FINANCE BILL, 2017 No Need to Disclose Reason to Believe for Conducting SearchClarification Via Finance Bill, 2017

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The Tax Publishers FINANCE BILL, 2017 No Need to Disclose Reason to Believe for Conducting Search--Clarification Via Finance Bill, 2017 Vinod Shankar The Finance Bill, 2017 proposes certain clarificatory amendments in Sections 132 and 132A with a view to maintain secrecy and confidentiality in the matter of search and requisition. The present write-up analyses. 1. Reason to believe, one of the conditions precedent for authorisation of search A perusal of Section 132(1) shows that the competent authority is empowered to conduct search only if he has information in its possession and on the basis of such information, it must have reasons to believe that the conditions as stipulated in sub-clauses (a), (b) and (c) of Section 132(1) exist. The words reason to believe indicates that there are grounds for necessary belief. The said belief is the assent of mind to the truth of what has been conveyed by the information. It is the belief of Commissioner or the Director of Inspection, that is material and the court cannot substitute their own opinion for belief of these authorities. It is only when the grounds on which such belief of Commissioner or Director of Inspection are found to be non-existent or irrelevant, then the issue of warrant of authorisation will be considered as bad or mala fide in law by courts. The sufficiency of grounds cannot be looked into by the courts.Vide Om Prakash Jindal & Anr. v. Union of India & Ors. (1976) 104 ITR 389 (P&H). SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

FINANCE BILL, 2017

No Need to Disclose Reason to Believe for Conducting Search--Clarification Via Finance Bill, 2017

Vinod Shankar

The Finance Bill, 2017 proposes certain clarificatory amendments in Sections 132 and 132A with a view to maintain secrecy and confidentiality in the matter of search and requisition. The present write-up analyses.

1. Reason to believe, one of the conditions precedent for authorisation of search

A perusal of Section 132(1) shows that the competent authority is empowered to conduct search only if he has information in its possession and on the basis of such information, it must have reasons to believe that the conditions as stipulated in sub-clauses (a), (b) and (c) of Section 132(1) exist.

The words reason to believe indicates that there are grounds for necessary belief. The said belief is the assent of mind to the truth of what has been conveyed by the information. It is the belief of Commissioner or the Director of Inspection, that is material and the court cannot substitute their own opinion for belief of these authorities. It is only when the grounds on which such belief of Commissioner or Director of Inspection are found to be non-existent or irrelevant, then the issue of warrant of authorisation will be considered as bad or mala fide in law by courts. The sufficiency of grounds cannot be looked into by the courts.Vide Om Prakash Jindal & Anr. v. Union of India & Ors. (1976) 104 ITR 389 (P&H).