|Question And Answer
|Satisfaction Note before issuance of search warrant u/s 132
|Surendra Mehta, Advocate, Jodhpur
|satisfaction note, Search and Seizure, search assessment, validity of search action, writ petition
|August 23, 2021
A search was conducted at various places of a group “G” thereafter, search was conducted in the case of persons who are connected or related with group “G”. Search was conducted at the premises of Mr. X under the wrong presumption that Mr. X is connected/related with group “G”. Mr. Y was similar named person of Mr. X. Actually, search was tobe conducted at the premisis of Mr. Y whereas it was wrongly conducted at the premises of Mr. X. During the search at the premises of Mr. X, not a sigle document / paper / valuable article or any evidence which shows any relation or connection to group “G”. In other words it can be said that the search was conducted at the premises of Mr. X in place of Mr. Y who happened to be a Director of that group “G”. Mr. X has strong presumption that no satisfaction note was drawn in the name of Mr. X before issuance of search warrant. Your valuable opinion is required on the point that whether writ petition under 226 is proper remedy or not for Mr. X. At present post search assessment u/s. 153A have been completed and appeals have been filed.
In Khem Chand Mukim v. PCIT (2020) 423 ITR 129 / 186 DTR 145 / 113 taxmann.com 529 / 313 CTR 14 / 270 Taxman 252 (Delhi) (HC) (Review petition of revenue is dismissed, Khem Chand Mukim v. PDIT (Inv.)(2021) 277 Taxman 222 (Delhi)(HC)) the Court held that mandatory reasons to believe were not recorded and search authorisation was not obtained prior to interception and conduct of search. Thus, search action was a completely unauthorized and a high-handed action on part of revenue, as mere possession of jewellery ipso facto would not be sufficient for officer to form a belief that same had not been, or would not be disclosed. Moreover, even clause (c) to section 132(1) could not be invoked since assessee was carrying on business of sale and purchase of jewellery and he was legitimately carrying same as his stock-in-trade. Accordingly search and seizure and ex post facto warrant of authorization issued by respondent revenue under S. 132 was to be quashed and all actions taken pursuant to such search and seizure were to be declared illegal and revenue was to be directed to forthwith return jewellery seized to assessee. The respondents were ordered to pay costs quantified at Rs. 50,000 .
In Shilpa Chowdhary v . PDIT (Inv) (2021)430 ITR 218/197 DTR 68/ 318 CTR 1/ 277 Taxman 576 (Delhi)(HC) dismissing the writ petition the Court held that , High Court can find out if there was reason to believe, however cannot determine whether reasons were adequate. Accordingly warrant of authorization is held to be valid .
It is worth filing the writ petition before the High Court . When writ petition is filed the Department is bound to produce the record before the High Court .If there is no recorded reasons , the Court may quash the entire proceedings and also order for cost . The assessee may also try to get the information by filling application under RTI whether there was any satisfaction note before issue of search warrant .