• Search and seizure – Prohibitory order under Section 132(3) When amount to seizure–Where seizure of a thing is not practicable owing to the volume, weight or other physical characterstics or due to its being of dangerous nature, the authorised officer may issue a restraint order to the owner or possessor of thing and in such a case, as per proviso to Section 132(1), the order would operate as seizure. Where, however, a restraint order is issued under Section 132(3) for reasons other than those mentioned above, the order, as clarified by the Explanation to Section 132(3), would not operate as seizure. Therefore, the restraint order with regard to cash box in almirah found in the premises of the assessee where jewellery was placed was one which was passed under Section 132(3), it follows that the restraint order did not amount to seizure of jewellery or the cash box or the almirah.
8. The search commenced on 17.11.2000 at 8 a.m. The proceedings were closed on 17.11.2000 at 7 p.m. as temporarily concluded for the day to be commenced subsequently for which purpose seals were placed on Cash Box of the right hand side Almirah on the ground floor bed room of Sh. S.K. Katyal at E-147, Kalkajee, N. Delhi, seven seals in our presence.9. An order under Section 132(3) of the I.T. Act, 1961 in respect of the sealed premises/lockers/bank A/c any other (specify) As above was served on Shri/Smt S.K. Katyal by the said authorized officer.
Dated 3rd Jan. 2001Revocation OrderRestraint order Under Section 132(3) of I.Tax Act, 1961 dated 17.11.2000 in respect of Cash Box of Right hand Side Almirah in the Bed Room of Sh. S.K. Katyal at GF of premises E-147 Kalkajee New Delhi is hereby revoked. The seals placed on the Almirah on the date of search were found to be intact.(emphasis supplied)
Jewellery worth Rs. 6,05,731/- as per page 1 of Annexure-5 of Panchnama dated 17-11-2000.
8. The search commenced on 3/1/2001 at 5:05 p.m. The proceedings were closed on 3/1/2001 at 5:45 p.m. as finally concluded in our presence.9. An order under Section 132(3) of the I.T. Act, 1961 in respect of the sealed premises/lockers/ bank A/c any other (specify) was served on Shri/Smt by the said authorized officer.
158BE. Time limit for completion of block assessment.- (1) The order under Section 158BC shall be passed,-(a) xxxx xxxx xxxx xxxx(b) within two years from the end of the month in which the last of the authorisations for search under Section 132 or for requisition under Section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997.xxxx xxxx xxxx xxxxExplanation 2.- For the removal of doubts, it is hereby declared that the authorisation referred to in Sub-section (1) shall be deemed to have been executed,-(a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued;(b) xxxx xxxx xxxx xxxx
132. Search and seizure.- (1) Where the Director General or Director or the Chief Commissioner Commissioner or any such Joint Director or Joint Commissioner as may be empowered in this behalf by the Board, in consequence of information in his possession, has reason to believe that-(a) any person to whom a summons under Sub-section (1) of Section 37 of the Indian Income Tax Act, 1922 (11 of l922), or under Sub-section (1) of Section 131 of this Act, or a notice under Sub-section (4) of Section 32 of the Indian Income Tax Act, 1922, or under Sub-section (1) of Section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required by such summons or notice, or(b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act, or(c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income Tax Act, 1922 (11 of 1922), or this Act (hereinafter in this Section referred to as the undisclosed income or property), then,-(A) the Director General or Director or the Cheif Commissioner or Commissioner, as the case may be, may authorise any Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income Tax Officer, or(B) such Joint Director or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income Tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept;xxxx xxxx xxxx xxxx(iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search;xxxx xxxx xxxx xxxx(v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing:xxxx xxxx xxxx xxxxProvided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under Clause (iii).xxxx xxxx xxxx xxxx(3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to Sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.Explanation. – For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this Sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under Clause (iii) of Sub-section (1).xxxx xxxx xxxx xxxx(8A) An order under Sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order, except where the authorised officer, for reasons to be recorded by him in writing, extends the period of operation of the order beyond sixty days, after obtaining the approval of the Director or, as the case me, Commissioner for such extension:Provided that the Director or, as the case may be, Commissioner shall not approve the extension of the period for any period beyond the expiry of thirty days after the completion of all the proceedings under this Act in respect of the years for which the books of account, other documents, money, bullion, jewellery or other valuable articles or things are relevant.(13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under Sub-section (1) or Sub-section (A).xxxx xxxx xxxx xxxx
