TMI Blog1984 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises No. 4/1, Roy Bahadur A. C. Roy Road. The petitioners contended that the respondents illegally, mala fide, indiscriminately and wrongfully searched the entire premises including the properties of petitioner No. 2's wife and also of the aunt. The said search was conducted, according to the petitioner, without observance of any of the accepted norms. The search party comprised of more than seventy persons. The search commenced at 9-00 a.m. and continued up to 7-30 p.m. Although a panchnama was prepared recording that the said search was conducted in an orderly fashion without hurting the religious sentiments of any of the occupants and that after the search, the search party offered themselves for personal search which was declined by the inmates, according to the petitioner, those recordings were false and malicious. But it appeared that the petitioners had signed those panchnamas without any protest. The petitioners contended that they were forced to sign under duress and coercion. The premises in which the search was effected is situated on a land measuring four bighas and comprised of built-in-area of more than 14,000 sq. feet. It was the case of the petitioners th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ratan Chatterjee, the Deputy Director lived very close to the premises. The petitioner's sister, Susmita, was married to Dr. Ashit Mukherjee, who is a close relation of the said Aroop Ratan Chatterjee. From the very inception of the said marriage, both the mother-in-law of Susmita and her husband ill-treated her. Dr. Ashit Mukherjee wished to open nursing home in the house of Sailendra Nath Roy in partnership with the wife of said Aroop Ratan Chatterjee who requested for necessary permission from Subir Roy to allow his premises to be used as a nursing home, but such request was turned down by the petitioner No. 1 and as a result due to this unpleasantness, Susmita was ill-treated by her in-laws and she was forced to leave her in-laws and come and stay with her parents. The divorce proceedings are pending before the Alipore Court. It was contended by the petitioners that the said search and seizure made by the Income-tax Department had been motivated and had been done at the instance, instigation and behest of the said Aroop Ratan Chatterjee. The petitioners reserved their rights to take legal steps by filing an action for defamation and damages before the appropriate forum. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jee. During the course of search, five safe deposit lockers held in various banks in Calcutta either singly or jointly with the members of his family were sealed under section 132, subsection (3) of the Income-tax Act. Various tenants were summoned and their statements were recorded only after being fully satisfied with the case being a fit case for search under section 132, warrants of authorisation were issued and such search was conducted on the basis of specific information regarding tax evasion which was verified through secret enquiries and searches were conducted pursuant to the warrants of authorisation. Such searches were made and conducted in an orderly fashion without hurting the religious sentiments of the occupants. Nothing untoward happened during the course of the search. Declarations to the effect were signed by Subir Roy on the panchnama made out in his name as well as the panchnama made in the name of his parents which he signed on their behalf. Such searches were conducted in the presence of independent witnesses. The officers leaving the premises at the time of search offered themselves for search which was declined. Before leaving the premises, everyone offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aste. The seized books of documents were duly handed over to the concerned Income-tax Officer under section 132(1)(a) of the Income-tax Act within fifteen days of the search. Smt. Lila Mahapatra, the Assistant Director of Inspection, Investigation, Income-tax Department, Calcutta, herself affirmed an affidavit stating the case of the respondents. The burden was on the petitioner to prove the mala fides on the part of the respondents. The petition lacked in material particulars to indicate such mala fide conduct on the part of the respondent. In the case of E. P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555, at p. 586 " The burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility." Further, court will refuse to investigate where particulars of such mala fide conduct are not given in the petition itself. In the case of Sukhwinder Pal Bipan Kumar v. State of Punjab, AIR 1982 SC 65, it was held (at p. 70) : " In our view, the allegations in the writ petitions are not sufficient to constitute an av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e useful for, or relevant to, any proceedings under the Act, he is authorised by law to seize those books of account or other documents and to place marks of identification therein, to make extracts or copies therefrom and also to make a note or an inventory of any articles or other things found in the course of the search. Since, by the exercise of the power, a serious invasion is made upon the rights, privacy and freedom of the taxpayer, the power must be exercised strictly in accordance with the law and only for the purposes for which the law authorises it to be exercised. If the action of the officer