because Shri Mann failed to comply with some notice issued to him on October 17, 1974, and yet responsible officers of the income-tax department have chosen to justify this action. According to respondent No. 1, warrant of authorisation against Shri Mann could not be given to the authorised officer inasmuch as " had Shri Mann left the premises before the date of search, there would have been unnecessary and premature disclosure of the fact that a search was also contemplated ". According to him, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zure issued by the Commissioner shall be in writing under his signatures and bearing his seal. This rule implies that the authorisation should be complete in all respects before the Commissioner appends his signatures and puts his seal to it. One cannot imagine that the Commissioner was unaware of the true meaning and import of this important statutory provision. This plea also appears to have been raised to cover up the wrong action taken by respondent No. 2 in the situation resulting from his unexpected presence at the premises of the petitioner on the date of the search. On page 2 of the file No. II marked by us, a list of 32 persons appears which purports to have been prepared pursuant to a note recorded by respondent No. 1 on October 1, 1974. A detailed reference to these documents will be made in the later part of the judgment. In this list, the name of the petitioner appears at No. 7, of his brother, Shri S. C. Sibal, appears at No. 8 and that of Shri G. S. Mann appears at No. 32 at the end of the list written in a different ink. It is the case of the respondents that the activities of the petitioner and those of Shri Mann were inter-connected. Had it been so, the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of I.A.Cs. at Patiala). A.D.I. should also prepare separate folders for the professional persons for different ranges, where authorisations, etc., may be kept along with my directions. Sd.S. N. Mathur, 1-10-74. " To begin with, some action was contemplated against the Patiala lawyers, because the Commissioner learnt that large-scale tax evasion was being practised by them. This conclusion was not derived from any external source and was inferred from the fact that most of them were submitting estimated incomes and no accounts or fee-books, or briefs to support the gross receipts were maintained. The fact that they were submitting estimated incomes was already known to the department because the concerned Income-tax Officers had framed assessments on that basis. If respondent No. 1 was not satisfied with this state of affairs he could have directed his Income-tax Officers to deal with such cases more carefully or he could have got these assessments reviewed by filing appeals, if the law permitted this course ; but he could not apply his mind afresh to the same set of facts for initiating action under section 132 of the Act. If he had realised that those who were living at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e correctly from year to year, but are understating the same and whereas they also have in their possession money, bullion, jewellery and other valuable articles and things which represent either wholly or partly income or property not disclosed for purposes of the Indian Income-tax Act, 1922, or 1961, I, therefore, request the Commissioner of Income-tax, Patiala-1, Patiala, to authorise action u/s 132 of the Income-tax Act, 1961, in respect of the said persons : 1. Shri H. L. Sibal. 2. Shri Bhagirath Dass, 3. Shri Anand Swarup. 4. Shri Mulkh Raj Mahajan and his sons, S/Shri M. K. Mahajan, B. K. Mahajan and J. K. Mahajan. 5. Shri S.C. Sibal. I also understand that one Shri Gurdial Singh Mann, at present residing within the premises occupied by Shri H. L. Sibal, at Chandigarh, is also in possession of unaccounted valuables and certain documents tending to prove the concealment of taxable income. I, therefore, request the Commissioner of Income-tax, Patiala, to authorise action u/s 132 of the Income-tax Act, 1961, in respect of that person also. Sd. J. S. Dulat, I.A.C. of I.T., Chandigarh, 7-10-74. " It has been held that the respondents came to know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sd. S. N. Mathur, Sd. S. N. Mathur, 7-10-74 7/10/74 see remarks of I.A.C. re. this matter in this note. Sd. S. N. Mathur, 7-10-74. " The original record of file No. 1 shows that respondent No. 2 had given the date as October 8, 1974, and had later on changed it to October 7, 1974. The important thing, however, is that at that time respondent No. 1 himself was not certain about the activities of Shri Mann. The authorised officer was being directed to verify the facts at the time of the search but the warrant had been issued in advance. This shows the type of mind which respondent No. 1 did apply to the case. The action taken by respondent No. 1 is clearly hit by the observations made by their Lordships of the Supreme Court in Chhugamal Rajpal's case. The marginal note quoted above and purported to have been recorded by respondent No. 1 directed the authorised officer to make an on-the-spot enquiry about the manner in which the petitioner utilised the services of Shri Mann. The authorised officer did not put any question on this point either to Shri Sibal or to Shri Mann when they were examined by him. He could not have disregarded such an important direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. By acting upon the conclusions arrived at by his subordinates instead of coming to his own conclusions, he has practically abdicated his statutory functions in their favour. This course is wholly unknown to law. At page No. 6 of file No. 1 some figures showing the returns submitted by the petitioner during the last five years and wealth-tax returns for two years have been scribed with the following note appearing on the right margin : " Return on estimate basis. List of briefs and co-relation of the same with fees not submitted. Top lawyers-fees vary between Rs. 1,000 to Rs. 3,000. Normal fee is Rs. 1,650 per hearing. If he works even for 200 days, gross receipts should be more than Rs. 3 lakhs per year. Gross shown Net shown 1970-71 1,09,548 75,601 1971-72 1,29,594 1,02,952 1972-73 1,48,669 1,03,810 1973-74 1,70,500 1,20,306 Gross receipts shown low. Needs investigation by getting records or briefs. Wealth showing a downward trend. 1969-70 3,30,622 Reason for this fall. 1973-74 911,267 (Sd.) S. N. Mathur." The total information relied upon has been derived from the record which was already in the possession of the respondents. This could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,000 were retained at the instance of respondent No. 2 on the basis of some instructions issued by the superior officers. On this point, we may observe that the petitioner's allegation that Rs. 10,000 bad been seized on the orders issued by respondent No. 2 has not been denied either by Shri R. K. Bali, the authorised officer, or respondent. No. 2, even though they did file affidavits in court on some other points. The sum of Rs. 10,000 had been seized because in the absence of any seizure no order under section 132(5) of the Act could be passed. The petitioner had been making, repeated requests for being supplied the information on the basis of which action under section 132(5) of the Act was contemplated and yet in spite of the clear provisions of rule 112A(4) of the Rules, he was not supplied this material. In spite of the fact that the Motion Bench had issued an injunction against the respondents restraining them to finalise the proceedings under section 132(5) of the Act, such an order was passed after the respondents had the knowledge of this fact. This matter has been dealt with separately in our judgment in Criminal Original No. 16 of 1975 decided today. Suffice it to men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect they had for the merits of the case. In any event no provision of law has been brought to our notice authorising the retention of seized documents by the respondents after action taken against an assessee under section 132 of the Act is quashed. On the other hand, rule 112B of the Rules lays down that if proceedings under section 132(5) of the Act culminate in favour of an assessee the articles seized have to be returned to the person from whose custody they were seized. For the reasons mentioned above, we quash the warrant dated October 8, 1974, issued by respondent No. 1 for conducting search of the premises of the petitioner, and the proceedings pending against him under section 132(5) of the Act. We also order that the documents seized from the petitioner be returned to him forthwith. The sum of Rs. 10,000 seized from his possession shall also be returned to him unless this amount stands adjusted with his consent against any lawful demand of the revenue. The petitioner will also be entitled to costs. This is not all. The learned counsel for the petitioner has submitted that a complaint under section 193, Indian Penal Code, should be filed against the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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