K.N. Seth, J.
1. On December 22, 1974, the premises of the petitioners in Writ Petitions Nos. 417, 441, 574 and 866 of 1975 and on September 2, 1975, the premises of the petitioners in Writ Petition Nos. 920 of 1975 and 113 of 1976, were searched by the I.T. dept. and account books, cash, bank drafts, jewellery and certain documents were seized. The searches were conducted at the business premises and godowns of firms and the residence of persons connected with Haji Abdul Hameed, Mutawalli of M/s. Haji Lal Mohd. Biri Works, which is a waqf carrying on business of manufacture and sale of biris.
2. During the course of hearing, the petitioners challenged the legality of the search and seizure principally on the ground that respondent No. 1 had no material in his possession which could justify the proceeding under Section 132(1) of the I.T. Act, and in any case no reasonable person could, on the basis of the material available, form a reasonable belief that conditions necessary for directing search and seizure under Section 132(1) existed. In Writ Petitions Nos. 920 of 1975 and 113 of 1976, the legality of the order passed under Section 132(5) of the Act has been challenged on the ground that the ITO passed the orders without obtaining the previous approval of the IAC.
3. The relevant part of Section 132, as it stood at the time of the searches and seizures, was as follows :
'132. Search and seizure.--(1) Where the Director of Inspection or the Commissioner, 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 (XI of 1922), or under Sub-section (1) of Section 131 of this Act, or a notice under Sub-section (4) of Section 22 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 ofaccount 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 (XI 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 disclosed for the purposes of the Indian Income-tax Act, 1922 (XI or 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property),
he may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income-tax Officer) hereinafter referred to as the authorised officer) to--
(i) enter and search any building or place where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept ;
(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by Clause (i) where the keys thereof are not available ;
(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;
(iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom ;
(v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing.
(2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in Sub-section (1) and it shall be the duty of every such officer to comply with such requisition.
(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, 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......
(8) The books of account or other documents seized under Sub-section (1) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Commissioner for such retention is obtained.... '
4. The scope and ambit of Section 132 of the Act has been explained by the Supreme Court in ITO v. Seth Brothers : 74ITR836(SC) in the following words (p. 843) :
'The section does not confer any arbitrary authority upon the revenue officers. The Commissioner or the Director of Inspection must have, in consequence of information, reason to believe that the statutory conditions for the exercise of the power to order search exist. He must record reasons for the belief and he must issue an authorisation in favour of a designated officer to search the premises and exercise the powers set out therein. The condition for entry into and making search of any building or place is the reason to believe that any books of account or other documents which will be useful for, or relevant to, any proceeding under the Act may be found .....Since by the exercise of the power a serious invasion is made uponthe rights, privacy and freedom of the taxpayer, the power must be exercised strictly in accordance with the law and only for the purposes for which the law authorises it to be exercised. If the action of the officer issuing the authorisation or of the designated officer is challenged, the officer concerned must satisfy the court about the regularity of his action. If the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the court. If the conditions for exercise of the power are not satisfied, the proceeding is liable to be quashed. But where power is exercised bona fide, and in furtherance of the statutory duties of the tax officers any error of judgment on the part of the officers will not vitiate the exercise of the power. Where the Commissioner entertains the requisite belief and for reasons recorded by him authorises a designated officer to enter and search premises for books of account and documents relevant to or useful for any proceeding under the Act, the court in a petition by an aggrieved person cannot be asked to substitute its own opinion whether an order authorising search should have been issued. Again, any irregularity in the course of entry, search and seizure committed by the officer acting in pursuance of the authorisation will not be sufficient to vitiate the action taken provided the officer has, in executing the authorisation, acted bona fide.
The Act and the rules do not require that the warrant of authorisation should specify the particulars of documents and books of account ; a general authorisation to search for and seize documents and books ofaccount relevant to or useful for any proceeding complies with the requirements of the Act and the Rules. It is for the officer making the search to exercise his judgment and seize or not to seize any documents or books of account. An error committed by the officer in seizing documents which may ultimately be found not to be useful for or relevant to the proceeding under the Act will not by itself vitiate the search, nor will it entitle the aggrieved person to an omnibus order releasing all documents seized.'
