TaxTMI 
TaxTMI 
2020 (12) TMI 186
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....or of Income Tax (Inv.) Jamshedpur, leading to the issuance of the warrant of authorization by the competent authority on 27th October, 2008, premises of the persons mentioned therein, including the present Petitioner, namely, Ajay Kumar Singh were searched on 7th November, 2008. Undisputedly, certain articles, including cash, jewellery and papers were recovered from the bank locker jointly held by the Petitioner with his wife. Allegedly, reports and documents recovered revealed undisclosed transactions of considerably high value, running into thousands of lakh of rupees. 3. Petitioner lays a challenge to the warrant of authorization dated 27th October, 2008 and consequential action of conduct of search and seizure operation on 7th November, 2008, to be illegal, unauthorized and ultra vires the provisions of Section 132 of the Income Tax Act, 1961 and Rules 112 of the Income Tax Rules framed thereunder. 4. On facts, Petitioner does admit that four years before the conduct of search, he was Director in M/s Apcon Homes Private Limited. However, since his resignation in the year 2004, Shri Kaushal Kumar Singh and Dhirendra Kumar Singh took over its affairs, with the Petitioner havin....
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.... Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that-- (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this Section referred to as the undisclosed income or property) then,-- [the authorized officer may] (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open....
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....ows: "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 reasonable belief can be founded that-- (a) the person concerned has omitted or failed to produce books of account or other documents for production of which summons or notice had been issued Or such person will not produce such books of account or other documents even if summons or notice is issued to him Or (b) such person is in possession of any money, bullion, jewellery or other valuable article which represents either wholly or partly income or property which has not been or would not be disclosed... 8.3.There must be application of mind to the material and the formation of opinion must be honest and bona fide. Consideration of any extraneous or irrelevant material will vitiate the belief/satisfaction... 8.6. Such reasons, however, may have to be placed before the Court in the event of a challenge to formation of the belief of the authorized official in which event the Court (exercising jurisdiction under Artic....
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....t reasons were recorded while initiating proceedings. 16. In yet another decision of the Hon'ble Apex Court in the case of Union of India v. Agarwal Iron Industries, (2014) 15 SCC 215, it stood held that the High Court can scrutinize the file where the reasons for the search and seizure have been recorded and find whether the authority has appropriately observed and recorded the reasons that form the opinion requiring search and seizure. The Hon'ble Apex Court has recommended that in such instances the High Court should peruse the file and see whether the reasons meet the requirement of law. The relevant portions are extracted as follows: "10. ...The terms used are "reason to believe". Whether the competent authority had formed the opinion on the basis of any acceptable material or not, as is clear as crystal, the High Court has not even remotely tried to see the reasons. Reasons, needless to say, can be recorded on the file and the Court can scrutinize the file and find out whether the authority has appropriately recorded the reasons for forming of an opinion that there are reasons to believe to conduct search and seizure. As is evincible, the High Court has totally mis....
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....privacy is concerned, must be contained within the limits of the law. Hence a strict reading of these empowering sections is necessary to avoid the pitfall of granting unfettered powers to the Revenue Department. 20. Therefore, it would only be amenable to apply these draconian consequences of the invasion of one's privacy when a valid search has been conducted. These cases mentioned above serve to instil the gravity of the proceedings initiated under Section 132. 21. The search and seizure procedure requires the authority to apply their mind and pay heed to all relevant facts while concluding that a warrant of authorization must be issued. The authority, ought to record their reasons in reaching the conclusion that such proceedings ought to be initiated against the assessee. The jurisdiction of this Court merely extends to keeping a check on the relevance of the reasons recorded and not go beyond in assessing the sufficiency or adequacy of the reasons provided. 22. The Satisfaction Note was clearly concerned with tax evasion activities conducted by various companies and persons mentioned therein and the same has been relied upon by the authority to initiate the proceedings ....