Law: Income Tax Act, 1961

Section: 132

Section 132 of the Income-tax Act, 1961 - Search and seizure (Warrant of authorisation) - Whether though necessity of recording of reasons before issuing warrant of authorisation, despite amendment of rule 112(2) with effect from 1-10-1975, has been repeatedly stressed upon by Supreme Court so as to ensure accountability and responsibility in decision making process, this, by itself, would not confer in assessee a right of inspection of documents or to a communication of reasons for belief at stage of issuing of authorization - Held, yes - Whether it is only at stage of commencement of assessment proceedings after completion of search and seizure, if any, that requisite material may have to be disclosed to assessee - Held, yes [Para 22] [In favour of revenue] Section 132 of the Income-tax Act, 1961 read with article 226 of the Constitution of India - Search and seizure (Power of High Court to interfere) - Whether in exercise of writ jurisdiction under article 226, High Court can go into sufficiency and adequacy of reasons and authenticity and acceptability of information on which satisfaction has been reached by authorities that warrant of authorisation is to be issued - Held, no [Para 26] [In favour of revenue] FACTS â–  On 8-6-2009 the Assistant Director of Income-tax (Investigation), had prepared an elaborate note containing several reasons as to why he had considered it reasonable to believe that if summons or notice were issued to the respondent-assessee to produce the necessary books of account and documents, the same would not be produced. The Assistant Director also recorded detailed reasons to believe that the promoters of the respondent-assessee company would be found to be in possession of money, bullion, jewellery, etc. which represented partly or wholly income which had not been disclosed for the purposes of the Act. â–  The said note was put up for consideration before the Additional Director (Investigation) who on perusal of the same, once again proceeded to record elaborate reasons for his belief that the conditions precedent for issuing warrant of authorization under section 132 did exist in the instant case. â–  Accordingly,…