100. Persons in charge of closed place to allow search.-xxxx xxxx xxxx xxxx xxxx(4) Before making a search under this Chapter, the officer or other person about to make it shall call upon two or more independent and respectable inhabitants of the locality in which the place to be searched is situateor of any other locality if no such inhabitant of the said locality is available or is willing to be a witness to the search, to attend and witness the search and may issue an order in writing to them or any of them so to do.(5) The search shall be made in their presence, and a list of all things seized in the course of such search and of the places in which they are respectively found shall be prepared by such officer or other person and signed by such witnesses; but no person witnessing a search under this Section shall be required to attend the Court as a witness of the search unless specially summoned by it.(6) The occupant of the place searched, or some person in his behalf, shall, in every instance, be permitted to attend during the search, and a copy of the list prepared under this section, signed by the said witnesses, shall be delivered to such occupant or person.(7) When any person is searched under Sub-section (3), a list of all things taken possession of shall be prepared, and a copy thereof shall be delivered to such person.(8) Any person who, without reasonable cause, refuses or neglects to attend and witness a search under this section, when called upon to do so by an order in writing delivered or tendered to him, shall be deemed to have committed an offence under Section 187 of the Indian Penal Code (45 of 1860).(emphasis supplied)
112. (1) The powers of search and seizure under Section 132 shall be exercised in accordance with Sub-rules (2) to (14).xxxx xxxx xxxx xxxx xxxx(6) Before making a search, the authorised officer shall,-(a) where a building or place is to be searched, call upon two or more respectable inhabitants of the locality in which the building or place to be searched is situate, and(b) where a vessel, vehicle or aircraft is to be searched, call upon any two or more respectable persons to attend and witness the search and may issue an order in writing to them or any of them so to do.(7) The search shall be made in the presence of the witnesses aforesaid and a list of all things seized in the course of such search and of the places in which they were respectively found shall be prepared by the authorised officer and signed by such witnesses; but no person witnessing a search shall be required to attend as a witness of the search in any proceedings under the Indian Income Tax Act, 1922 (11 of 1922), or the Act unless specially summoned.(8) The occupant of the building, place, vessel, vehicle or aircraft searched, including the person in charge of such vessel, vehicle or aircraft, or some person on his behalf, shall be permitted to attend during the search and a copy of the list prepared under Sub-rule (7) shall be delivered to such occupant or person. A copy thereof shall be forwarded to the Chief Commissioner or Commissioner and, where the authorisation has been issued by any officer other than the Chief Commissioner or Commissioner, also to that officer.xxxx xxxx xxxx xxxx(emphasis supplied)
The term ‘search’ as applied to searches and seizures, is an examination of a man’s house or other buildings or premises, or of his person, with a view to the discovery of contraband or illicit or stolen property, or some evidence of guilt to be used in the prosecution of a criminal action for some crime or offence with which he is charged. As used in this connection, the term implies some exploratory investigation, or an invasion and quest, a looking for or seeking out. The quest may be secret, intrusive, or accomplished by force, and it has been held that a search implies some sort of force, either actual or constructive, much or little. A search implies a prying into hidden places for that which is concealed and that the object searched for has been hidden or intentionally put out of the way. While it has been said that ordinarily searching is a function of sight, it is generally held that mere looking at that which is open to view is not a ‘search’.(emphasis supplied)
All searches are inspections, but all inspections are not searches. A search is a thorough inspection of a man’s house, building or premises or of his person, with the object of discovering some material which would furnish evidence of guilt for some offence with which he is charged. It implies a prying into hidden places for that which is concealed. If the object sought for is always in plain sight, then there is no search.
