Law:

Section:

Section 132 of the Income-tax Act, 1961 - Search and seizure - Assessment years 1977-78 to 1985-86 - Petitioners, B and his wife, permanent residents of Goa, had floated several private limited companies - Income-tax authorities in consequence of an order passed by Commissioner under section 132(1) searched their premises and recovered certain fixed deposit receipts, cash and jewellery - After search and seizure ITO passed an order under section 132(5) against petitioners and retained seized assets on ground that they were of lesser value than amount of penalty and tax leviable - He also passed orders under section 132(7) read with section 132(5) against private limited companies - Whether in view of fact that Commissioner exercised powers under section 132(1) only after more than one complaint were received against petitioners and Assistant Director of Inspection on careful consideration recommended such search, it would be concluded that belief formed by Commissioner was genuine and authentic - Held, yes - Whether fact that assets seized from premises of petitioners were handed over to Commissioner and not to ITO concerned having jurisdiction over assessment of petitioners did not invalidate ITO's orders passed under section 132(5) - Held, yes - Whether fact that ITO passed orders under section 132(5) by placing reliance on statements made by witnesses without affording petitioners any opportunity to cross-examine such witnesses did not conclude petitioners' rights as order under section 132(5) was appealable, and petitioners could seek remedy in appeal - Held, yes - Whether in respect of same assets, ITO could pass orders against both petitioners as well as private limited companies - Held, yes - Whether ITO had authority to pass an order under section 132(5) against petitioners directing detention of assets - Held, yes Facts The petitioners, namely, B and his wife, being permanent residents of Goa, had floated several private limited companies, whose registered offices were all located at Srinagar. All these private companies were exclusively held by the petitioners and his children. The income-tax authorities in consequence of an order passed by the…

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