Doctors Xray and Pathology Institute P. Ltd. v. Dy. of Invest. and Ors

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The Tax Publishers2009 TaxPub(DT) 2015 (All-HC) : (2010) 031 (I) ITCL 0041 : (2009) 318 ITR 0125 : (2009) 227 CTR 0546 : (2010) 186 TAXMAN 0480 : (2009) 032 DTR 0016 Doctors X-Ray & Pathology Institute (P) Ltd. & Ors. v. Director of Investigation & Ors. INCOME TAX ACT, 1961 Search and seizure - Search under section 132 -Reason to believe Assessee was working in field of medical diagnostics. Search under section 132 was conducted upon assessee and its directors. Meanwhile, Deputy Commissioner issued notices for block assessment to assessee under section 158BC. Assessee filed writ petition challenging the validity of search proceedings and consequential block assessment notices on the ground that no material was existed on record before authorizing the search. Revenue contended that it had information that the assessee was not making entry in the books for important tests for which substantial charges were being received by it. *Held:* In pursuant of original record produced, its stated that there was relevant material before department to form the requisite opinion, having reason to believe that there had been unaccounted money/assets with the assessee. It could not be said that there was no material to initiate proceeding under section 132. At the stage of authorization for search and seizure under section 132, the consideration paid to whether there was some relevant materials so as to initiate warrant proceeding under section 132 and, consequently, notices issued under section 158BC were valid and, therefore, initiation of proceedings under section 132 was in accordance with law. Income-tax Act, 1961, Section 132 A.Y.: Block period ending on 14-9-2002 Decision: In favour of revenue Case Law Analysis:CIT v. A. Rahman & Co. [1968] 67 ITR 11 (SC) [Para 19]; Ganga Prasad Maheshwari v. CIT [1983] 139 ITR 1043/[1981] 6 Taxman 363 (All.); Smt. Kavita Agarwal v. Director of Income-tax [2003] 133 Taxman 848 (All.); CIT v. Vindhya Metal Corpn. [1997] 224 ITR 614/ 91 Taxman 192 (SC); Ajit Jain v. Union of India [2000] 242 ITR 302/[2001] 117 Taxman 295 (Delhi); Union of India v. Ajit Jain [2003] 260 ITR 80/ 129 Taxman 74 (SC); Gyanendra Prakash Gupta v. Union of India [2008] UPTC 673 (All.) and Manish Maheshwari v. Asstt. CIT [2007] 159 Taxman 258 (SC) [Para 20] distinguished. Doctors X-Ray & Pathology Institute (P) Ltd. & Ors. v. Director of Investigation & Ors. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2009 TaxPub(DT) 2015 (All-HC) : (2010) 031 (I) ITCL 0041 : (2009) 318 ITR 0125 : (2009) 227 CTR 0546 : (2010) 186 TAXMAN 0480 : (2009) 032 DTR 0016

Doctors X-Ray & Pathology Institute (P) Ltd. & Ors. v. Director of Investigation & Ors.

INCOME TAX ACT, 1961

Search and seizure - Search under section 132 -Reason to believe

Assessee was working in field of medical diagnostics. Search under section 132 was conducted upon assessee and its directors. Meanwhile, Deputy Commissioner issued notices for block assessment to assessee under section 158BC. Assessee filed writ petition challenging the validity of search proceedings and consequential block assessment notices on the ground that no material was existed on record before authorizing the search. Revenue contended that it had information that the assessee was not making entry in the books for important tests for which substantial charges were being received by it. Held: In pursuant of original record produced, its stated that there was relevant material before department to form the requisite opinion, having reason to believe that there had been unaccounted money/assets with the assessee. It could not be said that there was no material to initiate proceeding under section 132. At the stage of authorization for search and seizure under section 132, the consideration paid to whether there was some relevant materials so as to initiate warrant proceeding under section 132 and, consequently, notices issued under section 158BC were valid and, therefore, initiation of proceedings under section 132 was in accordance with law.

Income-tax Act, 1961, Section 132

A.Y.: Block period ending on 14-9-2002
Decision: In favour of revenue

Case Law Analysis:CIT v. A. Rahman & Co. [1968] 67 ITR 11 (SC) [Para 19]; Ganga Prasad Maheshwari v. CIT [1983] 139 ITR 1043/[1981] 6 Taxman 363 (All.); Smt. Kavita Agarwal v. Director of Income-tax [2003] 133 Taxman 848 (All.); CIT v. Vindhya Metal Corpn. [1997] 224 ITR 614/ 91 Taxman 192 (SC); Ajit Jain v. Union of India [2000] 242 ITR 302/[2001] 117 Taxman 295 (Delhi); Union of India v. Ajit Jain [2003] 260 ITR 80/ 129 Taxman 74 (SC); Gyanendra Prakash Gupta v. Union of India [2008] UPTC 673 (All.) and Manish Maheshwari v. Asstt. CIT [2007] 159 Taxman 258 (SC) [Para 20] distinguished.

Doctors X-Ray & Pathology Institute (P) Ltd. & Ors. v. Director of Investigation & Ors.