5. It is well settled that the issue of a search warrant by the Commissioner is not a judicial or a quasi-judicial act and even if the Commissioner is enjoined to issue a warrant only when in fact there is information in his possession in consequence of which he may form the necessary belief, the matter is not thereby subject to scrutiny by the court. (See ITO v. Firm Madan Mohan Damma Mal : 70ITR293(All) . It is not necessary before effecting the search and seizure under Section 132 of the Act, that the officials of the I.T. dept. should have given to the person whose account books and documents are sought to be seized, a notice to produce whatever account books or other documents are needed and that the person should have failed to comply with such a notice. As laid down in Clause (b) of Sub-section (1) of Section 132 if the Commissioned is satisfied that the person 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 Act he is empowered to direct a search and seizure without giving to the person concerned a notice to produce the account books or other documents needed.
6. In the affidavit sworn by the Commissioner the information which led him to issue the warrants of authorisation has been set out as follows :
'(a) That Sri Abdul Hamid was the Mutawalli of Haji Lal Mohd. Biri Works Waqf, Allahabad.
(b) That Sri Abdul Hamid's brothers-in-law, Sri Anwar Ahmad and Sri Maqsood Ahmad, with respective houses (1) Roshan Bagh, opposite Gulab Badi Grave-yard, Allahabad, and (2) 175, Bahadurganj, Allahabad, hud duped Sri Abdul Hamid in collaboration with one Rahmat Ali of Mohalla Shahnoor-Aliganj in Patthar Gali, Allahabad. Details of the wealth acquired by these three persons were also given. I was informed that Rahmat Ali could be having large amounts of cash 3 to 4 lakhs and jewellery of considerable amount. Details of the situation of his house and the place where the cash and the valuables were expected to be kept were also given. I was informed that besides cash and jewellery in boxes and covers (cushions, quilts and pillows) there will also be available from two of the personal rooms of the house, incriminating documents, which would show how the group of 3 persons had manipulatedthe accounts of Haji Lal Mohammed Riri Works to divert moneys to themselves.
(c) I was further informed that Anwar Ahmad, the brother-in-lawof Abdul Hamid, is looking after the business and was in completeactual control. He had his own biri business as partner in M/s. SwadeshiBiri Works, S.C. Basu Road, Allahabad. I was told that Anwar Ahmadpays tax as partner is Swadeshi Biri Works. I was informed that theentire manufacturing work of Haji Lal Mohd. Biri Works had been takenover by the Hind Tobacco Company and the former only sold the, goodsand have very nominal manufacturing left to themselves. Manufactureis mostly through other contractors and Anwar Ahmad himself is oneof them. I was further informed that Anwar Ahmad has 9 trucks in hisown name, his wife's name and his transport manager is Rais Ahmed.The transport business had office in Roshan Bagh, opposite Gulab BadiGraveyard, and that was also the residence of Anwar Ahmad. Thebuilding had been put up about 4 years ago at a cost of about Rs. 2 lakhsin the name of his wife. A sketch of his Roshan Bagh residence was givento me. I was informed that cash and jewellery and diaries will be foundat certain specified places of which details were given to me.
(d) Maqsood Ahmad, I was informed, is another brother-in-law of Abdul Hamid. He had four trucks and an Ambassador car UPZ 1683 ; 2 petrol pumps across Jamuna at Rewa Road, Allahabad, named, New Naini Service Station and Dandi Service Station. I was informed that near Dandi Pump he had vast lands converted into Maqsood Ahmad Colony cleared by the town planner. The promoter of the colony is a Sikh from Delhi who has a local office in Dandi. The colony is to have 300 shops and over 600 flats and all plots have been sold out. Maqsood Ahmad lived in 1975-77 in Bahadurganj just close to Haji Lal Mohd. Biri Works separated only bywa galli and the house belongs to the Waqf. He stayed in the upper storey and that at specified places in the house there will be found documents and cash and jewellery about 3 to 4 lakhs rupees will also be found. I was also informed that at Dandi Petrol Pump his trusted Munim, Maqbool Ahmad, will also have documents at the petrol pump.
(e) I was also informed that Maqsood AhmaA's brother, Mahmood Ahmed, had joined him in supply of biris to Hind Tobacco Company, Haji Lal Mohd. Biri Works and the two brothers have excise licences in their names. I was informed that he also worked as Lit Light Company, sole kerosene agent for Indian Oil at Allahabad, office at Katju Road, and depot at Leader Road and that his oil tanker is also parked there.'
