TaxTMI 
TaxTMI 
2009 (8) TMI 102
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....cts of the company/petitioner No. 1 as incorporated in its memorandum of association, works in the field of medical diagnostics by providing facilities of x-ray, pathology and ultrasound images. Dr. H. R. Agarwal, Dr. Sita Ram Agarwal, Dr. K. R. Agarwal and Dr. Mrs. Chitralekha Agarwal are on the board of directors of the said company. The registered office of the company is at 37/17, Westcott Building. The Mall Kanpur. Petitioners Nos. 3 to 6 work for the said company and derive remuneration from the company for the work done by them. 3. Petitioner No. 2 is a society registered under the provisions of the Societies Registration Act, 1860, and was granted registration on June 30, 1993, having its registered office at 15-257, Civil Lines, Kanpur, and has also been granted registration under section 80G of the Income-tax Act, 1961 (in short "the Act"), as well as under section 12A of the Act. 4. The competent authority appears to have authorised search against the petitioners under section 132 of the Act and pursuant to such act of authorisation, a search was conducted against each of the petitioners on September 14, 2002. The search was conducted at the registered office of pe....
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....bmitted that there was sufficient material on record and the competent authority had reasons to believe before authorising for search of the disputed premises. He has further submitted that search and seizure has been made strictly in accordance with the statutory provisions and no fault can be found against such search and seizure. There was sufficient material in possession of the authority, on the basis of which opinion was objectively formed and there were reasons to believe that assets had not been and would not be disclosed. 7. Heard Sri S. D. Singh learned counsel for the petitioner and Sri Shambhu Chopra, learned standing counsel for the Revenue. We have considered the rival submissions made by learned counsel for the parties and perused the record including the original record produced before us by the Revenue. 8. At this juncture it would be useful to refer to the relevant extract of section 132(1) of the Act, which reads as under: "132. Search and seizure.-(1) Where the Director General or Director or the Chief Commissioner or Commissioner or any such Joint Director or Joint Commissioner, as may be empowered in this behalf by the Board in consequence of informat....
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....tant tests where substantial charges received are not entered in the books. It has been further alleged that the reports which are not to be recorded are kept in the drawer of Dr. K. R. Agarwal and in an almirah kept under the table of Dr. Chitralekha Agarwal and also in a small room which is made over the bath room. Dr. K. R. Agarwal and Dr. Chitralekha Agarwal reside at A/276B, Parwati Bagla Road, Kanpur. The residential building has first class construction and the constructed area must be 3000 to 3500 sq. feet. Dr. S. R. Agarwal and Dr. H. R. Agarwal resides at 15/257, Doodwala Bangla, Civil Lines, Kanpur. Dr. M. R. Agarwal owns four flats in SRI towards Vishnupuri, Kanpur. The flats owned by Dr. Agarwal are given to him in lieu of the land on which the multi storied building is constructed. The flats are on ground and first floor. Two flats are given on rent and the other two are in possession of Dr. H. R. Agarwal. In the ground floor flat the doctor is running ultra sound imaging centre where he imparts training to aspirants. The fourth flat at first floor is vacant. Further, it has been informed that Dr. K. R. Agarwal solemnised marriage of his daughter in Delhi in whi....
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....ved and if the action proposed is approved search warrants may be issued in the name of persons listed overleaf" 11. Thus, on the basis of the secret information in writing received by ADIT, Kanpur, and on personal verification made by him by visiting the spot, a detailed note was put by ADIT on September 9, 2002, before JDIT (Investigation) Unit-1, Kanpur. The satisfaction note submitted by the ADIT has been examined thoroughly by JDIT (Investigation), Kanpur, and was of the opinion that a group of doctors are suppressing their income. After submitting the satisfaction report and on the basis of his own observation the JDIT submitted his note before the DIT, (Investigation), Kanpur. The DIT, Kanpur, after discussing the matter with JDIT took up the matter before the DGIT (Investigation) on September 10, 2002. The DGIT (Investigation) after considering all the facts gave his approval on September 11, 2002, and the DIT (Investigation) issued warrants of authorisation under section 132(l) on September 11, 2002, and in pursuance of the same search was conducted on September 14, 2002. 12. It has been contended in paragraph 12 of the counter-affidavit filed by the respondents, int....
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....red. As a precautionary measure in order to verify the secret information received by the concerned authority, personal visit was made by the Assistant Director of Income-tax (Investigation) and he found the secret information to be correct. 16. The blood test receipt dated September 7, 2002, issued in the name of N. Hari to N. H. Rao, ADIT (Investigation) for testing the blood of the concerned officer is on the Department's record which clearly reveals that the concerned officer had visited the business premises of petitioner No.1 on September 7, 2002, and had paid Rs.30 for getting his blood tested. Secret information and subsequent verification thereof by the ADIT (Investigation) clearly provide enough foundation and material to the authority to form the basis for reason to believe. Therefore, it cannot be said that the reason to believe, formed by the concerned authority, was on the basis of mere rumour or a gossip or a hunch. There was definite material before the concerned officer before exercising power under section 132 of the Act. 17. In order to authorize such a search under section 132 there must be two conditions (a) information in the possession of the name....
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....) (7) Union of India v. Ajit Jain [2003] 260 ITR 80 (SC) (8) Gyanendra Prakash Gupta v. Union of India [2008] UPTC 673 (9) Manish Maheshwari v. Asst. CIT [2007] 289 ITR 341 (SC) 20. The aforesaid cases are quite distinguishable and have no bearing on the case in hand. In all the aforesaid cases, the court has held that there was no relevant material before the concerned authority to form the basis to reason to believe. Whereas, in the present case as, we have already discussed that there was relevant material before the concerned authority, warranting issuance of search warrant under section 132 of the Act, It is not necessary that reasons be supplied to the person concerned, but the same should exist on record. Formation of requisite belief in consequence of such information is the sine qua non for passing such an order for search and seizure. In the present case, the said condition is fully satisfied. The authorisation in the present case has been made by the competent authority and has been issued objectively on the basis of the material in its possession. This court cannot examine the adequacy or sufficiency of such information. 21. A perusal of the original reco....