Bal Raj Tuli, J.
1. Shri Ramesh Chander, petitioner, is a partner of Messrs. Shiv Iron Traders, Tanda Road, Jullundur City, and Messrs. Katak Ram Ramji Dass, Tanda Road, Jullundur City. These firms carry on the business of purchase and resale of iron and steel on wholesale basis. Another common partner of the two firms is Shri Diwan Chand Aggarwal, father of Ramesh Chander, petitioner. The third partner in Messrs. Shiv Iron Traders is Roshan Lal, brother of Shri Ramesh Chander, while the third partner in Messrs. Katak Ram Ramji Dass is Shri Krishan Dass, son of Shri Ram Parkash. All the three petitioners and the partners of the two firms, petitioners Nos. 2 and 3, are assessees of the income-tax department. Neither the petitioner-firms nor their partners submitted returns of their income for the assessment years 1970-71 and 1971-72. On August 6, 1971, Ramesh Chander, petitioner, was travelling in an Ambassador car which was stopped by Balwant Singh, Traffic Inspector of Police, near Kartarpur at about 11 a.m. Balwant Singh recovered two bags from the car one of which contained currency notes of the value of Rs. 1,61,000 and the other contained a ledger book and some other documents. He took the occupants of the car along with the car and the recovered bags to the police station, Kartarpur, and got into touch with the Income-tax Officers at Jullundur and the Commissioner of Income-tax at Patiala on phone. The Commissioner of Income-tax issued warrants of authorization empowering Sarvshri Nathu Ram, P. R. Gupta and Kuldip Raj Chopra, Income-tax Officers of Jullundur, to search and seize money, bullion, jewellery or other valuable articles or things and sent them through Shri J. S. Cheema, Income-tax Officer, Special Investigation Branch, in the staff car from Patiala to Jullundur. Shri J. S. Cheema, on arrival at Jullundur at about 5-30 p.m., was told by Shri Gujjar Mal and Shri G. S. Sandhu, Income-tax Officers, that Shri Nathu Ram, Income-tax Officer, had gone to the business premises of the petitioner-firms while Shri P. R. Gupta had gone to the police station, Kartarpur. Shri J. S. Cheema took Shri Gujjar Mal with him to the business premises of the petitioner-firms where he found Shri Nathu Ram, to whom he handed over the warrant of authorization meant for him and himself proceeded to police station, Kartarpur, to hand over the warrant of authorisation to Shri P. R. Gupta which was in his name. After the receipt of the warrant of authorization, Shri P. R. Gupta seized the bags containing the money, the ledger book and other documents and prepared panchnama. He also recovered a sum of Rs. 411 from the person of Shri Ramesh Chander. The seized articles were brought to the income-tax office, Jullundur, and were deposited in the safe, the keys of which were with Shri P. R. Gupta. Thereafter, Shri Nathu Ram, Income-tax Officer, started proceedings under Section 132(5) of the Income-tax Act, 1961 (hereafter called ' the Act '), for making a summary assessment. The petitioners asked for inspection of the ledger and other documents seized from the police station, Kartarpur, and books and documents seized from their business premises and residential quarters. The Income-tax Officer refused to allow them inspection of the ledger and the documents seized from police station, Kartarpur, but allowed inspection of the books of account and other documents seized from the business premises and residential quarters of the petitioners on 6th and 8th of September, 1971. The petitioners then filed the present petition on October 19, 1971, challenging the search and seizure made by the Income-tax Officers in pursuance of the warrants of authorisation and the proceedings for making the summary assessment and prayed for the return of the money and the books of account and other documents seized from them. This petition was admitted on October 20, 1971, with the following order :
' Notice.--Further proceedings will go on and proceed to assessment but no recovery will be made in pursuance thereof till this petition is disposed of. The Income-tax Officer will allow inspection of the documents seized from the petitioners and, if required, give copies thereof.'
2. The Income-tax Officer, Shri Nathu Ram, made the assessment order on October 22, 1971, which necessitated amendment of the petition. The petition was allowed to be amended and in the amended petition, besides other reliefs already claimed, the petitioners have prayed for the quashing of the assessment order passed on October 22, 1971. Written statements have been filed on behalf of the respondents justifying the search, the seizure and the assessment order passed on October 22, 1971.
3. The learned counsel for the petitioners has vehemently argued that the issuance of warrants of authorisation for search and seizure of the money, books of account and other documents was contrary to the provisions of Section 132 of the Act, the relevant provisions of which are as under :
' 132. (1) Where the Director of Inspection or the Commissioner, in consequence of information in his possession, has reason to believe that--... (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 of 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,
(4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceedings under the Indian Income-tax Act, 1922 (XE of 1922), or under this Act.
(5) Where any money, bullion, jewellery or other valuable article or thing (hereinafter in this section and Section 132A referred to as the assets) is seized under Sub-section (1), the Income-tax Officer, after affording a reasonable opportunity to the person concerned for being heard and making such enquiry as may be prescribed, shall, within ninety days of the seizure, make an order, with the previous approval of the Commissioner,--
(i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him ;
(ii) calculating the amount of tax on the income so estimated in accordance, with the provisions of the Indian Income-tax Act, 1922 (XI of 1922), or this Act;
(iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in Clause (a) of Sub-section (I) of Section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in Clauses (ii) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized :
Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized :
Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in Clauses (ii) and (iii) or any part thereof, the Income-tax Officer may, with the previous approval of the Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case. (6) The assets retained under Sub-section (5) may be dealt with in accordance with the provisions of Section 132A...
