Madhu Gupta v. DIT(Inv (2013) 350 ITR 598/256 CTR 21/82 DTR 116/214 Taxman 246( Delhi) (High Court)

S.132. Search and seizure--Warrant of authorization—Reason to believe-Existence of tangible material a prerequisite- Mere reason to suspect not sufficient, articles seized to be released to assessee,

The assessee challenged the search action. Allowing the petition the court held that the so-called information was

undisclosed and what exactly that information was, was also not known. At one place in the affidavit of the Deputy

Director of Income-tax, it had been mentioned that he got information that there was a "likelihood" of the documents belonging to the DS group being found at the residence of the assessee. That by itself would amount only to a surmise and conjecture and not to solid information and since the search on the premises of the assessee was founded on this so-called information, the search would have to be held to be arbitrary. When the search was conducted on January 21, 2011, no documents belonging to the DS group were, in fact, found at the premises of the assessee. The warrant of authorization was not in the name of the DS group but was in the name of the assessee. In other words, the warrant of authorization under section 132(1) had been issued in the name of the assessee and, therefore, the information and the reason to believe were to be formed in connection with the assessee and not the DS group. None of clause (a), (b) or (c) mentioned in section 132(1) stood satisfied in the assessee's case and, therefore, the warrant of authorization was without any authority of law. Had the warrant of authorization been issued in the name of the DS group and in the course of the searches conducted by the authorized officer, the premises of the assessee had also been searched, the position might have been different. But that had not happened in the case of the assessee. The warrant of authorization was in the name of the assessee and, therefore, it was absolutely necessary that the pre-conditions set out in section 132(1) ought to have been fulfilled. Since those pre-conditions had not been satisfied, the warrant of authorisation would have to be quashed. Once that was the position, the consequence would be that all proceedings pursuant to the search

conducted at the premises of the assessee would be illegal and, therefore, the prohibitory orders would also be liable to be quashed. The jewellery/other articles/documents were to be unconditionally released to the assessee.