TaxTMI 
TaxTMI 
1987 (3) TMI 89
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.... Shri Harish Chander keeping the key of shop No. 235-do-." On April 23, 1986, the petitioner through his advocate wrote to the Deputy Director of Inspection (investigation) stating therein that the shop No. 235, Lajpat Rai Market, belonged to the petitioner, Parduman Singh, and it should be released to him. The petitioner received no reply and he sent a registered notice on May 19, 1986, for the release of the shop to him. To the same effect, the petitioner wrote another letter on July 25, 1986. On July 22/23, 1986, the Deputy Director of Inspection wrote to the petitioner that the shop under reference could be opened subject to his furnishing a bank guarantee equal to the market value of the shop or on his establishing his ownership of the shop. The petitioner through his advocate replied to the above letter and along with the letter sent income-tax and sales tax orders and some other documents to establish his title to the shop. On August 13, 1986, the petitioner through his advocate challenged the legality of the order requiring the petitioner to furnish bank guarantee or to establish his ownership before he could be permitted to open the shop. The case of the petitione....
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....Market, by paying any " pagri ". The respondent further stated that since it was not practicable to seize the property in question, a restraint order under section 132(3) of the Income-tax Act was served on the petitioner and the shop was sealed pending the completion of the enquiry. It is further stated that the shop in question is the property of the Rehabilitation Department, Government of India, and since the petitioner is neither the allottee of the shop in question by the Rehabilitation Department nor was he found in possession of the shop at the time of search, the possession of the shop could not be handed over to him and the possession of the shop in question has been given to the Managing Officer, Ministry of Home Affairs, Department of Internal Security, Rehabilitation Division, New Delhi, on January 8, 1987. We have carefully gone through the petition, the counter-affidavit, the rejoinder affidavit and the other papers placed on the record and we have no hesitation in coming to the conclusion that the order dated December 24, 1985, as well as the action of the respondents in sealing the shop are wholly illegal and without jurisdiction. Here we would discuss section 1....
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....ze any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search ; ... (3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.... (5) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) is seized under sub-section (1) or sub-section (1A), the Income-tax Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed, shall, within one hundred and twenty days of the seizure, make an order, with the previous approval of the Inspecting Assistant Commissioner." From a reading of the various provisions of section....
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....wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Income-tax Act. On a search of the shop, no documents, money, bullion, etc., was found in the shop. On these facts, the crucial question that arises is ; was the Assistant Director of Inspection competent to seal the shop and pass an order under section 132(3) of the Income-tax Act in respect of the shop? A plain reading of section 132 of the Act shows that its scope is limited to articles and things mentioned in section 132(1)(a), (b) and (c) and it does not include within its ambit " immovable property " because of the reason that the location of an immovable property is known, and no search has to be made for it, and if no search is called for, the question of seizure does not arise. Under section 132, the search and seizure go together. In Motilal v. Preventive Intelligence Officer, Central Excise and Customs, Agra [1971] 80 ITR 418 (All), a Division Bench comprising of Mr. justice R. S. Pathak, as his Lordship then was, and Mr. Justice R. L. Gulati, held (headnote): " The power conferred under section 132(1) of the Income-tax Act is contemplated in relation to th....
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....he context in which the expressions 'seizure' and ' search were used, where the location of the property was known to the Government, it could not be said that one Government department could search any other Government department and seize documents, money, etc." Mr. Jain, learned counsel for the respondents, referred us to L Devarajan v. Tamil Nadu Farmers Service Co-operative Federation [1981] 131 ITR 506 (Mad). It was held in the said authority that a " chose-inaction " would also be a thing and hence money kept in a bank will be " valuable thing" so as to be covered by the provisions of section 132. It was further observed that even in relation to an intangible asset like "debt " an order for attachment under section 132(3) can be made. We have carefully gone through the cited authority and, in our view, it is distinguishable and it has no application to the case in hand. Learned counsel for the respondents has not been able to cite a single authority where action under section 132(1) has been taken in regard to an immovable property. For the reasons stated, we hold that the action of the respondents in sealing the shop and passing an order under section 132(3) was to....
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....handing over possession of the property to the Rehabilitation authorities is wholly illegal and this action smacks of mala fides and was in all probability done after coming to know of the filing of the present petition. In ITO, Special Investigation Circle " B ", Meerut v. Seth Brothers [1969] 74 ITR 836 (SC), Mr. justice Shah, speaking for the court, observed as follows (headnote). " Since by the exercise of power under section 132 of the Income-tax Act, 1961, a serious invasion is made upon the rights, privacy and freedom of the taxpayer, the power must be exercised strictly in accordance, with the law and only for the purposes for which the law authorises it to be exercised. If the action of the officer issuing the authorisation or of the designated officer is challenged, the officer concerned must satisfy the court about the regularity of his action. If the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the court. If the conditions for the exercise of the power are not satisfied, the proceeding is liable to be quashed. But where power is exercised bona fide, and in furtherance of the statuto....