TaxTMI 
TaxTMI 
1995 (5) TMI 19
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....me-tax (Acquisition) at Bangalore. At that time, according to the petitioner, respondent No. 3 was the Chief Commissioner of Income-tax at Bangalore. He made certain reports reflecting adversely on the integrity of Mr. R. Bhardwaj. As a result, the residential premises of Mr. Bhardwaj were searched on July 1, 1987. On the same day, the business and residential premises of the petitioner were also searched. During this search operation, certain documents, a list of which has been produced as annexure P-1, were seized. On the same day, respondent No. 6 had also issued a notice under section 131 of the Act calling upon the petitioner to produce certain books of account. A copy of this notice has been produced as annexure P-2. The petitioner alleges that the search of his premises and the seizure of the books of account as also the notice issued by respondent No. 6 were wholly illegal and without jurisdiction. The petitioner challenges the action of the respondents in conducting the search of his premises primarily on the ground that " there could be no information with respect to the concealment of any of these items which may have led to the belief that the petitioner was in possessi....
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.... P. Sawhney, learned senior standing counsel for the respondent-Department. The questions that arise for consideration are-- (i) Was the action of the respondents in conducting search of the petitioner's premises in conformity with the provisions of section 132 of the Income-tax Act, 1961 ? (ii) Was the notice dated July 1, 1987, issued by respondent No. 6 without jurisdiction ? Re : (i) A perusal of section 132 of the Act shows that the competent authority is empowered to permit the " authorised officer " to enter, search, break open, seize, place marks of identification and take all other steps as contemplated in sub-clauses (i) to (v), However, there are conditions precedent. Firstly, the competent authority must have information in its possession. Secondly, on the basis of the said information, it must have reasons to believe that the condition/s as stipulated in sub-clauses (a), (b) and (c) of section 132(1) exist. It is only then that it can authorise the search of the premises and seizure of the documents, etc. Section 132 impinges upon the privacy of a citizen. It even carries a social stigma. To a sensitive man, the consequences can be serious. The Legisl....
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....ion 131 are issued to him. Therefore, if approved, the above three premises (residence and two business concerns) may be covered under section 132 of the Act, for which purpose warrants of authorisation are put up for signatures. (Sd.) ADI-1 DDI(INV.)U-I I am satisfied that this is a fit case for action under section 132. DI may kindly authorise search. (Sd.) June 30, 1987. DI(INV.)-II I am satisfied that this is a fit case for action under section 132 of the Income-tax Act. Warrant accordingly signed and issued. (Sd.) June 30, 1987." On a perusal of the above note, it is clear that according to the Assistant Director, information had been received regarding the factum of search by the C.B.I. and the Income-tax Department on the premises of Mr. Bhardwaj. It was also observed that " it is informed that Mr. Bhardwaj had invested his ill-gotten funds with his relatives ". A further suspicion was expressed that he " is very likely to have invested monies in the businesses of his father-in-law ". Without anything more, the request of the Assistant Director for action under section 132 was endorsed by the Deputy Director and approved by respondent No. 1. ....
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....as no information. At least none was produced in spite of various opportunities. Similarly, in the warrant of authorisation, it was claimed by the first respondent that " information had been laid before " him and that on the consideration thereof, he had reasons to believe that " if a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 131 of the Income-tax Act, 1961, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, . . . . is issued to Shri Janak Raj Sharma to produce or cause to be produced, books of account or other documents . . . . he would not produce or cause to be produced, such books of account or other documents. . . ." It was also observed that " Shri Janak Raj Sharma is in possession of money, bullion, jewellery or other valuable articles. . . ." Clearly, there was no information with the respondents and the conclusions were wholly unfounded. Factually, respondent No. 1 had no information available to him on " record ". There was no material on the basis of which he could have reasons to believe that the conditions precedent for proceeding under section 132(1) were satisf....