Income Tax Act, 1961
Section 132—Search and seizure—Quashing of warrant of authorization by High Court—Appeal—Expression “reasons to believe” is a component of many statutes such as in the case of reassessment of income under the Act or it’s predecessor statute as well as in respect of action of the Revenue in the matter of search and seizure—Belief recorded must have a rational connection or a relevant bearing to the formation of the belief and should not be extraneous or irrelevant to the purpose of the section—It was a reasonable belief drawn by the Revenue that the assessee shall not produce or cause to be produce any books of account or other documents which would be useful or relevant to the proceeding under the Act—Such belief was not based upon conjectures but in a bona fide opinion framed in the ordinary conduct of the affairs by the assessee generally—Even clause (c) of Section 132(1) of the Income Tax Act is satisfied—Revenue may fail or succeed—That would be no reason to interfere with the search and seizure operation, denying an opportunity to the Revenue to unravel the mystery surrounding the investment made by the assessee—High Court was not justified in setting aside the authorization of search—Impugned order passed by the High Court is set aside—Appeal allowed.
[Paras 12, 27 & 28]
Decision : Appeal allowed