INCOME-TAX OFFICER, SPECIAL INVESTIGATION CIRCLE-B, MEERUT versus M/S. SETH BROTHERS AND ORS.

Citation: [1970] 1 S.C.R. 601 · Decided: 15-07-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

• 
A 
B 
INCOME-TAX OFFICER, SPECIAL INVESTIGATION 
cmCLE:B, MEERUT 
v. 
MIS. SETH BROTHERS AND ORS. 
July 15, 1969 
[J. C. SHAH AND G. K. MITTER, JJ.] 
Indian Income Tax Act (43 of 1961), s. 132-Search and seizure-
Scope of power-Seizure of a (arge number of documents, some of which 
not relevant to pending proceeding under Act-If mala fide. 
C 
Under s. 132 of tbe Income-tax Act, 1961, 
the Commissioner of 
Income-tax or the Director of Inspection may, after recording 'reasons, 
order the search of premises if he .has reason to believe that one or more 
of the conditions in s. 132(1) exist. 
The officer authori~ed may enter 
any place and make a search \Vhere he has reason to believe that books or 
documents relevant to a!ly proceeding under the Act may be found. 
He 
may seize any books ~r documents and place marks of identification on 
them, and may remov~ them to the income-tax office. 
By the express 
D 
terms of the Act. and ilie Income-tax Rules, the officer designated to make 
the search may obtain ;the assistance of the police. 
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F 
G 
H 
The Income-tax Officer issued notice to the respondent-firm that its 
income chargeable to ta~ had escaped assessment and that it was proposed 
to reassess the income.: He also gave information to the Commissioner 
of Income-tax that the re·spondent was maintaining duplicate records fdr 
evading assessment of l]le true income and requested the Commissioner 
fdr authorisation under tS. 132 to enter and search the premises where the 
respondent was 
carryin~ on business. 
The Commissioner recorded his 
reasons ,And issued an order in the prescribed form authorising two Income-
tax Officers to enter th~.· pfemises, to search for and seize such books and 
documents as may be considered relevant or useful for the purpose of 
reassessment, and to place identification marks thereon and to convey 
them to the income-taxi' office. 
The premises were accordingly searched 
and the account books and certain documents found therein were seized 
and carried to the income-tax office. 
Petitions were filed in the 
High 
Court for writs of certihrari for quashing the, proceedings of the Income-
tax authorities, and consequential reliefs. 
The High Court granted the 
writs on the grounds : ,(1) that the order of search was made by the 
Commissioner at the direction of the Directorate of Inspection and with-
out satisfying himself about the existence of circumstances justifying seafch; 
(2) that besides the documents belonging to the respondent the Income-
tax Officers seized 'docutnents relating to the transactions of their allied 
concern which documents were irrelevant to the process of reassessment 
of the respondent; (3) that marks of identification were not placed on 
certain documents at the! time they were seized; 
( 4) that the documents 
seized were detained by the Income-tax Officer for more than two months; 
and (5) that the police force employed during the raid was excessive. 
i 
In appeal to this Court, 
HELD : ( J) The O:)nunissioner stated in his counter affidavit that 
before issuing the authorisation he was satisfied that, it was necer-sary to 
take action under s. 132 and that the authorisation Was not issued at the 
602 
SUPREME COURT REPORTS 
[1970) l S.C.R. 
direction of" the Directorate of InsPection. 
The Deputy Director of Ins-
'pection also stated in his affidavit 
that 
he never 
gave any 
direction 
to the Commissioner to issue authorisation for seafch 'and seizure. There-
fore, in reaching the cohclusion that the Commissioner acted at the behest 
of the Director of lnspection, the High Court was in error, because, having 
held that the correctness o'f the opinion formed. by tho income-tax autho-
rities was not open to scrutiny in a writ petition the High Court acted on 
mere affidavits and accepted the assertions of the respondents which )Vere 
specifically denied. by the Revenue authorities. [6}2 B-C; 613 D; 614 A-Bl 
(2) Since the power conferred: though not arbitrary, is a sefious inva-
sicn upon the' fights and privacy of thlf tax-paye'r, the power 
must be 
stuctly exercised in accordance with law and only for the purposes for 
\vh1ch the la\v authorises it to be exercised. 
If- the 'action of the officer 
issuing the authorisation or of 'the officer designated to make the search 
is challenged, they must satisfy the court about the regularity of the action 
taken. 
If the action is maliciously taken or. for a collateral purpose it is 
JiabJe to be struCk 

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