TMI Blog1990 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... of the original petition, it is clear that Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores are sister concerns of the first petitioner-firm. Three other sister concerns are known as Messrs. Kalpaka Tourist Home, Messrs. Unnerikutty and Messrs. Kalpaka Oil Industries. On the showing of the petitioners themselves, the administrative office of all these business concerns is accommodated in the building bearing door No. VI/948, Mootolikandy Road. The premises of the first petitioner were searched by the income-tax authorities on the strength of the warrant issued by the first respondent under section 132 of the Income-tax Act. The search, according to the petitioner, was conducted in flagrant violation of the relevant prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vives for consideration is issue (a). That means that the only question that arises for consideration is : Is the search conducted by the income-tax authorities liable to be declared as illegal ? Learned counsel for the petitioners argued that the Commissioner had no materials before him providing a basis for his belief that the first petitioner is in possession of any valuable article or thing or money or bullion representing either wholly or partly income or property which has not been or would not be disclosed for the purposes of assessment under the Act, enabling him to authorise the officers to search the business premises of the first petitioner. Counsel in this connection made specific reference to the following facts stated in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The Commissioner has specifically refuted the above contention of the petitioners. Counsel for the Revenue in this connection made particular reference to the following excerpts from the counter-affidavit of the Commissioner : "9. The satisfaction reached by me on the basis of materials or the application of my mind to the materials and the action on the basis of the materials cannot be challenged as there were materials before me to satisfy me that the conditions precedent to the action culminating in the issuance of the warrant did exist in the case of the assessee. 10. The warrant of authorisation was issued bona fide and not at all for any collateral purpose. 11. As I submitted earlier, I had material information before me to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds. On going through the records, I am satisfied that the Commissioner issued the authorisation only on his being satisfied (this satisfaction is based on the information he got from the report of the Assistant Director of Income-tax (Investigation)) that the first petitioner-firm was in possession of a large quantity of undisclosed stock of textile goods. The report of the Assistant Director (Investigation) contains materials/facts, which, to my mind, enable any reasonable or prudent man to form a reasonable belief that the first petitioner is in possession of a large quantity of undisclosed stock of textile goods. It cannot, therefore, be held that the Commissioner, in issuing the warrant to search the premises, has exercised the power u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entrance from the ground floor to the first and second floors of the building. Having found no excess money or irregularity in the accounts of the first petitioner-firm while conducting the search on September 17, 1985, the disappointed officers drove away all the employees and partners who were present at that time from the said building and sealed the building under the pretext that they wanted to take physical verification of the stock of the textile business conducted by the first petitioner-firm. As a result, the business of Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores are completely paralysed since the entrance to their business premises has been blocked/closed by the officials authorised by the first responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax, in his counter-affidavit, has stated thus : " 15. The first respondent admits that a complaint was lodged with his office by the second petitioner on September 18, 1985, to the effect that the passage to the business premises of Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores was blocked. The third petitioner, Sri M. A. Sajeev, partner of Messrs. Kalpaka Bazar, had also sent a complaint on September 18, 1985, wherein he had stated that the authorised officers had harassed him and his employees by taking possession of the building and keeping custody of the business. The deponent had camped at Calicut on September 24, 1985, to give a personal hearing to the complainants. The Inspecting Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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