Court upholds Income-tax Act searches based on justified authority, rejecting challenges on procedural grounds.

The court dismissed the writ petitions challenging searches conducted under Section 132(1)(b) and (c) of the Income-tax Act, 1961 on November 20, 1987, and November 27, 1987. The court held that the searches were justified as the authorities had the necessary information and belief for conducting them. The court rejected arguments regarding the non-satisfaction of conditions precedent, non-filing of counter-affidavits, and allegations of malice. No costs were awarded.

---

---

Issues Involved:
1. Legality of the searches conducted under Section 132(1)(b) and (c) of the Income-tax Act, 1961.
2. Satisfaction of the conditions precedent for ordering searches.
3. Adequacy of the information leading to the belief for conducting searches.
4. Non-filing of counter-affidavits by the authorities who issued the search warrants.
5. Allegations of malice and improper issuance of search warrants.

Detailed Analysis:

1. Legality of the Searches Conducted Under Section 132(1)(b) and (c) of the Income-tax Act, 1961:
The petitioners sought a writ of prohibition to prevent the respondents from proceeding further against them based on searches conducted on November 20, 1987, and November 27, 1987. The searches were challenged on the grounds that the conditions precedent under Section 132(1)(b) and (c) of the Income-tax Act were not satisfied. The court noted that the scope of the submissions was confined to specific aspects built on these provisions. The court examined whether the authorities had the requisite information leading to a reasonable belief that justified the searches.

2. Satisfaction of the Conditions Precedent for Ordering Searches:
The court emphasized that before invoking the power of search and seizure under Section 132(1)(b) and (c), there must be information in the possession of the authorized officer, leading to a reasonable belief that the conditions under these clauses are met. The court referred to several precedents, including Barium Chemicals Ltd. v. Company Law Board and S. Narayanappa v. CIT, which established that the existence of circumstances relevant to the inference must be demonstrable and that the belief must be held in good faith.

3. Adequacy of the Information Leading to the Belief for Conducting Searches:
The court scrutinized the records produced by the respondents and found that there were materials in the shape of information before the second and third respondents, which could legitimately form the basis for the belief that justified the searches. The court held that the materials were relevant to the subject matter of the searches and not extraneous to the scope and purpose of the Act. The court reiterated that the adequacy or sufficiency of the materials could not be the subject matter of scrutiny.

4. Non-filing of Counter-affidavits by the Authorities Who Issued the Search Warrants:
The petitioners contended that the authorities who issued the search warrants did not file counter-affidavits vouchsafing the satisfaction of the conditions precedent. The court held that the mere non-subscribing to a counter-affidavit by the said authorities shall not be put against the validity of the searches. The court found that the records demonstrated that the authorities were in possession of the requisite information and that their formation of the opinion was in good faith.

5. Allegations of Malice and Improper Issuance of Search Warrants:
The petitioners alleged that the search warrants were filled up only at the places of search, indicating a lack of application of mind. The court, however, found that the records showed that only the relevant portions applicable to the facts of the cases were maintained in the search warrants. The court was not prepared to accept the petitioners' bare assertions without specific rebuttal in the counter-affidavit. Additionally, the court dismissed the contention that the searches were tainted with malice merely because the petitioners were assessees and their properties were declared.

Conclusion:
The court dismissed the writ petitions, holding that the searches conducted on November 20, 1987, and November 27, 1987, were justified based on the information and belief held by the authorities. The court found no merit in the petitioners' contentions regarding the lack of satisfaction of the conditions precedent, the non-filing of counter-affidavits, and the allegations of malice. The court made no order as to costs.

---