What the Delhi HC held on search and seizure under Section 132 of Income Tax Act

The Delhi High Court has recently held that a warrant of authorization issued under Section 132 of the Income Tax Act, 1961 (IT Act) can be continued to search another premise either on the same date as the date issuance of the warrant or immediately thereafter in close proximity..However, if an immediacy for carrying out the search does not arise, the concerned officer ought to obtain a fresh warrant of authorization..“If as a consequence of information in possession of the concerned officer, he has reason to believe that any person is in possession of money, bullion, jewellery or other valuable articles or things, which represents, either wholly or partly, the income or property which is not being or would not be disclosed, then the concerned officer can authorize the officer referred under the provisions of Section 132, to enter and search, inter alia, any building or place where he has reason to suspect that such money, bullion, jewellery or other valuable articles or things are kept…(such warrant of authorization) could be continued either on that date or immediately thereafter in close proximity to the said date of the warrant of authorization.”.The High Court’s observation came in a writ petition filed by one Anju Goyal against the Central Board of Direct Taxes (CBDT) seeking to quash a search and seizure operation carried out against her husband under the provisions of the IT Act..A warrant of authorization was issued by the Income Tax Department against the husband of the petitioner on November 5, 2014, to conduct a search at his residential premises..During the course of the search of the said premises on November 11, 2014, the authorized officer came across information which gave him reason to believe that the husband was, perhaps, in possession of money, bullion, jewellery, incriminating documents and other material in a bank locker with the Standard Chartered Bank, which would represent his undisclosed income for the purpose of the IT Act..The said bank locker was, however, in the petitioner’s name..Consequently, on November 11, 2014, the bank was restrained by an order of the court from removing or parting with or otherwise dealing with the said bank locker, in order to facilitate the search and seizure..A search was carried out on December 8, 2014 after obtaining a fresh warrant against the husband, which resulted in seizure of Rs. One lakh cash and jewellery worth over Rs. 14 lakh..CBDT, however, conceded that the recovery did not make any addition to the income of the assessee husband..Quashing this second round of search and seizure, Justice Rajiv Shakdher held that in the absence of immediacy for carrying out the search in the light of the order freezing any dealings with the bank locker, the concerned officer ought to have obtained a fresh warrant of authorization against the petitioner..Clarifying that in the present case, the husband and wife are assessees under the IT Act in their own individual right, the High Court said,.“To have a warrant of authorization issued on December 12, 2104 for the locker against the husband did not confer jurisdiction to search the locker which was occupied by/allocated to the petitioner…..especially so when the fact that the locker belonged to and was occupied by the petitioner was known to the Deputy Director Income Tax (Investigation)-I.”.The petitioner was represented by Advocate Giriraj Subramaniam and Simarpal Singh Sawhney..Senior Standing Counsel Zoheb Hossain appeared for CBDT..Read Judgement below.