TMI Blog2022 (4) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfilled. The competent authority while taking the decision has taken into consideration the relevant facts and the other material based upon the information in its possession on the basis of which reasonable belief has been reached fulfilling the requirement of the mandate of Section 132 of the 1961 Act. In view of the above referred to legal position, we refrain from stating any further keeping in view the stage of the proceedings. - Civil Writ Petition No.22812 of 2021 Civil Writ Petition No.23329 of 2021,Civil Writ Petition No.24093 of 2021,Civil Writ Petition No.24095 of 2021 - - - Dated:- 10-2-2022 - HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH HON'BLE MR. JUSTICE SANDEEP MOUDGIL Present: Mr. Deepak Chopra, Mr. Deepak Aggarwal and Ms. Pratishtha Singh, Advocates for the petitioner(s). Mr. Tejender K. Joshi, Advocate for the respondents. AUGUSTINE GEORGE MASIH, J. CM-19536-2021 in CWP-22812-2021 Prayer in these applications is for permission to place on record Annexure P-33. Application is allowed subject to just exceptions. Annexure P-33 is taken on record. CM-19548-2021 in CWP-23329-2021 Prayer in these applications is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iding in House No.309, Sector 9, Chandigarh and are being regularly assessed to tax. They have been regularly filing their tax returns. Petitioner in CWP No.22812 of 2021 is engaged full time with M/s. Nureca Ltd. as the Chief Executive Officer and petitioner in CWP No.23329 of 2021 is engaged in full time with M/s. Nureca Ltd. as the Managing Director, which is engaged in the business of trading of healthcare products, petitioner in CWP No.24093 of 2021 is engaged in full time with M/s. Nectar Biopharma Ltd. as the Vice President and petitioner in CWP No.24095 of 2021 is engaged in full time with M/s. Nureca Ltd. as the Vice President, Administrative Advisory, which is engaged in the business of trading of healthcare products. 3. The challenge primarily is based upon the grounds that in the complete absence of any reason to believe for the respondents to conduct any search on the petitioner(s) under Section 132 of the 1961 Act and in the absence of any incriminating material, Assistant Commissioner of Income Tax, Central Circle-I, Chandigarh-respondent No.1 had no jurisdiction to issue notices under Section 153-A of the 1961 Act for the block period. Being apparently a wrongf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation in possession' of the competent authority as has been laid down on which basis 'reason to believe' that there would be non-production of the documents called for or where such notice has been issued had omitted or failed to produce or cause to produce such books of accounts or other documents as required by the summons or notice or where money, bullion, jewellery and other valuable articles or things etc. either wholly or partly income or property which has not been and would not be disclosed for the purposes of Income Tax Act, 1922 or the 1961 Act, then and then only further steps are required to be taken by the officer(s) as mentioned therein who may authorize an authorized officer to enter and carry out search and seize documents and valuables as detailed therein. Learned counsel for the petitioner has emphasized upon the aspect that before taking any action or even initiating proceedings under Section 132 of the 1961 Act, there must be prior information relating to the person to be searched on the basis of which the prescribed authority forms a reason to believe that any of the conditions prescribed in Clauses A to C of Section 132 (i) are satisfied. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been made to the judgment of the Hon ble Supreme Court in Dr. Pratap Singh Versus Directorate of Enforcement 1985 (155) ITR 166 (SC), where pari materia provisions in the Foreign Exchange Regulation Act were considered by emphasizing upon the necessity of recording of reasons in support of term reason to believe contemplated under Section 132 of the Income Tax Act. It may be mentioned here that the Hon ble Supreme Court proceeded to hold that nowhere in this Section, reasons recorded prior to authorizing the search needs to be disclosed or communicated to the person against whom warrants of authorization is issued. In para 9 of the judgment, six principles have been culled out and it is on the touchstone of these principles that the challenge, if any, posed to the search ordered on a person is to be tested. The same read as follows:- 9. The principles that can be deduced from the aforesaid decisions of this Court which continue to hold the field without any departure may be summarized as follows: (i) The authority must have information in its possession on the basis of which a reasonable belief can be founded that(a)the concerned person has omitted or fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of law, the Court has to exercise its extraordinary jurisdiction under Article 226 of the Constitution to satisfy itself if the action is maliciously taken or the power under this Section is exercised for a collateral purpose or not. If the condition of exercise of power is not satisfied, the proceeding is liable to be quashed. That does not mean that where the 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 vitiate the exercise of power. The Court cannot substitute its own opinion in the matter nor can the Court comment upon the irregularity in the course of entry, search and seizure committed by the officer acting in pursuance to the authorization. While exercising jurisdiction under Article 226 of the Constitution, the High Court does not act as an Appellate Authority nor can mere suspicion be the basis conferring jurisdiction to interfere in judicial proceedings. Care and caution needs to be taken while addressing the possibility and potential of conferring an undue advantage to the assessee which may have the effect of frustrating the endeavour of the revenue depending u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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