2018 (5) TMI 263

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....ew Delhi to Agra for marketing and sale of jewellery products on 17.11.2016 and carried with them 643 items/pieces of jewelry. A search and seizure action was carried out at the Indira Gandhi International Airport on 24.11.2016 whereby AA, the petitioner No.2 was intercepted at the New Delhi Airport by the Assistant Director of Income Tax (Inv.) Air Intelligence Unit, New Delhi. He was found to be in possession of jewelry weighing around 3 KG gold. He was examined under Section 131(1)A of the Act of 1961 with a view to establish genuineness and source of ownership of gold jewelry i.e Bracelets, ear rings, rings, pendants, cufflinks, bangles, etc. In his statement, AA stated that he is an employee of petitioner No.1- company and the said jewelry is stock-in-trade of the company. In order to verify his statement, the authorities of the Income Tax Department tried to contact the Managing Director of the company but his mobile remained unanswered and as AA could not produce any books of accounts or documentation to explain that it was stock-in-trade of the petitioner No.1, the provisions under Section 132 of the Act of 1961 were invoked and the jewelry was seized. 3. It is stated th....

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....hi, he was waylaid at the Airport by the Income Tax Authorities and information conveyed by CISF. 5. Learned counsel submits that stand of the petitioner No.2 has always been that the seized goods were part of stock-in-trade of the employer company. The petitioner No.1 have also claimed the said goods being their stock-in-trade, documents in this regard has also been duly submitted. However, the respondents have illegally passed the order dated 19.07.2017 rejecting the application under Section 132 B. Learned counsel has taken this Court to the provisions of the Act of 1961 to contend that there was no reason for the respondents to withhold the seized goods. The submission is further that the authority has on the basis of presumptions and assumptions wrongfully rejected the application. Certain doubts which have been raised by the concerned authority while rejecting the application are in no manner related to the issue. It is their submissions that the material placed before the Authority was not adverted to. It is submitted that there was no case for the jewellery being unaccounted nor there was any ground for assuming that the petitioners were escaping assessment. 6. It is ....

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....of the authorities and the same cannot be faulted. The Supreme Court has laid down the principles in this regard and thus it cannot be said that the seizure was wrongful. 8. Having noted the submissions, the question involved for determining in the present case is, whether the decision not to release the seized jewellery to petitioner No.1/petitioner No.2 was justified or not. In view of the aforesaid judgment in the case of Director General of Income Tax (Investigation), Pune And Others (supra), the Supreme Court has held as under:- "4. The "classical' notion of the extent of power that the High Court would have in the exercise of its writ jurisdiction to cause such interference is formulated in ITO v. Seth Bros. And Pooranmal v. Director of Inspection (Investigation). The parameters of permissible interference as laid down in the aforesaid two decisions have stood the test of time and continue to hold the field even today. We may, therefore advert to ITO v. Seth Bros. in the first instance." 5. Considering the scope of Section 132 of the Act in ITO v. Seth Bros this Court ITR at p.843 held that:(SCC pp. 329-30, paras 8-9) "8. The section does not ....

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....re committed by the officer acting in pursuance of the authorisation will not be sufficient to vitiate the action taken, provided the officer has in executing the authorisation acted bonafide. 9. The Act and the Rules do not require that the warrant of authorisation should specify the particulars of documents and books of accounts a general authorisation to search for and seize documents and books of account relevant to or useful for any proceeding complies with the requirements of the Act and the Rules. It is for the officer making the search to exercise his judgment and seize or not to seize any documents or books of account. An error committed by the Officer in seizing documents which may ultimately be found not to be useful for or relevant to the proceeding under the Act will not by itself vitiate the search, nor will it entitle the aggrieved person to an omnibus order releasing all documents seized." 8. The principles that can be deduced from the aforesaid decisions of this Court which continue to hold the field without any departure may be summarised as follows: 8.1 The authority must have information in its possession on the basis of which a reason....