(9) The person from whose custody any books of account or other documents are seized under Sub-section (1) may make copies thereof, or take extracts therefrom, in the presence of the authorised officer or any other person empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf.......
(11) If any person objects for any reason to an order made under subsection (5), he may, within thirty days of the date of such order, make an application to such authority, as may be notified in this behalf by the Central Government in the Official Gazette (hereinafter in this section referred to as the notified authority), stating therein the reasons for such objection and requesting for appropriate relief in the matter.
(12) On receipt of the application under Sub-section (10) the Board, or on receipt of the application under Sub-section (11) the notified authority, may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit.
(13) The provisions of the Code of Criminal Procedure, 1898 (V of 1898), relating to searches and seizure shall apply, so far as may be, to searches and seizure under Sub-section (1).
(14) The Board may make rules in relation to any search and seizure under this section ; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer-
(i) for obtaining ingress into such building or place to be searched where free ingress thereto is not available ;
(ii) lor ensuring safe custody of any books of account or other documents or assets seized.
Explanation 7.--In computing the period of ninety days for the purposes of Sub-section (5), any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.
Explanation 2.--In this section, the word ' proceeding ' means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (XI of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year. '
4. In view of these provisions, it has to be determined whether the Commissioner of Income-tax was justified in issuing the warrants of authorisation for search and seizure of the money and the documents, including the ledger book which were lying in the police station, Kartarpur. Before issuing the warrants of authorisation, the Commissioner of Income-tax dictated the following order to Shri J. S. Cheema, as has been deposed to by Shri Cheema in his statement recorded on May 16, 1972 :--
' One Shri Balwant Singh, Traffic Inspector, Police Station, Kartarpur, has given a ring to me. He has- told that the police authorities have recovered a sum of Rs. 1,61,000 from Shri Ramesh Chander, son of Shri Diwan Chand Aggarwal of Tanda Road, Jullundur. I have reasons to believe that the aforesaid money has not been disclosed for the purposes of the Indian Income-tax Act, 1922, or the Income-tax Act, 1961. I have also reasons to believe that Ramesh Chander is in possession of books of accounts and documents which will be useful for the income-tax proceedings in his case and if asked to produce them, he would not produce them.
I, therefore, authorise Shri P. R. Gupta, Shri Nathu Ram and Shri Kuldeep Raj Chopra, Income-tax Officers, to take action as per authorisation issued in this behalf under Section 132 of the Income-tax Act, 1961, read with Rule 112 of the Income-tax Rules, 1962. C.I.T. '
5. The file containing this order has been produced and after the close of the above order, the Commissioner of Income-tax jotted down in his own hand :
' I am satisfied that police station, Kartarpur, business premises and residence of the partners should be searched. Authorisation issued accordingly. '
6. The report of Shri J. S. Cheema, recorded on August 9, 1971, after his return to Patiala, reveals that he was told on his arrival at Jullundur, by Shri Gujjar Mal and Shri G. S. Sandhu, Income-tax Officers, that they had already requested the D.I.G. and the Superintendent of Police, Jullundur, to hand over the money to the income-tax department and that on their persuasion, the police authorities had agreed to hand over the money to them. The telephonic message received by the Commissioner of Income-tax, Patiala, from Shri Balwant Singh, as recorded in the order, shows that Balwant Singh had already recovered the sum of Rs. 1,61,000 from Ramesh Chander along with the books of accounts and other documents. There was thus no question of making a search for that money or the documents or for seizing them. There could be no apprehension that Ramesh Chander would in any way resist the taking of money and the documents Which had already been taken possession of by Shri Balwant Singh and were lying in the office room of the Station House Officer, Kartarpur, as has been deposed to by Shri J. S. Cheema. It is now argued on behalf of the respondents that Shri Balwant Singh had not taken possession of the money or the documents. He had only taken Shri Ramesh Chander into custody. This is unbelievable. Shri Balwant Singh handed over a memorandum at 8 p.m. on August 6, 1971, to the Station House Officer, Kartarpur, on the basis of which First Information Report was recorded in that police station. The date and hour of occurrence is mentioned as August 6, 1971, at 11 a.m. It is significant to note that Balwant Singh did not prepare this memorandum when he arrested the petitioner and detained his companions and the recovered articles at 11 a.m. although he had taken Ramesh Chander and his companions along with the two bags containing the money and the documents to the police station and lodged them in the office room of the Station House Officer. Evidently, he was waiting for some one from the