POORAN MAL SHRI HANUMAN PERSHAD GANERWALA JAGAT RAM MAGO RAMJI DAS SHARMA Vs. DIRECTOR OF INSPECTION INVESTIGA TION NEW DELHI:DIRECTOR OF INSPECTION NEW DELHI:SHRI R N LIMAYA:SHRI R N LIMAYA

JUDGEMENT

(1.) In these proceedings - two of them Writ Petitions under Article 32 of the Constitution and two others which are appeals from orders passed by the Delhi High Court under Article - 226 - relief is claimed in respect of action taken under Section 132 of the Income-tax Act, 1961 (hereinafter called the Act) by way of search and seizure of certain premises on the ground that the authorisation for the search as also the search and seizure were illegal. The challenge was based on constitutional and non-constitutional grounds. For the appreciation of the constitutional grounds it is not necessary to give here the detailed facts of the four cases. It is sufficient to state that in all theses cases articles consisting of account books and documents and in the Writ Petitions, also cash, jewellery and other valuables, were seized by the Income-tax authorities purporting to act under the authorisation for search and seizure issued under Section 132 read of the Act. Broadly speaking the constitutional challenge is directed against sub-sections (1) and (5) of Section 132 of the Act and incidentally also against rule 112A on the ground that these provisions are violative of the fundamental rights guaranteed by Articles 14, 19 (1) (f) (g) and 31 of the Constitution. The non-constitutional grounds challenge are based upon allegations to the effect that the search and seizure were not in accordance with Section 132 with Rule 112. This challenge will have to be considered in the background of the facts of the individual cases.

(2.) Chapter XIII of the Act deals with Income-tax authorities, their powers and jurisdictions. The hierarchy of authorities as given in Section 116 shows that the class of authorities designated as Director of Inspection is shown below the Central Board of Direct Taxes and above the class of authorities known as Commissioner of Income-tax. The other authorities mentioned are Assistant Commissioners of Income-tax, Income-tax Officers, and Inspectors of Income-tax, Section 117 shows by whom these various authorities are to be appointed. Section 118 deals with subordination and control. Section 119 deals with the powers of the higher authorities to give instructions and directions to subordinate authorities. Under S. 120 Directors of Inspection have to perform such functions of any other Income-tax authority as may be assigned to them by the Board. The Board, it is clear, might assign to the Director Inspection the functions of any other under the Act.

(3.) We may then turn to part 'C' of this Chapter which deals with the powers. Section 131 says that the authorities from the Commissioner down to the Income-tax Officer shall have the same powers as are vested in a court under the Code of Civil Procedure in respect of several matters including the enforcing of attendance of any person or compelling the production of books of account and other documents. Section 132 provides for search and seizure. It appears that under S. 37 (2) of the Income-tax Act, 1922 a limited power of search and seizure had been first given to the Income-tax authorities in 1956. The present Income-tax Act initially gave that power under Section 132 on the same lines as the old Section 37 (2). But there were further amendments in Section 132 in 1964 and 1965. Under the amendment of 1965, two sections namely Ss. 132 and 132A were substituted for the original S. 132. We are concerned with these sections and it will be therefore, necessary in the first instance to reproduce the same: