Search and seizure under section 132 requires true statutory necessity, with prior inspection rights before summary assessment.

Section 132 authorises search and seizure only when statutory preconditions are met, and property already in the known custody of the police does not justify a search-oriented warrant merely to take possession. The text also stresses that before a summary assessment under section 132(5) is made, the person from whom documents are seized must be allowed inspection and copying under section 132(9); refusal of that opportunity can offend fair hearing requirements and undermine the assessment where it relies on the withheld material.

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Issues: (i) Whether the warrants of authorisation and the search and seizure of the cash and documents lying in the police station were valid under section 132 of the Income-tax Act, 1961; (ii) whether denial of inspection and copies of the seized ledger and documents before passing the summary assessment order under section 132(5) vitiated that order.

Issue (i): Whether the warrants of authorisation and the search and seizure of the cash and documents lying in the police station were valid under section 132 of the Income-tax Act, 1961.

Analysis: The power under section 132 is conditioned by the Commissioner having, on the basis of information, a reason to believe that the statutory conditions exist. That power is directed to search and seizure where the assets are hidden or are not otherwise already in the custody of another public authority. On the facts found, the money and documents had already been recovered and were in the effective custody of the police station when the authorisation was issued. Their exact location was known, and no real search was required. The authorisation was therefore used to obtain possession of property already secured by the police, which was outside the proper scope of section 132.

Conclusion: The warrants of authorisation and the resulting search and seizure at the police station were invalid and without jurisdiction.

Issue (ii): Whether denial of inspection and copies of the seized ledger and documents before passing the summary assessment order under section 132(5) vitiated that order.

Analysis: Section 132(9) gives the person from whose custody books or documents are seized a right to make copies or take extracts in the presence of the authorised officer. The assessment order under section 132(5) was based on the ledger book allegedly seized from the petitioner, yet inspection and copying were refused before the order was made. The denial of that statutory opportunity also offended the requirements of fair hearing in the summary assessment proceedings, and the prejudice was compounded by reliance on the very material from which access had been withheld.

Conclusion: The assessment order under section 132(5) could not be sustained.

Final Conclusion: The writ petition succeeded, the assessment was quashed, and the money together with the ledger and other documents seized at Kartarpur was directed to be returned; the remaining seized books and documents were also directed to be dealt with according to law.

Ratio Decidendi: Section 132 authorises search and seizure only where the statutory preconditions truly exist, and assets already in the known custody of the police do not justify a search-oriented authorisation; further, a summary assessment founded on seized material cannot stand where the assessee is denied the statutory opportunity to inspect and copy that material before the order is made.

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