TaxTMI 
TaxTMI 
2023 (3) TMI 1332
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...., No.24, Kasturi Rangan Road, Teynampet, Chennai - 600 018 is without jurisdiction, vitiated by malice in law and fact, abuse of authority, malafide exercise of power, violative of the Fundamental Rights of the petitioner under Articles 14 and 21 of the Constitution of India, arbitrary and consequently direct the respondents 4 and 5 to return all the items and documents seized during the search operation under Section 37 of the Foreign Exchange Management Act, 1999. 2.The petitioner states that he is the son of Late Justice P.S.Kailasam, former Chief Justice of the Hon'ble High Court of Madras and the Judge of the Hon'ble Supreme Court. The petitioner's mother is Mrs.Soundra Kailasam, a renowned Tamil Poet and a highly religious person. The petitioner is a law abiding citizen and have not violated any provisions of law. The petitioner is an Income Tax Assessee and regularly filing income tax returns by duly paying the applicable income tax. 3.Shockingly, the respondents 4 and 5, on the authorization dated 30.11.2017 issued by the 2nd respondent under Sections 37(1) & (3) of the FEMA read with Section 132 of the Income Tax Act, 1961 and Section 30 of CPC, 1908, authori....
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....ied under the schedule and not to depart until you receive my permission to do so". The Schedule to the summons listed out details and documents sought for under the summons:- SCHEDULE (As per Annexure - "A" enclosed) Annexure - A 1. Copy of his passport 2. Details of the Companies/Trusts in and outside India, in which he is director/shareholder/Trustee. 3. Details of the foreign remittances made/received by him since the year 2005-06. 4. Details of his bank A/Cs inside and outside India. 5. Details of family. 6. Copy of the ITRs filed since 2005-06 onwards till date". 6.The petitioner in response submitted a counter statement through his counsel on 01.12.2017 stating as follows:- Under instructions from my client, Dr.Sadayavel Kailasam, residing at No.24, Kasturi Rangan Road, Teynampet, Chennai - 600 018. Officials of the enforcement directorate searched the residence and office of my client, Dr.Sadayavel Kailasam. It was a completely unjustified and unwarranted search. Nothing was found and nothing was seized. My client is an Income Tax Assessee for many years and has disclosed his assets and liabilities in the annual returns. He has no undisclosed asset. ....
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....TR 836] and Pooran Mal v. Director of Inspection (Investigation) [Pooran Mal v. Director of Inspection (Investigation), (1974) 1 SCC 345 : 1974 SCC (Tax) 114 : (1974) 93 ITR 505] . 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. [ITO v. Seth Bros., (1969) 2 SCC 324 : (1969) 74 ITR 836] in the first instance." 8.2. Such information must be in possession of the authorised official before the opinion is formed. 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. 8.4. Though Rule 112(2) of the Income Tax Rules which specifically prescribed the necessity of recording of reasons before issuing a warrant of authorisation had been repealed on and from 1-10- 1975 the reasons for the belief found should be recorded. 8.5. The reasons, however, need not be communicated to the person against whom the warrant is issued at that stage. 8.6. Such reasons, however, may have to be pla....
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....EMA, 1999. 12.With reference to the cited above facts, the learned Additional Solicitor General of India reiterated that there was a "reason to believe" for invoking the provisions of FEMA and to conduct search in the premises. When the informations are collected and the Authority concerned found that there is a prima facie case and the reason to believe, ordered to conduct search and accordingly, the search and seizure was conducted into the premises of the petitioner and his professional places, hospital etc. 13.Counter reveals further that during investigation under FEMA that Shri.Karti P.Chidambaram is having various asserts in overseas countries and is closely associated with various overseas entities like Lorraine Mooney, Totus Tennis Ltd and Holben Hold Ltd., UK. It is also revealed during the investigation that the petitioner herein had effected various fund transfers from his personal accounts under the head of "financial derivatives and others, secondary income and educational purposes" during the period between August 2013 to November 2016. Since the petitioner herein had made transactions with suspicious overseas entities, on formation of "reason to believe" by the 2n....
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....red to conduct search by following the procedures as contemplated. In the present case, there is no procedural violations and the Authorities Competent scrupulously followed the procedures while conducting this act and provided opportunity to the writ petitioner to produce all the documents and cooperate with the officials for conducting appropriate investigation. 15.With regard to the contention of the petitioner, more specifically insufficiency of materials and non application of mind, it is stated that the 3rd respondent could have any information in his possession which could lead to the reason to believe that the petitioner had contravened to the provisions of FEMA, 1999, pursuant to which he could have issued fresh authorisation for search and that the fresh authorisation dated 01.12.2017 does not satisfy the requisite conditions and hence the whole search is vitiated and the documents are seized without any application of mind is incorrect and false. The 3rd respondent after satisfying the preconditions required under the provisions of the Act had issued fresh authorisation for search and the search was carried out in accordance with law. 16.The original files relating to ....