MADHUPURI CORPORATION Vs. PRABHAT JHA

JUDGEMENT

(1.) In this petition under Article 226 of the Constitution the petitioners, three in number, have challenged the authorisation issued by the Director of Income Tax (Investigation) (hereinafter referred to as "respondent no.2") on 15 concerns by common authorisation under section 132(1) of the Income -tax Act, 1961 (hereinafter referred to as "the Act") and the summons dated 13.1.2000 issued under Section 131(1A) by respondent no.1, Deputy Director of Income -tax (Investigation) at Bhavnagar as also the notices dated 10.12.1999 on petitioner no.3 and notice dated 18.1.2000 on petitioners nos.1 and 2 issued by respondent no.3, Deputy Commissioner of Income -tax (Investigation), Bhavnagar, under Section 158 (BC) of the Act. The petitioners have also prayed for an appropriate writ, order or direction to prohibit the respondents from proceeding further pursuant to the aforesaid notices and summons.

(2.) . The facts leading to filing of this petition, briefly stated and as averred by the petitioners, are as under: -

(3.) Petitioner no.1, Madhupuri Corporation, is a Hindu Undivided Family (HUF) carrying on the business as a shroff at Rameshwar Complex, Lokhand Bazar, Bhavnagar. Petitioner no.3, Mahendra Himmatlal Shah, is the Karta of the said HUF. Petitioner no.3 is also proprietor of petitioner no.2 - firm, M/s Sagar Corporation, which also has a place of business at Rameshwar Complex. A search was carried out by respondent no.1 at the office premises of petitioners nos.1 and 2 and residential premises of petitioner no.3 and also at the office premises of other 12 concerns on 7.12.1999. The panchnama was prepared and inventory was made and books and documents and computer with floppies were seized. Statement of petitioner no.3 was recorded under Section 132(4) of the Act on 8.12.1999. Resopondent no.3 issued notice u/s 158 -BC of the Act on 10.12.1999 and 18.1.2000 to petitioner no.3 and nos.1 and 2 respectively calling upon them to prepare true and correct returns for the block period 1.4.1989 to 7.12.1999. The petitioners objected to issuance of authorisation as well as search and seizure operations and issuance of notices under Section 158 -BC of the Act vide their letter dated 20.12.1999. The petitioners also submitted their detailed reply dated 20.1.2000 objecting to the summons under Section 131 (1A) as well as notices under Section 158 -BC of the Act. In this petition filed on 8.2.2000 the petitioners have challenged the aforesaid search and seizure operations pursuant to the authorisation dated 7.12.1999 as also the aforesaid summons and notices u/s 131(1A) and 158 -BC of the Act.