Search by Bangalore authorities on petitioner's premises deemed illegal; search & proceedings declared void; writ petition allowed.

The court found the search conducted by Bangalore authorities on the petitioner's premises to be illegal as it did not comply with statutory requirements. The court declared the search and subsequent proceedings as illegal, allowing the writ petition. No costs were awarded, and the connected miscellaneous petition was closed.

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Issues Involved:
1. Legality of the search conducted on the petitioner's premises.
2. Jurisdiction of Income Tax authorities under Sections 132 and 120 of the Income Tax Act, 1961.
3. Validity of the Notification No.S.O.2914(E)(69/2014) dated 13.11.2014.

Detailed Analysis:

1. Legality of the Search Conducted on the Petitioner's Premises:
The petitioner challenged the search conducted at his residence and office on 30.08.2017, claiming it was illegal and contrary to the provisions of law. The petitioner argued that the search was initiated and conducted by the Income Tax authorities from Bangalore, whereas he fell under the jurisdiction of officers in Chennai.

2. Jurisdiction of Income Tax Authorities under Sections 132 and 120 of the Income Tax Act, 1961:
The petitioner contended that the operation of Section 132, which deals with search and seizure, is subject to Section 120, which deals with the jurisdiction of Income-tax authorities. According to the petitioner, the search by Bangalore authorities was illegal as they did not have jurisdiction over him.

The court noted that Section 132 allows for search and seizure operations if the authorities have "reason to believe" that certain conditions are met, such as failure to produce required documents or possession of undisclosed income. The court also referenced the proviso to Section 132, which allows officers to conduct searches in locations outside their jurisdiction if delays in obtaining authorization from the jurisdictional officer would be prejudicial to the interests of the revenue. This proviso was inserted to address the need for immediate and swift action in multiple locations.

Section 132(1A) permits the authorization of searches in additional locations not initially covered under the main warrant if new information is received during the search. This authorization can be issued even to non-jurisdictional officers, as indicated by the phrase "notwithstanding anything contained in Section 120."

3. Validity of the Notification No.S.O.2914(E)(69/2014) dated 13.11.2014:
The Department relied on Notification No.S.O.2914(E)(69/2014), which extended the territorial jurisdiction of specified Director Generals of Income Tax to include areas outside their control. The Notification was intended to enable officers to perform functions related to search and seizure across India. However, the court clarified that this Notification deals with the extension of jurisdiction concerning territory alone and not with regard to the assessee.

The court emphasized that the statutory scheme mandates that searches should be conducted by the jurisdictional officers of the assessee, with exceptions only for locations falling under different jurisdictions, subject to compliance with the conditions under the proviso to Section 132 and Section 132(1A).

Conclusion:
The court concluded that the search conducted on the petitioner by the Bangalore authorities was illegal as it did not comply with the statutory requirements. The warrant of authorization was issued by an officer who did not have jurisdiction over the petitioner. Therefore, the court declared the search and all subsequent proceedings as illegal and allowed the writ petition. No costs were awarded, and the connected miscellaneous petition was closed.

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