AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 854
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....e filament of the controversy is that the 1st respondent is engaged in the manufacture of C.I. pipes, fittings and manholes and has obtained the licence under the Central Excise Act. The factory in question has been filing income-tax returns under the Income Tax Act, 1961 (for brevity 'the Act'). On 16.2.2000 when the sole proprietor of the factory Shri Om Prakash Agarwal was absent, the officer of the Income Tax Department conducted a search both at the residential as well as the business premises. During the search of the residential premises, son of the sole proprietor was informed by the Income Tax Officer that the search operations were also being conducted at the factory premises. Despite such information he was not allowed to leave t....
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....port which was taken on record. The High Court placed reliance on decisions in Commissioner of Income-Tax v. Vindhya Metal Corporation (1997) 5 SCC 321, Dr. N.L. Tahiliani v. Commissioner of Income Tax (1988) 170 ITR 592 (Allahabad), L.R. Gupta v. Union of India v. Union of India (1992) 194 ITR 32 (Delhi) and Ajit Jain v. Union of India (2000) 242 ITR 302 (Delhi) and extensively quoting from Dr. Tahiliani's case came to hold as follows:- "At this stage it is relevant to refer to Para 40 of the writ petition, which is quoted below: "40. That in the facts and circumstances the Petitioner bonafidely believes that there was no information in possession of the officer issuing the warrant of authorization for search which could lead any reaso....
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....ated in the Code of Civil Procedure are also applicable to the writ proceedings." 5. We have no hesitation in opining that the reasons ascribed in the aforesaid paragraphs, leaves us absolutely unimpressed. We really cannot comprehend how an Advocate Commissioner was appointed to take inventory of the goods in respect of which the restraint order was passed by the revenue under the Act. That apart, it is difficult to appreciate how the denial in the counter affidavit filed by the revenue could be treated as an admission by implication to come to a conclusion that no reason was ascribed for search and seizure and, therefore, action taken under Section 132 of the Act was illegal. The relevant confidential file, if required and necessary coul....
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....he provision has inbuilt spheres. Proceeding to enumerate the spheres and other consequent facets, the Court ruled: "In the first place, it must be noted that the power to order search and seizure is vested in the highest officers of the department. Secondly, the exercise of this power can only follow a reasonable belief entertained by such officer that any of the three conditions mentioned in Section 132(1)(a),(b) and (c) exists. In this connection it may be further pointed out that under sub-rule (2) of Rule 112, the Director of Inspection or the Commissioner, as the case may be, has to record his reasons before the authorisation is issued to the officers mentioned in subsection (1). Thirdly, the authorisation for the search cannot be i....
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....r. 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. 7. In District Registrar and Collector, Hyderabad and Another V. Canara Bank and Others (2005) 1 SCC 496, while referring to Section 132 of the Act, it has been ruled that: "There are safeguards. Section 132 uses the words "in consequence of information in his possession, has reason to believe". (emphasis supplied) Section 132(1-A) uses....