TMI Blog2003 (10) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... dent No.3, on November 3, 2001, from the aforesaid locker. Heard learned counsel for the parties. Petitioner No.1 is the wife of petitioner No.2. They were married in December, 1990, and petitioner No.2 is one of the partners of the firm, Lallooji and Sons, at 1, Ram Bagh, Allahabad, which is registered under the Partnership Act. The firm has its offices and godowns at several places as mentioned in para. 8 of the writ petition. The names of the partners are mentioned in para. 9 of the petition. It is alleged that petitioner No.1 is not a partner of the firm. It is alleged in para. 12 of the petition that the family of petitioner No.2 consists of three units which reside in their respective separate portions in residential house No. 16/309, Gali No. 10, Joshi Road, Karol Bagh, New Delhi. These three units are: (i) Petitioner No.2 his wife and their children, (ii) Father of petitioner No.2, namely, Ramesh Kumar Agarwal, and his wife, Madhu Agarwal, and (iii) Mukul Agarwal (brother of petitioner No.2), his wife Smt. Ritu Agarwal, and their children. On April 27, 2000, a search was made by the income-tax authorities at the business premises of the firm at its head office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with its various annexures of the inventories as well as seizure of three keys made by the income-tax authorities is annexure 1. Apart from the seizure of the aforesaid keys, a restraint order under section 132(3) of the Act was also passed by the authorised officer of the raiding party against the aforesaid three sets of persons and the manager of the bank in respect of the operation of the aforesaid three lockers. A copy of the restraint order is annexure 2. In para. 25 of the petition it is alleged that it was only from the contents of the panchanama and the restraint order that the petitioners learnt that the warrant of authorisation was only in the name of petitioner No.2 and it was dated March 28, 2000. On June 22, 2000, a representation was made to respondent No.2 wherein a complaint was made to respondent No.1 regarding the infirmities and illegalities of the aforesaid search dated April 27, 2000. A copy of the representation dated June 22,2000, is annexure 3. An oral request praying for certain papers was made but the same were not supplied. It is alleged in para. 28 of the petition that the restraint order had ceased to be in force after the expiry of a period of 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he panchanama. Subsequently, respondent No.3 wrote a letter whereby it has been informed that the restraint order dated April 27, 2000, has been vacated vide annexure 8. It is alleged in para. 43 of the petition that seizure is wholly without jurisdiction and void. It is alleged in para. 44 of the petition that the seizure of the aforesaid jewellery found in locker No. B-237 is a fraud in law in view of the provisions of section 132(8A) of the Act. After the expiry of a period of 60 days the restraint order was wholly illegal and without jurisdiction. A counter affidavit has been filed and we have carefully perused the same. On the facts of the case we are of the opinion that this writ petition deserves to be allowed. The law is well settled that a warrant of search and seizure under section 132(1) can only be issued on the basis of some material or information on which the Commissioner/Director has reason to believe that any person is in possession of money, jewellery or other valuable articles representing wholly or partly income or property which has not been or would not be disclosed, under the Income-tax Act. In the present case, the respondents have not disclosed what was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income all the moneys which are received by him which do not partake of the character of income or income liable to tax. If an assessee receives, admittedly, a gift from a relation or earns agricultural income, which is not subject to tax, then he would not be liable to show the receipt of that money in his income-tax return. Non-disclosure of the same would not attract the provisions of section 132(1)(c). It may be that the opinion of the assessee that the receipt of such amount is not taxable may be incorrect and, in law, the same may be taxable, but where the Department is aware of the existence of such an asset or the receipt of such an income by the assessee, tl}en the Department may be fully justified in issuing a notice under section 148 of the Act, but no action can be taken under section 132(1)(c)." In Ajit Jain v. Union of India [2000] 242 ITR 302 (Delhi), it was observed that: "The mere fact that the petitioner was in possession of the said amount could not straightaway lead to the inference that it was his undisclosed income. . . the intimation simpliciter by the Central Bureau of Investigation, that the money was found in the possession of the petitioner, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... practice' and for, 'high rate of fee for operations' in the absence of any other material could not be construed as constituting information in consequence of which the Director could have reason to believe that the petitioner had not disclosed his income or would not disclose it. Living in a posh house or posh locality by itself were not material which could result in initiation of proceedings under section 132 of the Act specially when the petitioner is an old assessee. The standard of living maintained by him (petitioner) appears to have been added in the report more, as a recital to add gloss to the recommendation than with any sense of responsibility. What led to this inference is not stated. Not a word has been mentioned in the report, nor could any record, be shown to demonstrate that the standard of living was out of proportion so as to warrant the conclusion that the petitioner was concealing income. Even if the recommending authority had some notions of his own either on personal knowledge or on any inquiry, it should have been made available to the Director to draw the inference, as the action was to be taken by him. The requirement of 'reason to believe' is not an empty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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