The second undisputed fact is that the search was discontinued on October 27, 1995, and resumed only on November 10, 1995. The reasons stated for the gap of 14 days is hardly convincing. There is no provision in the Criminal Procedure Code or in the Income Tax Act or the rules for postponing the search for such a long period. N. Subramanian in his book Search and Seizure stated at page 108 that when once the search starts it can go on continuously day or night, rain or shine. To keep the affected parties in a suspended animation about the probable continuation of search would be agonising. In this case considering the nature of the allegations and the materials seized there is no reason why it could not be closed on October 27, 1995, and even if it is provisionally concluded why it could not be continued immediately. There is no bar for the operation to continue on holidays. The absence of the petitioners in the house is nothing but a lame excuse. If the respondents wanted the operation to be continued there are ways to secure the presence of the petitioners and continue the operations.Therefore, unless there is convincing reason for not resuming search immediately the proceedings undertaken by the second respondent for a second search cannot be held to be legal. It is invading the right and freedom of the petitioners for a period more than required or necessary. The averment that the petitioners were not available for two days is denied by them. Instead it is stated that they could not keep the house in order as the search was incomplete and that they had telephoned and required the officers to complete the search. Therefore, search has prolonged unreasonably without justification.(emphasis supplied)
A general consensus appears to have emerged among the High Courts to the effect that a search under Section 132 of the Act should be continuous and if it is discontinued and thereafter resumed, then there must be a valid explanation for the gap. In so far as the present case is concerned, the facts on record show that prima facie there was absolutely no justification for keeping the search pending for more than one year and ten months without any semblance of any activity by the Revenue.
This being the position, it cannot be said that the last panchnama drawn up in respect of the search and seizure operation pertaining to the assessee, in terms of Explanation 2 to Section 158BE of the Act, was drawn up on September 14, 1998 – it was actually drawn on November 6, 1996 – and the period of limitation must, therefore, run from that date onwards.
From a plain reading of Explanation 2(a), it is evident that an authorisation referred to in Sub-section (1) is deemed to have been executed on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued. What is noteworthy is that the time-limit for the making of an order under Section 158BC read with Section 158BE(1) will start from the last of the panchnamas.
If that be so, the search would end only upon revocation of the order passed under Section 132(3) which, in the instant case, was revoked only on June 29, 2000.
In the instant case, the authorisation was issued on February 2, 2000. The search also started on the same date and continued till June 29, 2000, during which period various articles and documents were seized. The Tribunal has recorded a finding to the effect that there was no delay in executing the search inasmuch as various lockers and steel almirah and cupboard were required to be searched. There was, therefore, no artificial extension of the search proceedings as argued by the appellants. If that be so, the search would end only upon revocation of the order passed under Section 132(3) which, in the instant case, was revoked only on June 29, 2000. The period of limitation for making an assessment order under Section 158BC read with Section 158BE of the Act would, therefore, have to be reckoned from June 30, 2000 (being the end of the month in which the last panchnama was drawn) and would end on June 30, 2002. The assessment order, in the instant case, was however made on June 27, 2002, which was well within the outer limit of two years prescribed by law. The Tribunal was, in that view, justified in repelling the contention of the assessee that the order of assessment was beyond the period of limitation prescribed for the same.(emphasis supplied)
Consequently, we are of the opinion that the respondents did not complete the search on June 22, 1998, as alleged by the petitioners, nor did they unduly prolong it. The search concluded on August 5, 1998, and so in terms of Explanation 2 to Section 158BE of the Act the period of limitation would begin from the end of August, 1998, that is, August 31, 1998 onwards.(emphasis supplied)