income-tax office to arrive and tell him as to what should be done with the money, the ledger and the documents taken possession of by him. He had told the Commissioner of Income-tax on telephone that Rs. 1,61,000 had been recovered from Shri Ramesh Chander as that specific amount is mentioned in the order of the Commissioner of Income-tax. It cannot, therefore, be said that the money bag was still in the possession of Ramesh Chander when Shri P. R. Gupta made the search and seized the bag containing the money. Shri J. S. Cheema has stated that the bag containing the money was lying on the table while the account books and other documents were lying in a bag on the floor and Shri Ramesh Chander was sitting beside them. If Shri Balwant Singh had not taken possession of the two bags containing the money and the documents and had not arrested Shri Ramesh Chander, he could not keep him in custody along with his companions in the police station. In the First Information Report, it is recorded, on the basis of the memorandum received from Shri Balwant Singh :
' The driver of the car named Charan Singh was asked to come out of the car. Ramesh Chander was holding a bag in his hand and a bag containing currency notes was in his other hand. He was apprehended and was enquired as to what was in that bag. He told that the big bag contained currency notes oi Rs. 1,6,1,000 while the second bag contained his business papers. He could not give satisfactory reply, about these currency notes. Hence, in order to know the truth, Income-tax Officers, Jullundur and Patiala, were informed, who reached Kartarpur, and checked the papers and ledger of Ramesh Chander. The Income-tax Officers told that Ramesh Chander had no such flourishing business as he could keep such a big amount with him. Hence, the Income-tax Officer, according to the search warrants, took into his possession currency notes worth Rs. 1,61,000 and a sum of Rs. 411, which were recovered at the time of the search of the person of Ramesh Chander, after making entries. Shri P. R. Gupta, Income-tax Officer, Jullundur, who took possession of the currency notes, prepared memos with regard thereto which were signed by Hazara Singh, Lambardar, and Balwant Singh himself. Ramesh Chander did not give any satisfactory reply for keeping such a big amount in his possession. Hence he was satisfied that some offence had been committed regarding those currency notes. It appeared that Ramesh Chander was a member of a big group, and he had committed an offence punishable under Sections 411, 413 and 414 of the Indian Penal Code and Sections 4, 5 and 8 of the Foreign Exchange Regulation Act. 1947, and the Foreign Exchange Regulation (Amendment) Act, 1957-58, by keeping in his possession the stolen property with the intention of illegally distributing it amongst the relative s of the person living in England, who are residing in the illaqa oi Kartarpur.' (The memorandum and the First Information Report are in Gurmukhi and the above extract is the English rendering of the relevant portion thereof.)
7. The above extract from the First Information Report shows that Balwant Singh, after information had been received from the informer, stopped the car of Ramesh Chander and took him and his companions with the car and all the articles found therein in his custody, but found that no offence had been committed by Ramesh Chander by being iu possession of the money bag and the other bag containing his ledger book and other documents. According to his own showing, he got into touch with the Income-tax Officer, Jullundur, and the Commissioner of Income-tax, Patiala, for seeking their advice as to what should be done in the case. He was evidently informed by those authorities that he should keep Ramesh Chander along with the bags containing money and documents in his custody till warrant for search and seizure reached the police station in order to enable the Income-tax Officer, to take possession of the recovered money and documents under those warrants. It was nothing but gross abuse of his position and powers as a police officer by Shri Balwant Singh. Under Section 51 of the Code of Criminal Procedure, he had to arrest Ramesh Chander and take into possession the money and the documents and keep the same till a Magistrate, under Section 523 of the Code, ordered their disposal. It is significant to note that the First Information Report was registered at 8'05 p. m. on the basis of a memorandum submitted by Shri Balwant Singh at 8 p m, for various offences mentioned therein whereas the occurrence had taken place at 11 a.m., since when he had kept Ramesh Chander in his custody along with the two bags.
8. For a prosecution under those sections, the retention of the stolen property, that is, the sum of Rs. 1,61,000 in this case, by the police was absolutely necessary. It is curious that the First Information Report under those sections was lodged after Balwant Singh had allowed the Income-tax Officers to take away the alleged stolen property in respect of which the case was being got registered, I have no doubt that Balwant Singh acted in accordance with the advice given to him by the Commissioner of Income-tax to keep in his possession and custody Ramesh Chander, along with the bags containing the money, the ledger and other documents, so that the Income-tax Officers could take possession thereof and Balwant Singh readily agreed to oblige them, ignoring the obligations cast on him by the Code of Criminal Procedure.