issuing the authorisation 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 to be struck down by the court. If the conditions for exercise of the power are not satisfied, the proceeding is liable to be quashed. But where power is exercised bona fide, and in furtherance of the statutory duties of the tax officers, any error of judgment on the part of the officers will not vitiate the exercise of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in its broadest sense. This process is widely recognised in all civilised countries. This power is given to the income-tax authorities with a view to prevent large scale tax evasion which would be objectionable in its due and proper exercise. Under section 132(1)(b) and (c), if the authority had reason to believe in consequence of information that a person to whom a summons or notice has been or might be issued will not produce or cause to be produced any books of account or other documents which will be useful for, or relevant to, any proceedings under the Income-tax Act or any person is in possession of any money, bullion, jewellery or other valuable article or thing representing either wholly or partly income or property which has not been or would not be disclosed for the purpose of income-tax, in such a case, the Director of Inspection may issue authorisation for search and seizure. There should be a rational connection between the information in possession and the belief formed thereon which would not be influenced by any extraneous or irrelevant purpose. When there is information and the concerned authority had reason to believe upon such information to issue authorisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of a number of persons on behalf of the respondents. In the case reported in Mamchand Co. v. CIT [1968] 69 ITR 631 (Cal), it was held that the enormity of the search could not be a ground for condemning the same if the search was otherwise justified. In the case of Mamchand Co. v. CIT [1970] 76 ITR 217 (Cal), it was held (headnote): " When the Commissioner of Income-tax issues a search warrant under section 132 of the Income-tax Act, 1961, it is the duty of the Commissioner to the court, when challenged, to show that he had prima facie 'reason to believe' so as to bring the matter within the four corners of section 132(1)(b) of the Act. He has to show facts which prima facie will convince the court that a reasonable man could, under the circumstances, form a belief which will impel him to take action under the law. The court will not go into the sufficiency or adequacy of such reasons. On the other hand, if the Commissioner failed to disclose even a prima facie case, or it could be established that there were no reasons at all or that the reasons were irrelevant or extraneous, or, if lack of honesty, that is to say, mala fides, could be established, then the court would h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e materials available with the Commissioner and whether they have a rational connection or relevant bearing to the formation of the belief. If the reasons are extraneous or irrelevant having regard to the purposes of the section, the action would be without jurisdiction. The belief also must be entertained in good faith and not by a colourable exercise of power. Subject to this, the opinion of the Commissioner is final and not open to question." Under section 132, sub-section (8), the books of account or other documents seized shall not be retained by the authorised officer for a period exceeding 180 days from the date of the seizure unless for reasons recorded by him in writing and approval of the Commissioner for such retention is obtained. Hence it is not in every case that the seized articles or documents will have to be returned within the specified period. Where an action of an officer issuing authorisation is challenged, the officer concerned must satisfy the court about the regularity of his action. If the action is maliciously taken or the power is exercised for a collateral purpose, it is liable to be struck down by the court. But where the power is exercised bona fide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded retention are recorded in writing by the authorised officer/ the concerned Income-tax Officer and approval of the Commissioner for such retention is obtained. In other words, two conditions must be fulfilled before such extended retention becomes permissible in law: (a) reasons in writing must be recorded by the authorised officer or the concerned Income-tax Officer seeking the Commissioner's approval, and (b) obtaining of the Commissioner's approval for such extended retention, and if either of these conditions is not fulfilled, such extended retention will become unlawful and the concerned person (i.e., the person from whose custody such books or documents have been seized or the person to whom those belong) acquires a right to the return of the same forthwith. It is true that sub-section (8) does not in terms provide that the Commissioner's approval or the recorded reasons on which it might be based should be communicated to the concerned person, but in our view, since the person concerned is bound to be materially prejudiced in the enforcement of his right to have such books and documents returned to him by being kept ignorant about the factum of fulfilment of either of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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