Law:

Section:

Section 132 of the Income-tax Act, 1961 - Search and seizure - General - Assessee-company engaged in manufacture of confectionery and one company ‘H‘ engaged in manufacture of Khaini belonged to ‘J‘ group - Subsequent to search conducted in ‘H‘s premises, simultaneous searches were conducted in premises belonging to assessee and other members of group and, consequently, notice under section 153A was issued to assessee - Assessee challenged said notice on grounds that facts pertaining to manufacture of Khaini were irrelevant so far as assessee was concerned and there was no direct or indirect connection of assessee with affairs of ‘H‘; and that there was no tangible material to justify authorisation of search and seizure in assessee‘s case - Whether since as a consequence of surveillance carefully carried out over a period of time, it had been noticed that returns filed in Khaini business did not match either output capacity of packaging machinery or numerous assets built-up and acquired by ‘J‘ group, it would be unreasonable to expect that a search would have been restricted only to family concerns dealing in Khaini business as income or profits or assets could well have been spread, or for that matter concealed, throughout family concerns - Held, yes - Whether, therefore, it could be said that there was sufficient material to come to an objective as well as subjective reasonable belief that a search under section 132 was justified and necessary in assessee‘s case - Held, yes FACTS The assessee-company engaged in the manufacture of confectionery belonged to the ‘J‘ group. The one company ‘H‘ engaged in manufacture of Khaini also belonged to ‘J‘ group. Subsequent to search conducted in ‘H‘s premises, simultaneous searches were conducted in premises belonging to the assessee and other members of group by issuing notice under section 132 and, consequently, the notice under section 153A was issued to the assessee. The assessee challenged the said notice on the grounds that : (1) facts pertaining to manufacture of Khaini were irrelevant so far as the assessee was concerned and there was no direct or indirect connection of the assessee with the affairs of ‘H‘; (2)…

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