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2009 (8) TMI 102

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..... writ petition has been filed, inter alia, for the following reliefs: (i) Issue a writ, order or direction and declare that the search conducted against the petitioners on September 14, 2002, as illegal and in contravention of section 132 of the Income-tax Act, 1961. (ii) Issue a writ, order or direction in the nature of certiorari and to quash the consequential block assessment notices dated April 29, 2003, and May 21, 2003 (annexure 5). 2. The brief facts as enumerated in the writ petition are as follows: Petitioner No. 1 is a company duly incorporated under the Indian Companies Act, 1913, within the meaning of section 3 of the Companies Act, 1956. Under the objects of the company/petitioner No. 1 as incorporated in its memorandum of association, works in the field of medical diagnostics by providing facilities of x-ray, pathology and ultrasound images. Dr. H. R. Agarwal, Dr. Sita Ram Agarwal, Dr. K. R. Agarwal and Dr. Mrs. Chitralekha Agarwal are on the board of directors of the said company. The registered office of the company is at 37/17, Westcott Building. The Mall Kanpur. Petitioners Nos. 3 to 6 work for the said company and derive remuneration from the company for the work .....

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..... iable to be quashed. (iv) The power of the income-tax authority regarding discovery, production of evidence, etc., is provided under section 131 of the Act. The power of survey is provided under section 133A of the Act and to collect information is provided under section 133B. Other than the aforesaid provisions there is no power vested with the income-tax authority to enter the premises or make any inquiry, etc. 6. On the other hand, Sri Shambhu Chopra, learned standing counsel for the Revenue, has contended that the search operation was legally valid and consequently notices under section 158BC of the Act was also valid. He has further submitted that there was sufficient material on record and the competent authority had reasons to believe before authorising for search of the disputed premises. He has further submitted that search and seizure has been made strictly in accordance with the statutory provisions and no fault can be found against such search and seizure. There was sufficient material in possession of the authority, on the basis of which opinion was objectively formed and there were reasons to believe that assets had not been and would not be disclosed. 7. Heard Sri S. .....

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..... r. K. R. Agarwal. In the pathology centre when a patient approaches for test of T3, T4 T145 he has to pay Rs. 700 as fees but the patient is asked to pay the fee directly to the doctor. The doctor gives a plain chit in the form of receipt to the patient on which the name of doctor is written to whom he has to report on the date of the report the patient collects his report by showing the chit which is taken back. Thus, the amount so received is not entered in the books of account. The routine tests payment is received on the counter itself for which proper receipts are issued and entered in the books and the important tests where substantial charges received are not entered in the books. It has been further alleged that the reports which are not to be recorded are kept in the drawer of Dr. K. R. Agarwal and in an almirah kept under the table of Dr. Chitralekha Agarwal and also in a small room which is made over the bath room. Dr. K. R. Agarwal and Dr. Chitralekha Agarwal reside at A/276B, Parwati Bagla Road, Kanpur. The residential building has first class construction and the constructed area must be 3000 to 3500 sq. feet. Dr. S. R. Agarwal and Dr. H. R. Agarwal resides at 15/257, .....

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..... professionals list where in the last doctor listed at serial No. 90 has shown yearly income of Rs.3.11 lakhs. Thus, the allegation made gains ground that the group of doctors are suppressing their income by a large margin and if at all summons under section 131 is issued and they are asked to submit the books of account bills vouchers in order to work out their correct income, they will not do so, as such I propose to unearth the true picture of their income and to recover unaccounted money from their possession, an action under section 132 of the Income-tax Act be approved and if the action proposed is approved search warrants may be issued in the name of persons listed overleaf 11. Thus, on the basis of the secret information in writing received by ADIT, Kanpur, and on personal verification made by him by visiting the spot, a detailed note was put by ADIT on September 9, 2002, before JDIT (Investigation) Unit-1, Kanpur. The satisfaction note submitted by the ADIT has been examined thoroughly by JDIT (Investigation), Kanpur, and was of the opinion that a group of doctors are suppressing their income. After submitting the satisfaction report and on the basis of his own observation .....

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..... expression information , observing that it must be something more than a mere rumour or a gossip or a hunch. There must be some material which can be regarded as information, which must exist on the file on the basis of which the Authorizing Officer can have reason to believe that action under section 132 is called for. It has already come on record that detailed secret information with regard to unaccounted black money was received by the concerned authority. The said information contained detailed facts and particulars which could not have been ignored. As a precautionary measure in order to verify the secret information received by the concerned authority, personal visit was made by the Assistant Director of Income-tax (Investigation) and he found the secret information to be correct. 16. The blood test receipt dated September 7, 2002, issued in the name of N. Hari to N. H. Rao, ADIT (Investigation) for testing the blood of the concerned officer is on the Department s record which clearly reveals that the concerned officer had visited the business premises of petitioner No.1 on September 7, 2002, and had paid Rs.30 for getting his blood tested. Secret information and subsequent .....

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..... petitioners has cited the following authorities of the apex court as well as of this court in support of his contention: (1) Ganga Prasad Maheshwari v. CIT [1983]139 ITR 1043 (All) (2) Dr. Mrs. Anita Sahai v. Director of Investigation [2004] 266 1TR 597 (All) (3)Ravi Iron Industries v. Director (Investigation) [2003] 264 ITR 28 (All) (4) Smt. Kavita Agarwal v. Director of Income-tax [2003] 264 ITR 472 (All) (5) CIT v. Vindhya Metal Co. [1997] 224 ITR 614 (SC) (6) Ajit Jain v. Union of India [2000] 242 ITR 302 (Delhi) (7) Union of India v. Ajit Jain [2003] 260 ITR 80 (SC) (8) Gyanendra Prakash Gupta v. Union of India [2008] UPTC 673 (9) Manish Maheshwari v. Asst. CIT [2007] 289 ITR 341 (SC) 20. The aforesaid cases are quite distinguishable and have no bearing on the case in hand. In all the aforesaid cases, the court has held that there was no relevant material before the concerned authority to form the basis to reason to believe. Whereas, in the present case as, we have already discussed that there was relevant material before the concerned authority, warranting issuance of search warrant under section 132 of the Act, It is not necessary that reasons be supplied to the person conce .....

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