9. On his own side, the Commissioner of Income-tax, having obtained the information that a sum of Rs. 1,61,000 had been recovered from Shri Ramesh Chander, decided to obtain possession thereof and for that purpose issued the warrant of authorisation for search and seizure. At that time, according to the deposition of Shri Jaswant Singh Cheema, neither the Commissioner of Income-tax nor Shri Cheema, knew anything about Shri Ramesh Chander, that is, what vocation he was following, what was his income and whether he had been assessed to income-tax or not. The mere recovery of Rs. 1,61,000 without, more cannot lead to the belief that tax has been evaded. The Commissioner of Income-tax rather acted in a hurry. He should have enquired from the concerned Income-tax Officer, Jullundur, as to the antecedents of Ramesh Chander and other particulars about him and he could then, if satisfied with the information supplied by the Income-tax Officer concerned that Ramesh Chander had evaded tax for the previous year or years, issue the warrants of authorisation. But in the absence cf any such information from the right quarters, it cannot be said that he had a genuine belief that Ramesh Chander had evaded the payment of the tax and the money recovered from him represented that income. It is nothing unusual for a businessman to have this much amount of money in his possession for the purpose of his business. There is no doubt left in my mind that the Commissioner of Income-tax issued the warrant of authorisation for search and seizure of the money and other documents solely with the purpose of obtaining possession of that amount, which possibly the police officer could not keep in his possession without registering a case for the commission of some offence against Shri Ramesh Chander. It is really curious that the said case was registered against him after the recovered money, the subject of the offence, had been allowed to be taken away by the Income-tax Officers. The provisions of Section 132 of the Act were abused in this case. A reference may usefully be made to the decision of a Division Bench (Pathak and Gulati JJ.) of the Allahabad High Court in Motilal v. Preventive Intelligence Officer. Central Excise and Customs, Agra,  80 I.T.R. 418, 422, 424 (All.) wherein the scope of the power under Section 132 of the Act was considered. Pathak J. observed as under :
' To put it more concisely, the authority to search and seize under Section 132(1) is contemplated in those cases where there is reason to believe that a person has omitted or failed to produce or cause to be produced account books or documents in spite of a summons or notice issued under the Indian Income-tax Act, 1922, or the Income-tax Act, 1961, or a person who would not, in spite of such summons or notice, produce or cause to be produced the account books or documents or a person is in possession of money, bullion, jewellery or other valuable article or thing representing either wholly or partly income or property which has not been disclosed for the purposes of either Income-tax Act. Where the authorised Officer finds that it is not practicable to seize such account books, documents, money, bullion, jewellery or other valuable article or thing, he is empowered by Sub-section (3) of Section 132 to serve an order on the owner or the person in immediate possession or control thereof prohibiting him from removing, parting with or otherwise dealing with it without the previous permission of such officer.
It is clear that the articles or things referred to in Sub-section (3) of Section 132 are those which the authorised officer was empowered to search for and seize and no other. That is plain from the language of Sub-section (3), which refers to 'such books of accounts, other documents, money, bullion, jewellery......... ', that is, those articles or things which are the subject of authorisation under Section 132(1)(c). They must be articles or things which may be necessary to search for before they can be seized. That is clear from the nature of the powers conferred upon the authorised officer under Clauses (i) to (v) contained in Section 132(1). Clause (i) empowers him to enter and search a building or place where he has reason to suspect that the article or thing is kept. Obviously, that would not include a case where it is already known that the article or thing is kept in a certain building or place and will ordinarily be yielded up by the person holding custody of such article or thing. That conclusion is reinforced when we refer to the further power conferred by Clause (ii) which enables the authorised officer to break open-the lock of any door, box, locker, safe, almirah or other receptacle when the keys thereof are not available. The power to seize, it is clear from Clause (iii), is contemplated in the case of those articles or things found as a result of such search. In my opinion, the power conferred under Section 132(1) is contemplated in relation to those cases where the precise location of the article or thing is not known to the income-tax department and, therefore, a search must be made for it, and where it will not be ordinarily yielded over by the person having possession of it and, therefore, it is necessary to seize it. If it is only such article or thing which is contemplated by Section 132(1), then it is such article or thing alone which can be the subject of an order under Section 132(3). I am unable to accept the contention on behalf of the income-tax department that Section 132(3) will include a case where the location of the article or thing is known and where ordinarily the person holding custody of it will readily deliver it up to the income-tax department. Such article or thing, I think, requires neither search nor seizure.
Upon the material before us, I am satisfied that the silver in the custody of the Assistant Collector of Customs and Central Excise was not an article or thing which could be the subject of an order under Section 132(3). The report of Shri S. S. Hitkari, the Inspecting Assistant Commissioner of Income-tax, dated September 27, 1969, refers to the search made by the customs authorities on June 5, 1969, and the seizure of the petitioners' account books and 136.935 kilograms of silver and states that the account books were lying with the Assistant Director of Revenue (Intelligence), New Delhi, and the silver was in the custody of the Assistant Collector, Central Excise, Agra. Clearly, the location of the silver was known to the income-tax department, and it cannot be disputed that as it was in the custody of a public officer, it would have been readily handed over to the income-tax department upon proper requisition made in that behalf. There is no material whatever on the record to suggest that the customs authorities would refuse to co-operate with the income-tax department and decline to comply with any reasonable request made to them. On the contrary, it would appear that the two departments were acting in cooperation. On June 5, 1969, when the customs officers effected the search and seizure of the petitioners' premises they were accompanied by an Income-tax Officer, H. G. Seymore. Could it within reason be supposed that the customs authorities would conceal the silver from the income-tax department, rendering a search necessary, and upon a reasonable request made in that behalf, refuse to deliver it up That is a question to which an affirmative answer does not seem possible.
