TMI Blog2004 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... is quashed and the entire search and seizure is declared illegal - - - - - Dated:- 19-5-2004 - Judge(s) : M. KATJU., R. S. TRIPATHI. JUDGMENT This writ petition has been filed for a writ of certiorari to quash the impugned warrant of authorisation under section 132 of the Income-tax Act, 1961, and for a writ of mandamus directing the respondents to restore the possession of the cash amount of Rs. 6 lakhs seized from the petitioner from his residence as well as Rs. 1,40,000 seized from his bank locker No. 66 with the State Bank of India, Brindaban Gate, Mathura. The petitioner has also prayed for a mandamus directing respondents Nos. 3 and 4 to hand over the custody of the seized material to the petitioner including the valuables sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that on the basis of such records the petitioner has been regularly filing his income-tax returns in accordance with the requirement of the Income-tax Act and there arose no such occasion from which it could be inferred that the petitioner has at any time avoided compliance of statutory notices, etc. During this period his turnover and taxable income is as shown in the columns which are given in para. 5 of the petition. Copies of the balance-sheet and profit and loss account as are relevant for the assessment years 2000-01, 2001-02 and 2002-03 as also the related statements showing computation of income in all these years are annexures I, IA, II, IIA, III and IIIA to the writ petition. As regards the financial year 2002-03 relevant to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n para. 9 of the petition it is alleged that when the petitioner came back from outstation, he explained that as far as the cash amount of Rs. 5,71,673 is concerned the same represented partly cash balance as revealed by the Rokar maintained by Shree Girraj Supari Traders and partly the petitioner's income of the current year earned by him from speculation in silver. However, in spite of such a cogent explanation having been given by the petitioner, the petitioner was not given back the custody of the cash seized from his residential premises. During the course of search operation at the residential premises of Onkar Nath Agarwal who had been working as accountant with the petitioner and had also been assisting the petitioner's son, Sunil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck period. However, the cash found in the locker of Rs. 1,40,000 was seized vide panchanama dated December 13, 2002, vide annexure XI. The said panchanama shows that the warrant of authorisation relating to locker No. 66 had been issued by the Joint Director of Income-tax (Investigation), Agra, respondent No. 3. The certificate of the bank showing the dates of operation of the said locker is annexure XII. It is evident therefrom that the last date of operation of the locker was November 9, 1995, which fell beyond the block period. It is alleged in para. 16 of the petition that the authorisation was issued by respondent No. 2, the Director of Income-tax (Investigation), Kanpur, which was illegal as none of the conditions mentioned in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce as revealed by Rokar maintained by M/s. Girraj Supari Traders and partly the petitioner's income of the current year earned by him through speculation in silver. In para 8 it is stated that the entire jewellery weighing 2,226.500 gms. had been duly accounted for and has been disclosed in the income/wealth-tax return of Smt. Rajni Agarwal. Hence, seizure of 644.400 gms. gold jewellery was patently arbitrary and illegal. On the facts of the case, we are of the opinion that this petition deserves to be allowed. Admittedly, the petitioner and his wife are regular income-tax payers and they have been returning a progressive return of income over the last several years as is borne out from the chart in para. 5 of the petition. The computati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector is said to exist must be such material which was brought to the knowledge of the said authority prior to the search. In other words., the authorities cannot rely on material found during the search for taking the plea that this was the basis of the reason to believe, unless such material was brought to the knowledge of the authority who signs the warrant of authorisation before or at the time when he signs it. To take a contrary view would mean that the Commissioner/Director can issue a warrant of authorisation under section 132(1) without considering any material, and thereafter the Income-tax authorities can indulge in a fishing enquiry to uncover some undisclosed asset. No such view can be countenanced by this court, as it would g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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