TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 725
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....4. 3. The facts of the case as borne out from the petition are that a search and seizure was conducted under Section 132 of the Act on 11.05.2024 on Locker Nos. 179, 163 & 175, all located at South Delhi Vaults at W-113, Greater Kailash-2, New Delhi, of which the petitioners are the owners. Search was conducted on Locker No. 179 at South Delhi Vaults on basis of Warrant of Authorisation issued by the respondent in case of petitioner Nos. 1, 2 & 3. This was followed by search on Locker No. 163, on basis of authorisation, issued in case of petitioner Nos. 1, 3 & 4 followed by search on Locker No. 175 at the same South Delhi Vaults, on basis of authorisation to conduct search issued by the respondent, in case of Petitioner Nos. 1 & 3. 4. Details of the search and seizure of the lockers are as follows: Locker no. Items found Value Item seized or returned 179 TIME:01:40 PM-06:00 PM (Statement of P1 recorded) Bullion (263.170 gr. Gold) Jewellery (1028.580 gr gold and 54.25 ct diamond) Rs. 19,18,275 Rs. 88,35,127 Found and seized w.r.t P-1,2,3 (ANN. A2) (Panchnama - pg.52 Annexure B-pg.54 Annexure J-pg.55) 163 TIME:06:10 PM- 08:30 PM (statement of....
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....ition to issue notice/summon and hence Section 132(1)(a) of the Act is not attracted. Therefore, it cannot be a case of failure on part of the petitioners to produce or cause to be produced the books of accounts or documents. The petitioners are regular filers of income tax, and have always been compliant in filing their returns timely and properly. He also stated that no authorisation to conduct searches at the residential or business or other premises were issued to the petitioners, which indicates that these searches were done with a pre-determined mind. Additionally, on 11.05.2024 itself, searches were also conducted on various other unconnected lockers at the South Delhi Vaults, suggesting that all these searches are 'fishing and roving' searches. Also, due to these searches, the petitioners have been deprived of their Right to Property under Article 300A of the Constitution of India. 8. He relied on the judgment in the case of Income-Tax Officer v. Seth Brothers and Ors. (74 ITR 836) wherein the Supreme Court observed: "Since the power conferred, though not arbitrary, is a serious invasion upon the rights and privacy of the taxpayer, the power must be strictly exe....
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....om the competent authority prior to the search, and preconditions with respect to bona fide "reasons to believe" were met, hence, these searches were done in accordance with law. He further submitted that the condition under Section 132(1)(a) is not a mandatory requirement. The three clauses of Section 132(1) are mutually exclusive and every clause is followed by the word 'or'. Therefore, a search can be conducted on fulfillment of any of the three clauses therein. 11. Additionally, he submitted that there were reasons to believe that the petitioners have undisclosed income/bullion at these vaults, which was further substantiated in post-search enquiries. In any event, this was since, firstly, there was not just jewellery but also a lot of bullion found in the lockers: Secondly, the petitioners did not produce any documents at the time of the search to explain the source of these items. Even post proceedings, no documentary evidence was produced or explanation given for the same; Thirdly, the CBDT Circular No. 1916 talks only about small amounts, that too of jewellery and not bullion. This CBDT Circular did not absolve the petitioners from furnishing any explanations / d....
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....to while considering the validity of an act of authorization to conduct search and seizure. The belief recorded alone is justiciable but only while keeping in view the Wednesbury Principle of Reasonableness. Such reasonableness is not a power to act as an appellate authority over the reasons to believe recorded. 33. We would like to restate and elaborate the principles in exercising the writ jurisdiction in the matter of search and seizure under Section 132 of the Act as follows: (i) The formation of opinion and the reasons to believe recorded is not a judicial or quasi-judicial function but administrative in character; (ii) The information must be in possession of the authorized official on the basis of the material and that the formation of opinion must be honest and bona fide. It cannot be merely pretence. Consideration of any extraneous or irrelevant material would vitiate the belief/satisfaction: (iii) The authority must have information in its possession on the basis of which a reasonable belief can be founded that the person concerned has omitted or failed to produce books of accounts or other documents for production of which summons or n....
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.... good faith it cannot be merely a pretence. To put it differently it is open to the Court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the Section." 17. To substantiate his argument, he also relied on Income-Tax Officer v. Seth Brothers and Ors (supra) wherein the Supreme Court observed: "8. The Section does not confer any arbitrary authority upon the Revenue Officers. The Commissioner or the Director of Inspection must have, in consequence of information. reason to believe that the statutory conditions for the exercise of the power to order search exist. He must record reasons for the belief and he must issue an authorisation in favour of a designated Officer to search the premises and exercise the powers set out therein.... If the action of the officer issuing the authorization, 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 ....
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....ry belongs to the minor daughter of petitioner nos.3 and 4 and some belong to the daughter of petitioner nos.1 and 2; (ii) that before seizing the articles there is no compliance of the CBDT instructions dated 11.05.1994; (iii) the respondent had issued the authorization without having the information in its possession which can be termed as 'reasons to believe', as mandated under Section 132 of the Act; and (iv) no authorization to conduct search at the residential or business premises or any other premises were issued, which indicate that the searches were done with a pre-determinative mind and the respondent was 'fishing and roving'. 21. Having noted the broad submissions made and the law as relied upon the counsel for the parties, we shall now proceed to deal with the same. 22. Section 132 of the Act vests Income-Tax authorities with extensive powers to conduct searches and seizures in cases where they have "reasons to believe" that a person has concealed income or evaded tax. The search can be authorised only when "reasons to believe" have been formed by the authorising officer in consequence to relevant information in his possession as to the ....
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.... search and seizure under Section 132 of the Act was conducted in respect of a benami Locker no. 416 at South Delhi Vaults, W-113, GK-2, New Delhi. During the recording of the proceedings, the person in whose name the locker existed revealed that all the documentation procedure and rent of the locker was being paid by a third person, who had kept his belongings in the locker. The person in whose name the said locker existed never kept anything belonging to him in the said locker and the keys of the locker were always kept in possession of the third person. It was also stated by the person in whose name the locker existed that her husband was working in the office of the third person and had left the job. The South Delhi Vaults and Credit Limited owns South Delhi Vaults, situated at the above address. It is a company registered under the Companies Act, 1956 and maintains private lockers for use by private persons at various branches. The file suggested that a discreet enquiry revealed that there is a general tendency observed in private lockers inasmuch as though the lockers would appear to be in the name of a person, but the actual beneficiary or owners would be different. In terms....
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....113, GK-2, New Delhi, is justified, as can be borne out from the record produced by the respondent. 31. In fact the stand of the respondent before this Court is that pursuant to the search, the respondent had issued summons to petitioners no. 1 & 3 and their statement was recorded on oath wherein they failed to produce any bills or any other supporting documents in respect of jewellery and bullion found. 32. A reference was made by Mr. Arvind Kumar to Section 132(1)(a) of the Act to contend that satisfying the three conditions laid out therein is a mandatory requirement. However, we find that the three clauses of Section 132(1) of the Act are mutually exclusive and every clause is followed by the word 'or' and therefore, a search can be conducted on fulfillment of any of the three clauses. 33. In any case, it is settled law that formation of opinion and the "reasons to believe" recorded are not a judicial or quasi-judicial function but an administrative function. As such, the sufficiency of the information for forming the reasons to believe is not for this Court to examine in a writ petition. The only scope for judicial review in these matters is to examine if in fact ther....