I am firmly of opinion that the warrants of authorisation issued by the Commissioner of Income-tax could not in law include the authority to search for and seize the silver already with the Assistant Collector, Customs and Central Excise. And if, as is pointed out on behalf of the income-tax department, the Income-tax Officers proceeded, pursuant to the warrants of authorisation, to search for and seize that silver in the office of the Assistant Collector it was a meaningless gesture. The impression gained by me is that the income-tax department considered it necessary to comply with the form of the law in order to be able to make an order under Section 132(3). The form of the law was satisfied, its substance was not. I hold that the order under Section 132(3) was an order without the authority of law. It is urged on behalf of the income-tax department that the power exercised by the Commissioner of Income-tax under Section 132(1) is administrative or executive in nature and it is not open to the court, especially in writ jurisdiction, to sit in judgment over the reasonableness of the belief of the Commissioner contemplated under that provision. We are referred to Income-tax Officer, A-Ward, Agra v. Firm Madan Mohan Damma Mal, (1968) 70 I.T.R. 293 (All.) and Income-tax Officer, Meerut v. Seth Brothers,  74 I.T.R. 836 ;  1 S C.R. 601 (S.C.). It seems to me clear that this court has jurisdiction to consider whether on the material before the Commissioner of Income-tax it was at all reasonably possible to entertain the belief as to the existence of the circumstances mentioned in Section 132(1) justifying a search and seizure. If upon that material it is not possible in any view of the matter to hold such belief, the matter falls clearly within the jurisdiction of this court. But if upon the material present before the Commissioner it is possible to believe that the considerations mentioned in Section 132(1) exist and justify a search and seizure it is then not open to the court to weigh that material and arrive at a different opinion from that come to by the Commissioner of Income-tax. '
10. Gulati J., while agreeing with Pathak J., added some observations by way of elucidation which are as under :
' In order to determine the scope of Sub-section (3) of Section 132 of the Income-tax Act, 1961, it is necessary to examine the scheme underlying the provisions relating to search and seizure as contained in Section 132. Section 132 confers upon certain income-tax authorities the power of search and seizure of books of accounts and other documents as also money, bullion, jewellery and other articles (hereinafter referred to as the assets). When an action under this section is taken with regard to assets, the scheme appears to be to empower the authorised officer to seize the assets recovered as a result of the search and under Sub-section (5) to retain such assets sufficient to meet the tax liability of an assessee which the Income-tax Officer is entitled to determine summarily and to add to it the other outstanding tax liability of the assessee not only under the two Income-tax Acts of 1961 and 1922, but also under the allied Acts like the Excess Profits Tax Act, the Business Profits Tax Act, the Wealth-tax Act, the Expenditure-tax Act and the Gift-tax Act as mentioned in Section 230A. Thereafter, the Income-tax Officer proceeds to make regular assessments and by Section 132A he is empowered to appropriate the sale proceeds of the assets towards the aggregate tax liability of the assessee, in case the assessee is in default or is deemed to be in default.
Then we have another set of provisions in the Act which may also be noticed. Sections 69, 69A and 69B provide for the manner of assessment of unexplained and unaccounted for assets. These provisions are applicable in relation to assessment of such assets whether discovered as a result of search or otherwise. The other relevant provision is Sub-section (5) of Section 226, which provides :
' The Income-tax Officer may, if so authorised by the Commissioner by general, or special order, recover any arrears of tax due from an assessee by distraint and sale of his movable property in the manner laid down in the Third Schedule.' 11. Thus, apart from the provisions contained in Section 132, the Income-tax Officer is empowered under Sub-section (5) of Section 226 also to attach and sell movable property of the assessee. But that provision can be pressed into aid only after a regular assessment has been made and the assessee is in default or is deemed to be in default in respect of the tax liability due from him. Under Sub-section (5) of Section 132, the assets can be put under distraint even before the final assessments are made and even before the assessee can be said to be in default. In other words, an action under Sub-section (5) of Section 132 really amounts to attachment before judgment. This is the vital difference between an action under Section 132(5) and the one under Sub-section (5) of Section 226. The consequences that ensue upon an action under Section 132 are, indeed, drastic and extraordinary and, therefore, it becomes necessary to determine the exact scope of Section 132, so that, if a case does not squarely fall under that section, the income-tax department should not be permitted to take recourse to it. There is one more distinction which may be pointed out here. When one closely looks at Sub-section (5) of Section 132, one finds that it is confined to the assets which are seized as a result of starch under Sub-section (1) of Section 132. Sub-section (3) of Section 132 finds no mention in that provision. According to the literal interpretation of that provision, therefore, it can be said that the provisions of Sub-section (5) of Section 132, and, consequently, of Section 132A, which deal with the application of assets retained under Sub-section (5) of Section 132 do not apply to the assets in respect of which merely an order under Sub-section (3) of Section 132 has been made. Under Sub-section (3) of Section 132 the authorised officer may, where it is not practicable to seize any assets, serve an order on the owner or the person, who is in immediate possession or control of the assets, not to remove, part with or otherwise deal with them except with the previous permission of such officer. The logical conclusion of such an interpretation would be that the assets which have been attached as it were, under Sub-section (3) of Section 132, cannot be retained or appropriated towards the tax liability of the assessee in the manner provided in Section 132A of the Act. Even Subsection (5) of Section 226 also cannot be pressed into aid by the Income-tax Officer in such a case because that provision applies only if the regular assessment has been made and the assessee is in default. There is no power in the Income-tax Officer to attach assets before the assessment. It follows, therefore, that in a case where the Income-tax Officer wishes to proceed under Section 226(5), he cannot pass an order by way of attachment of the movable property before the final assessment is made and before the assessee is held to be in default. That is possible