TMI Blog2000 (9) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... there was some nexus between the petitioners and Rakesh Kumar Ashok Kumar and R. K. and Co. in the matters relating to property dealing and, therefore, it was decided to survey the premises of the petitioners at 11/12,Grain Market, Jalandhar Cantt. Accordingly, the Deputy Director of Income-tax (Investigation-II), Jalandhar, issued authorisation dated December 23, 1998, under section 132A read with section 135 of the 1961 Act in favour of Sarv Shri S. K. Khanna, G. L. Dhall, M. L. Verma and Dinesh Gupta (all Inspectors of Income-tax), who conducted survey on December23, 1998. On discovery of incriminating documents, the survey was converted into a search operation under section 132(1) of the 1961 Act on the basis of the authorisation given by the Additional Director of Income-tax, Jalandhar. During the course of search operation, books of account and other documents were seized from the premises of petitioners Nos. 1 and 2. The petitioners have challenged the survey as well as search and seizureoperation by contending that the action taken by the respondents is ultra-vires the provisions of sections 132 and 133A of the 1961 Act. They have averred that the premises at 11/12, Grai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried out at the premises of the petitioners was consequential to the search carried out at the premises of Rakesh Kumar Ashok Kumar and R. K. and Co. and, therefore, no fault can be found with the action of the respondents. He produced the original file of the Department to show that after considering the note recorded by the Deputy Director, Income-tax (Investigation-II), Jalandhar, the Additional Director felt satisfied that it was a fit case for invoking section 132(1)(b) and, therefore, he issued a warrant of authorisation for conducting search and seizure operation at the premises of the petitioners. We have given serious thought to the respective submissions. Sections 132(1)(a), (b) and (c) and 133A(1) and (2) of the 1961 Act which have bearing on the contentions raised by learned counsel read as under : "132. (1) Where the Director-General or Director or the Chief Commissioner or Commissioner or any such JointDirector or Joint Commissioner, as may be empowered in this behalf by the Board, in consequence of information in his possession, has reason to believe that-- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account, other documents, money, bullion, jewellery or other valuable article or thing ; (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies there-from ; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing : . . ." "133A. (1) Notwithstanding anything contained in any other provision of this Act, an income-tax authority may enter (a) any place within the limits of the area assigned to him, or (b) any place occupied by any person in respect of whom he exercises jurisdiction, or (c) any place in respect of which he is authorised for the purposes of this section by such income-tax authority, who is assigned the area within which such place is situated or who exercises jurisdiction in respect of any person occupying such place, at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be disclosed for the purpose of the 1922 Act or the 1961 Act. The officer authorised in the manner indicated above can enter and search any building, etc., where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept and also seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search. Section 133A of the 1961 Act begins with a non obstante clause. It empowers an income-tax authority to enter any place within the limits of the area assigned to him or place occupied by any person in respect of whom he exercises jurisdiction at which a business or profession is carried on and require any proprietor, employee or any other person, who may be attending in any manner to, or helping in, the carrying on of such business or profession to afford him the necessary facility to inspect such books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be produced by him in case a summons under section 131 read with section 131(1A) of the 1961 Act is issued. The description given in the warrant annexure P-1 may be defective but that cannot be made a ground for declaring search and seizure at the premises of the petitioners as illegal. We have gone through the judgments relied upon by Shri Mittal and are of the opinion that the propositions laid down in them do not in any manner help the petitioners because each of the three cases was decided on its own facts. The facts of H. L. Sibal's case [1975] 101 ITR 112 (P H), show that the premises of the petitioner were searched on October 19, 1974. The warrant issued by the concerned authority was challenged by the petitioner on various grounds including the one of non-compliance of section 132(1) of the Act. A Division Bench of this court referred to the decisions of the Supreme Court in Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver [1967] 66 ITR 664 ; Pooran Mal v. Director of Inspection (Investigation) [1974] 93 ITR 505 and ITO v. Seth Brothers [1969] 74 ITR 836 and held as under : "The condition precedent to the exercise of power of issue of authorisatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 132 of the 1961 Act and observed as under : "The Act and the Rules do not require that the warrant of authorisation should specify the particulars of documents and books of account: a general authorisation to search for and seize documents and books of account relevant to or useful for any proceedings complies with the requirements of the Act and the Rules. It is for the officer making the search to exercise his judgment and seize or not seize any documents or books of account. An error committed by the officer in seizing documents which may ultimately be found not to be useful for or relevant to the proceeding under the Act will not by itself vitiate the search, nor will it entitle the aggrieved person to an omnibus order releasing all documents seized. The aggrieved party may undoubtedly move a competent court for an order releasing the documents seized. In such a proceeding the officer who has made the search will be called upon to prove how the documents seized are likely to be useful for or relevant to a proceeding under the Act. If he is unable to do so, the court may order that those documents be released. But the circumstance that a large number of documents have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at concealed incomes, any person who is in custody without enquiring about its true nature, exposes himself to search. Sub-section (4) of section 132 shows the way how such an innocent person can make the impact of the search on him bearable. All that he has to do is to tell the true facts to the searching officer explaining on whose behalf he held the custody of the valuables. It will be then for the Income-tax Officer to ascertain the person concerned under sub-section (5). (v) Though in a very rare case a tax evader may comply with a requisition, the Director of Inspection who has reliable information that the assessee has consistently concealed his income derived from certain financial deals may be justified in entertaining the reasonable belief that the assessee, if called upon to produce the necessary documents, will not produce the same. It cannot, therefore, be said that clause (b) of section 132(1) has over-reached itself." By applying the ratio of the decisions of the Supreme Court to the facts of this case, we hold that the search conducted at the premises of petitioners Nos. 1 and 2 is not vitiated due to violation of sections 132 and 132A of the 1961 Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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