Search and seizure operation cannot be a fishing expedition
under the law.
Before search is authorised the Director Investigation (DI) must on the relevant material have reason to believe that the assessee has not or would not have disclosed his income. S. 131 (1A) is therefore meant for such purpose to enable making of enquiry or investigation on mere suspicion post which the officer can draft a satisfaction note which form the basis for issue of warrant of authorization.
Doctors are often found to be suppressing their incomes. In a case of an AIIMS MD pass out viz. Dr. Roop & Others v. CIT (2012) 79DTR56 who practiced eye surgery in Meerut along with his spouse filed his taxes in the last fifteen years at uniform meagre figures ranging in few thousand rupees for different entities.
In this case initial material was collected by the department for which preparations for search were made in 2002 but actually did not so happen. The successor Additional Director made on the spot verification in this case in 2005 when he paid few visits to the clinic along with decoy patients and on further enquiry collected information on number of patients registered for consultation and various procedures viz. Daily patient no, daily procedures etc based on which he worked out annual consultation and procedure income of more than Rs. 2-2.5 crores. This lead to search which came under challenge before the Allahabad High Court on the proposition that the department had no reliable or sufficient information to proceed with the authorization for search. The High Court held that the DI had credible and reliable evidence to proceed with search action. Not to mention that the Court cannot examine adequacy or sufficiency of such information.
In another case of Doctors X-ray and Pathology Institute P. Ltd. v. Director of Investigation (2009) 318ITR125 based on secret information in writing received by ADIT and on personal verification made by him by visiting the spot, a detailed note was made which successfully got transmitted in search action and also received acceptance of Allahabad High Court.
Before search is authorised the Director Investigation (DI) must on the relevant material have reason to believe that the assessee has not or would not have disclosed his income. S. 131 (1A) is therefore meant for such purpose to enable making of enquiry or investigation on mere suspicion post which the officer can draft a satisfaction note which form the basis for issue of warrant of authorization.
Doctors are often found to be suppressing their incomes. In a case of an AIIMS MD pass out viz. Dr. Roop & Others v. CIT (2012) 79DTR56 who practiced eye surgery in Meerut along with his spouse filed his taxes in the last fifteen years at uniform meagre figures ranging in few thousand rupees for different entities.
In this case initial material was collected by the department for which preparations for search were made in 2002 but actually did not so happen. The successor Additional Director made on the spot verification in this case in 2005 when he paid few visits to the clinic along with decoy patients and on further enquiry collected information on number of patients registered for consultation and various procedures viz. Daily patient no, daily procedures etc based on which he worked out annual consultation and procedure income of more than Rs. 2-2.5 crores. This lead to search which came under challenge before the Allahabad High Court on the proposition that the department had no reliable or sufficient information to proceed with the authorization for search. The High Court held that the DI had credible and reliable evidence to proceed with search action. Not to mention that the Court cannot examine adequacy or sufficiency of such information.
In another case of Doctors X-ray and Pathology Institute P. Ltd. v. Director of Investigation (2009) 318ITR125 based on secret information in writing received by ADIT and on personal verification made by him by visiting the spot, a detailed note was made which successfully got transmitted in search action and also received acceptance of Allahabad High Court.
1 comment:
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