CA.Mohit Gupta
Quick Summary
Introduction The authority and power to conduct search and seizure operations is strident and caustic power authorized by law to be taken recourse to when the conditions mentioned under different clauses of Section 132 (1) of the Act are satisfied. The jurisdictional facts that have to be esta
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FAQ :
An income tax search and seizure action requires the authorising authority to possess credible information (not mere suspicion), have reason to believe that specific conditions under Section 132(1) of the Act are met, and this information must have a nexus to that belief.
While a person present during a search may be legally obligated to allow inspection of documents, seizing materials belonging to unconnected third parties is a controversial issue. The prevailing legal view is that such indiscriminate seizure is unlawful and contrary to legislative intent.
One argument is that clause (iib) of Section 132(1) mandates affording necessary facilities to inspect documents in electronic form, and Section 275B penalises failure to comply, suggesting that all documents found, even those of other clients on an auditor's laptop, could be seized.
Such seizures are seen as indiscriminate, potentially leading to 'fishing expeditions' against individuals with no connection to the searched party. It can violate personal liberty and privacy, and goes against the principle that seizures should be relevant to the specific assessment or person searched.
Judicial analysis suggests that authorities should only take custody of books and documents relevant to the proceedings. Seizing materials unrelated to the searched assessee, without fulfilling specific conditions, is considered beyond the scope of authorisation and potentially illegal.
Section 153C can be invoked against a 'third party' if seized documents or assets belong to them, but there must be some connection or dealing between that 'other person' and the person who was originally searched.
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