only under Sub-section (3) of Section 132. Sub-section (3) of Section 132 is a part of Section 132. An order under that provision can only be made where the case is otherwise covered by Section 132. In other words, an order of ' attachment before judgment' contemplated by Sub-section (3) of Section 132 can only be passed where Section 132(1) itself is applicable and the assets are liable to be seized as a result of a search. That is plain from the use of the word ' such ' before ' money, bullion, jewellery or other valuable article or thing' used in Sub-section (3) of Section 132. The word ' such ' refers back to Sub-clause (iii) of Clause (c) of Sub-section (1) of Section 132 which provides that the authorised officer may seize any such ......money, bullion, jewellery or other valuable article found as a result of such search '. In other words, under Section 132, the power to search and seize go together. If no search is called for, no seizure can be made, whether the seizure is actual under Sub-clause (iii) of Clause (c) of Sub-section (1) of Section 132 or by way of attachment as contemplated by Sub-section (3) of that section. An order of attachment under Sub-section (3) of Section 132 cannot, therefore, be passed without taking recourse to Section 132(1). It follows, therefore, that a search must be carried out under Section 132(1) before an order under Sub-section (3) can be passed. This explains the reason why the department issued a warrant of search of the premises of the Assistant Collector, Central Excise, Agra, in respect of the silver which had been recovered by the excise department from the assessee's possession and which was lying in the custody of the Assistant Collector, Agra. The department's anxiety obviously was to seize the silver and to utilize it towards the payment of the tax liability of the assessee and not merely to permit the excise department to retain the silver in its custody as has been alleged by the petitioner.
12. A question then arises as to whether such a search was permissible under Section 132. From a reading of that section it is obvious that Section 132 is applied only to unearth hidden books of accounts and assets. So far as the silver seized by the excise authorities was concerned, it had already come to surface. Its exact quantity and location was within the knowledge of the income-tax department as is obvious from the letter of Sri S. S. Hitkari, the Inspecting Assistant Commissioner of Income-tax, and on the basis of which the search was carried out. In that letter Sri S. S. Hitkari had clearly stated that silver weighing 136.936 kg. had been recovered from the business and residential premises of the petitioner-firm and its partners and was lying in the custody of the Assistant Collector, Central Excise, Agra, There was, therefore, no occasion for any search being organised in respect of that silver. In his letter to the Commissioner, Sri Hitkari had also stated that the assesses was not a dealer in silver and the same bad not been disclosed in its closing stock, profit and loss account or the balance-sheet filed by the assessee during the last three years. In these circumstances, it was a case which could clearly be dealt with by the Income-tax Officer under Sections 69, 69A and 69B. The assessee could have been called upon to furnish an explanation with regard to the source and nature of the investment made in silver and on his failure to give a satisfactory explanation, the income-tax department could have brought to tax the concealed income represented by the silver. Had that course been followed, the department could have proceeded for tbe recovery of the tax in the normal manner by serving a notice of demand upon the assessee and on his failure to comply with it, to initiate recovery proceedings under Section 222 or under Sub-section (5) of Section 226. But an order under Sub-section (3) of Section 132 freezing the silver, as it were, at that stage was clearly unauthorised. '
13. With very great respect, I entirely agree with the observations of both the learned judges set out above and consider them to be a correct exposition of the scope, intent and extent of the powers to be exercised by the income-tax authorities under Section 132 of the Act. I have, therefore, taken the liberty of quoting them in extenso instead of saying the same thing in my own words.
14. A learned single judge of the Calcutta High Court in Laxmipat Choraria v. K.K. Ganguli,  82 I.T.R. 306, 310 (Cal.) considered the point whether there could have been an order under Section 132 for seizing the goods of the petitioner in that case from the custody of the customs department. After setting out the various sub-sections of Section 132, the learned judge observed as under :
' The question is, at the relevant time, that is to say when the authorisation was issued, namely, 10th February, 1967, in whose possession were the moneys, goods or books in question. The expression 'possession' has not been denned in the Act. Possession is a word of ambiguous meaning and its legal sense does not always coincide with the popular sense. Reference may be made to Halsbury's Laws of England, volume 29, 3rd edition, Articles 1720-1735, pages 366 to 371. Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys. Law dictionaries and text books are unanimous that the expression is incapable of an exact definition. Without however entering into the complexities either of language or of jurisprudence and having regard to the nature of the Act, it appears to me that in this case, when physical custody of the moneys and the goods were with the customs authorities, and that by a legal sanction and authority to have that custody, it would be improper to contend that possession, as used in the context of Section 132, was still with the petitioner. It is not necessary for me to decide whether in law the petitioner had some possession or title or not. In this case and in the context of the section it appears to me that the petitioner at the relevant time did not have either physical control or physical power or authority over the said goods or the moneys. In those circumstances it cannot be said, in the context again of Section 132, that possession was with the petitioner. Mr. Sen, learned counsel for the department, contended that the immediate possession was with the customs but the legal possession, according to him, was with the petitioner. He obviously drew his inspiration from Sub-section (3) of Section 132 of the Income-tax Act, 1961, where the expression ' immediate possession' has been used ; but I do not think that the expression ' immediate possession ' in any way detracts from the meaning of possession in the popular sense as I have construed in the context of the section. I am not also unmindful of the fact that in some of the sub-sections of Section 132 the expression ' retention ' and ' custody ' have been used ; but reading these expressions in the context they have been used I do not think that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in Section 132 of the Income-tax Act, 1961, On the meaning of the expression ' possession' reference may be made to