Search and seizure under income-tax law must be targeted; indiscriminate seizure and abuse of power justify quashing.

Section 132 search and seizure must rest on a bona fide belief that relevant books or documents are available at the specified place, and the search must remain targeted to material relevant to the assessment. The court treated the operation as an abuse of power where numerous papers were seized indiscriminately, documents of other business concerns were taken, identification marks were omitted on some papers, current books were retained too long, and the overall conduct suggested a general raid rather than a focused statutory search. The search and seizure were therefore held invalid, and the seized documents were ordered to be returned.

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Issues: Whether the search and seizure proceedings under section 132 of the Income-tax Act, 1961 were vitiated by abuse of power and lack of bona fides so as to warrant quashing of the authorisation and return of the seized documents.

Analysis: Section 132 and rule 112 contemplate that the Commissioner must have reason to believe that relevant books or documents are available at a specified place, and the Income-tax Officer must then act on a formed opinion as to relevancy while conducting the search and seizure. The procedure is not meant to authorise a general or indiscriminate raid. Applying those requirements, the seizure here was held excessive and arbitrary: a very large number of documents were taken, some appeared unrelated to the assessment proceedings, documents belonging to other business concerns were also seized, identification marks were not put on all seized papers, current books were retained for an unduly long period, the police deployment was excessive, and the overall operation indicated a general search rather than a targeted search based on a real assessment of relevancy. On these facts, the action was treated as an abuse of the statutory power.

Conclusion: The search and seizure were invalid and liable to be quashed, and the seized documents were ordered to be returned to the petitioners.

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