7. The Commissioner has asserted that he was given some further information about these persons and the information was given to him in confidence. After verifying the same and assuring himself that there wassubstance in it, he recorded the order for the issue of eleven warrants of authorization. It has further been asserted that having perused and considered the details and material he had reason to believe that the persons mentioned above were in possession of money, bullion, jewellery and other valuable articles or things which represent either wholly or partly undisclosed income or property of the person and further he had reason to believe that the person in possession of books of account and documents relevant to income-tax assessments would not produce them before the ITO in normal proceeding. The Commissioner has denied that the warrants were issued purely on his subjective satisfaction and without any rational and relevant material or without any bone fide reason or belief for the search or that they were issued indiscriminately transgressing the provisions of law. The original record of the department was also produced before us for perusal. It contains the information that was made available to the Commissioner before he issued the warrants of authorisation for search, The statement of the main informant, who had intimate knowledge of the business dealings of the petitioners, was recorded on oath. The nature of the information furnished by him could reasonably be accepted as reliable. On the material furnished by the department the contention of the petitioners that the action was mala fide or that there was no reliable information in the possession of the Commissioner to justify action under Section 132 of the Act must be rejected as untenable.
8. The rule laid down in Anand Swaroop v. CIT is of no assistance to the petitioners. In that case, the satisfaction recorded by the Commissioner showed that the object of the search was to make a probe into the reasons why the petitioner was not wealthy enough to possess jewellery or to become a wealth-tax assessee. Further, in his zeal for taking action under Section 132(1), the Commissioner had not even cared to have a look at the orders of assessment framed against the assessee by the ITO which indicated that the Commissioner did not at all apply his mind before initiating action against the petitioner. On these facts, the search of the premises of the petitioner was held to be illegal. In New Kashmir and Oriental Transport Co. (P.) Ltd. v. CIT, : 92ITR334(All) , the search and seizure of the books of account was held to be illegal as no reason was recorded by the Commissioner for taking action under Section 132 against the petitioner. The search conducted in H.L. Sibal v. CIT , was held to be illegal as the satisfaction made it obvious that the record relating to the authorisation for a search of the premises of the petitioner was prepared after the search was conducted. The record did not represent the contemporaneous thinking and activities of the Commissioner. On the same reasoning the search conducted in the case of S.C. Sibal v. CIT , was held to be illegal.The rule laid down in these cases is not attracted to the facts and circumstances of the cases in hand.
9. In Writ Petitions Nos. 920 of 1975 and 113 of 1976, the legality of the order under Section 132(5) was challenged on the ground that the impugned orders were not passed with the previous approval of the IAC. Sub-section (5) of Section 132, before its amendment by the T.L. (Amend.) Act, 1975, with effect from 1st October, 1975, provided for taking the previous approval of the Commissioner before making the order. There is no dispute that the impugned orders were passed after obtaining the previous approval of the Commissioner. It may be noted that the search in these two cases was conducted on September 2, 1975, and the seizure was also effected on that date, i.e., before the amended provision came into force, which has not been shown to be retrospective in operation. Even if it be assumed that the amended provision was applicable, the order passed by the ITO would not be rendered illegal since it was passed after obtaining the approval of the Commissioner, who was an officer superior in rank to the IAC. The act of obtaining the previous approval of the Commissioner would at best amount to an irregularity which has not caused any prejudice to the petitioners.
10. In support of the plea that the search at the premises of petitioner No. 1 in Writ Petition No. 920 of 1975 was illegal, reliance was sought to be placed on para. 5 of the counter-affidavit of Sri T.K. Chatterjee to the effect that no search was carried out on December 22, 1974, in regard to petitioner as there was no information with respondent No. 1 to take action against him. The explanation put forward by Sri Chatterjee does not appear to be correct. The record produced before us clearly indicates that there was reliable information with the department regarding petitioner No. 1 even before the first search was conducted on 22nd December, 1974. What prevailed upon the department to postpone the search at the residence of petitioner No. 1 to a later date, however, is not clear. In any view of the matter, the search would not become illegal merely because it was not done when the searches were made at the premises of the firms and the persons connected with petitioner No. 1, but was done later on. Further, these petitions appear to have become substantially infructuous as the jewellery seized in these cases has been returned to the petitioners in pursuance of the orders passed under Section 132(12) of the Act.
11. In our opinion, the petitions are devoid of any merit. They are accordingly dismissed with costs.