Burrows' Words & Phrases Judicial Dictionary, 4th edition, page 306. But there is another aspect which compels me to hold that in this case it could not be said that possession was with the petitioner. The expression used here for the recovery of the possession is ' seizure '. Seizure is again an expression which implies a forcible exaction or taking possession from either the owner or one who has the possession and who is unwilling to part with possession. Now in this case the custody was with the customs authority. It would be inappropriate in my opinion to accept the position that the income-tax department which is another department of the Union of India had to be armed with authority to take forcible custody from another department of the same Government or had to be armed with authority to gain custody from an unwilling person. It would be wholly inappropriate, in my opinion, in the context where one department of the Government takes the goods or the documents or the moneys from another department of the same Government to use the expression 'seizure'. Having regard to the context in which the expression 'possession' and 'seizure' have been used, I have come to the conclusion that there cannot be an order under Section 132 in respect of goods or moneys or papers which are in the custody of one department of the Government under a legal authority. In the premises the warrant of authorisation issued in this case on the 10th February, 1967, was without jurisdiction and invalid. '
15. In the present case, these observations also aptly apply if we substitute the ' police officer ' for ' customs department '. As I have already pointed out above, Balwant Singh had informed the Commissioner of Income-tax that he had recovered a sum of Rs. 1,61,000 from Ramesh Chander and it is unbelievable that thereafter that money continued to be in the possession of Ramesh Chander and not the police officer. In case the police officer had the effective control over that money and the documents which had been recovered from Ramesh Chander, there was no question of search and seizure in this case. It is also pertinent to note that the warrant of authorization, issued to Shri P. R. Gupta for making search and seizure mentioned that the Commissioner of Income-tax had reason to suspect that :
' Such books of account, other documents, money, bullion, jewellery or other valuable article or thing have been kept and are to be found at the office room of the Station Officer, Kartarpur, district Jullundur. '
16. The exact location of the money and the documents was known to the Commissioner of Income-tax and, therefore, there was no question of search and seizure in this case. It cannot be believed that the Income-tax Officer had to search for the money and the documents when they were openly lying in the office room of the Station House Officer, Kartarpur, as has been deposed to by Shri J. S. Cheema.
17. The learned counsel for the respondents has submitted that this court cannot adjudicate as to whether the Commissioner of Income-tax had reason to believe that the petitioners had evaded the payment of tax on the entertainment of which belief he was competent to issue the warrant of authorisation for search and seizure, as the issue of such a warrant by the Commissioner is not a judicial or quasi-judicial act but is an executive act. Reliance in this connection has been placed on the decision of their Lordships of the Supreme Court in Income-tax Officer, Special Investigation Circle ' B ', Meerut v. Seth Brothers, At page 843 of the report, however, the observations of their Lordships support the petitioners. These observations are as under :
' The Commissioner or the Director of Inspection may, after recording reasons, order a search of premises, if he has reason to believe that one or more of the conditions in Section 132(1) exist. The order is in the form of an authorisation in favour of a subordinate departmental officer authorising him to enter and search any building or place specified in the order, and to exercise the powers and perform the functions mentioned in Section 132(1). The officer so authorised may enter any building or place and make a search where he has reason to believe that any books of account or other documents which in his opinion will be useful for, or relevant to, any proceedings under the Act, may be found. The officer making a search may seize any books of account or other documents and place marks of identification on any such books of account or other documents, make or cause to be made extracts or copies therefrom and may make an inventory of any articles or things found in the course of any search which in his opinion will be useful for, or relevant to, any proceeding under the Act, and remove them to the income-tax office or prohibit the person in possession from removing them. He may also examine on oath any person in possession of or control of any books of account or documents or assets.
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. If the officer has reason to believe that any books of account or other documents would be useful for, or relevant to, any proceedings under the Act, he is authorised by law to seize those books of account or other documents, and to place marks of identification thereon, to make extracts or copies therefrom and also to make a note or an inventory of any articles or other things found in the course of the search. Since by the exercise of the power a serious invasion is made upon the 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 authorizes it to be exercised. If the action of the officer issuing the authorization 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.'
18. According to these observations, the Commissioner of Income-tax had to record reasons before issuing the warrant of authorisation which he purported to do. All that he stated was that Balwant Singh had informed him that a sum of Rs. 1,61,000 had been recovered from Ramesh Chander. No other reason has been stated and words of Sub-section (3) of Section 132 have been reproduced. No decision has been brought to my notice contrary to the decisions of the Allahabad and Calcutta High Courts referred to above, to the effect that if the money or the documents are known to be at a place in the custody of another department of the Government, the warrant for search and seizure can be issued. I, therefore, hold that in this case, the Commissioner of Income-tax had no jurisdiction to issue the warrant of authorisation for search and seizure of the money and the documents which had been recovered from Ramesh Chander, petitioner, by Balwant Singh, Traffic Inspector, and which were lying in the office room of the Station House Officer, Kartarpur. The proceedings for search and seizure were wholly illegal and void as the sole object of issuing the warrants of authorisation was to somehow obtain possession of the sum of Rs. 1,61,000 and the documents already recovered from Ramesh Chander by Balwant Singh without there being any basis for the belief that he had evaded the payment of tax under the Indian Income-tax Act, 1922, or the Income-tax Act, 1961, or any other allied Act.
