TMI Blog2023 (3) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... el not to conduct further enquiry or investigation and on the other hand before this Court the petitioner has stated that the respondents, even after lapse of 5 years, have not initiated any action. Such a dual stand taken is impermissible and therefore the writ petition is to be rejected. The mandatory condition contemplated under the Act regarding reason to believe , the file indicates certain intelligence informations about various investments which has been partly narrated in the counter filed by the respondents. Since the writ petition has been filed at the preliminary stage, certain informations and materials referred in the original files in the interest of petitioner need not be recorded in the order passed in the present writ petition. The counter reveals that there may be more such instances which is to be unearthed and the intelligence informations provided are also to be enquired into further for the purpose of initiation of further action. Investigations are to be conducted and an opportunity was provided to the writ petitioner to produce all those documents with reference to the informations or otherwise. The petitioner instead of furnishing documents and state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Management Act, 1999. 2.The petitioner states that he is the son of Late Justice P.S.Kailasam, former Chief Justice of the Hon'ble High Court of Madras and the Judge of the Hon'ble Supreme Court. The petitioner's mother is Mrs.Soundra Kailasam, a renowned Tamil Poet and a highly religious person. The petitioner is a law abiding citizen and have not violated any provisions of law. The petitioner is an Income Tax Assessee and regularly filing income tax returns by duly paying the applicable income tax. 3.Shockingly, the respondents 4 and 5, on the authorization dated 30.11.2017 issued by the 2nd respondent under Sections 37(1) (3) of the FEMA read with Section 132 of the Income Tax Act, 1961 and Section 30 of CPC, 1908, authorizing the respondents 4 and 5 to conduct the search at Muruganadi , 24/1, Kasturi Rangan Road, Teynampet, Chennai, and to visit the said place. The said address was the residence of the petitioner's parents which was kept under lock and key, ever since their demise. On ascertaining the fact that the petitioner, during the relevant point of time, was residing at No.16/11, Parthasarthy Gardens, Alwarpet, Chennai 600 018, the fresh sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by him since the year 2005-06. 4. Details of his bank A/Cs inside and outside India. 5. Details of family. 6. Copy of the ITRs filed since 2005-06 onwards till date . 6.The petitioner in response submitted a counter statement through his counsel on 01.12.2017 stating as follows:- Under instructions from my client, Dr.Sadayavel Kailasam, residing at No.24, Kasturi Rangan Road, Teynampet, Chennai 600 018. Officials of the enforcement directorate searched the residence and office of my client, Dr.Sadayavel Kailasam. It was a completely unjustified and unwarranted search. Nothing was found and nothing was seized. My client is an Income Tax Assessee for many years and has disclosed his assets and liabilities in the annual returns. He has no undisclosed asset. Yet the Enforcement Directorate, in excess of its jurisdiction, conducted a fishing and roving enquiry and, in the end, found nothing. My client has taken strong exception to the action of Enforcement Directorate and has lodged a strong protest, reserving his rights to take such legal action as may be necessary. 7.The learned senior counsel appearing on behalf of the writ petitioner ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ITO v. Seth Bros. [ITO v. Seth Bros., (1969) 2 SCC 324 : (1969) 74 ITR 836] in the first instance. 8.2. Such information must be in possession of the authorised official before the opinion is formed. 8.3. There must be application of mind to the material and the formation of opinion must be honest and bona fide. Consideration of any extraneous or irrelevant material will vitiate the belief/satisfaction. 8.4. Though Rule 112(2) of the Income Tax Rules which specifically prescribed the necessity of recording of reasons before issuing a warrant of authorisation had been repealed on and from 1-10- 1975 the reasons for the belief found should be recorded. 8.5. The reasons, however, need not be communicated to the person against whom the warrant is issued at that stage. 8.6. Such reasons, however, may have to be placed before the Court in the event of a challenge to formation of the belief of the authorised official in which event the court (exercising jurisdiction under Article 226) would be entitled to examine the relevance of the reasons for the formation of the belief though not the sufficiency or adequacy thereof. 10.The learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cie case and the reason to believe, ordered to conduct search and accordingly, the search and seizure was conducted into the premises of the petitioner and his professional places, hospital etc. 13.Counter reveals further that during investigation under FEMA that Shri.Karti P.Chidambaram is having various asserts in overseas countries and is closely associated with various overseas entities like Lorraine Mooney, Totus Tennis Ltd and Holben Hold Ltd., UK. It is also revealed during the investigation that the petitioner herein had effected various fund transfers from his personal accounts under the head of financial derivatives and others, secondary income and educational purposes during the period between August 2013 to November 2016. Since the petitioner herein had made transactions with suspicious overseas entities, on formation of reason to believe by the 2nd respondent, an authorisation for search warrant dated 30.11.2017 was issued by him to search the residential premises situated at Door No.24/1, Kasturi Rangan Road, Teynampet, Chennai and the hospital premises of the petitioner under Section 37(1) (3) of FEMA, 1999 read with Section 132 of Income Tax Act, 1961 and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cials for conducting appropriate investigation. 15.With regard to the contention of the petitioner, more specifically insufficiency of materials and non application of mind, it is stated that the 3rd respondent could have any information in his possession which could lead to the reason to believe that the petitioner had contravened to the provisions of FEMA, 1999, pursuant to which he could have issued fresh authorisation for search and that the fresh authorisation dated 01.12.2017 does not satisfy the requisite conditions and hence the whole search is vitiated and the documents are seized without any application of mind is incorrect and false. The 3rd respondent after satisfying the preconditions required under the provisions of the Act had issued fresh authorisation for search and the search was carried out in accordance with law. 16.The original files relating to the initiation of proceedings are placed before this Court. Regarding the delay on the part of the respondents, the learned Additional Solicitor General of India drew the attention of this Court with reference to the letter sent by the learned counsel for the petitioner, who in turn by letter dated 04.12.2017 has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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