19. The petitioners have not challenged the search and seizure made at the residence of the partners of the petitioner-firms, but have challenged the search and seizure made at their business premises on the ground that Shri Nathu Ram, Income-tax Officer, started making search at 4 p. m. on August 6, 1971, when he was not in possession of the search warrant. This fact is denied by the respondent, and, therefore, I am not inclined to hold that the search for and seizure of the account books and other documents from the business premises of the petitioner-firms were without authority as alleged.
20. The learned counsel for the petitioners has submitted that petitioner No. 1 was not allowed to inspect the ledger book allegedly seized from his possession in the office room of the Station House Officer, Kartarpur, before the impugned order under Section 132(5) of the Act was passed against him. He had the right to inspect, make copies and take extracts therefrom under Sub-section (9) of Section 132 of the Act. In paragraph 23 of the petition, it has been stated :
' That on September 6, 1971, the Income-tax Officer allowed partial inspection of the books of account seized from the business premises at Jullundur and directed the petitioner to come on September 8, 1971, for further inspection, on which date the Income-tax Officer did not permit the petitioner and his counsel to make copies and to have extracts from the books of account and documents seized at Kartarpur. An application for permission of the same was presented to the Income-tax Officer on the same date, but no orders were passed on the said application and the proceedings under Section 132(5) were adjournedto September 6, 1971, and from September 6, 1971, to September 8, 1971, and then to September 10, 1971, '
21. In reply to this allegation, it has been stated in the return filed by the respondents as under :--
'That para. 23 of the petition is admitted in so far as inspection was allowed to the petitioner on 6th September, 1971, and 611 8th September, 1971. The manner in which the inspection was being asked for gave respondent No. 3 the impression that the petitioners were trying to prolong the proceedings under Section 132(5) of the Income-tax Act. Under the law, these proceedings have to be completed within 90 days after getting the approval of respondent No. 1 on the basis of the material collected by respondent No. 3.
On petitioner's own case the sum of Rs. 1,61,000 did not belong to the petitioner's firms but it was part of the amount of Rs. 1,73,000 entrusted to petitioner No. 1 by various Delhi parties for purchase of their goods. Thus, the petitioners did not need any inspection of the seized material for a proper explanation of the money. There was hardly any point in making full extracts from these books and documents except to delay the pending proceedings. Therefore, respondent No. 3 was justified in not acceding to the request of the petitioners,'
22. The order of assessment made on October 22, 1971, shows that the ledger book containing 251 pages, allegedly seized from Ramesh Chander in the office room of the Station House Officer, Kartarpur, was utilised for the. purpose of assessment. From that book, the names of 10 debtors and three creditors were noted in the order. The amount due from the debtors is shown as Rs. 6,41,679 while the amount due to the creditors is shown as Rs. 17,489. The Motion Bench, while admitting the civil writ, had directed that the petitioner should be allowed inspection of the documents. That order was passed on October 21, 1971, but instead of allowing them inspection the Income-tax Officer passed the order of assessment on October 22, 1971, under Section 132(5) of the Act. Before making the order of assessment, petitioner No. 1 had to be afforded a reasonable opportunity of being heard and under Sub-section (9) he was entitled to make copies from any book or other documents seized under Sub-section (1) or to take extracts therefrom in the presence of the authorised Officer or any other person empowered by the Commissioner of Income-tax in this behalf. The authorised officer has no jurisdiction to refuse the inspection or the making of copies or taking of extracts from the books of account or other documents to the person from whom they are seized and against whom the assessment order is to be passed under Section 132(5). Since petitioner No. 1 was denied his statutory right of inspection and making copies or taking extracts from the ledger book, the assessment order under Section 132(5) passed against him cannot be sustained, particularly because the material contained in the ledger book allegedly seized from him at Kartarpur was made the basis of that order. It is also worthy of note that although only a sum of Rs. 1,61,411 was seized from Ramesh Chander, assessment has been made against him in respect of an undisclosed income of Rs. 8,53,190 and the amount of income-tax determined is Rs. 7,55,932. The assessee-peti-tioner has, therefore, been greatly prejudiced in presenting his case to respondent No. 3. The order of assessment is, thus, liable to be quashed on the ground that the provisions of Sub-sections (5) and (9) of Section 132 of the Act and the principles of natural justice were violated and given a go-bye in quasi-judicial proceedings. The order of assessment is also liable to be quashed on the ground that the issuance of the warrant of authorisation for search and seizure of the money and the documents from Ramesh Chander in the office room of the Station House Officer, Kartarpur, was illegal and void as held in an earlier part of the judgment.
23. For the reasons given above, I accept this petition with costs and quash the order of assessment made by Shri Nathu Ram, Income-tax Officer, respondent No. 3, on October 22, 1971, a copy of which is annexure ' M ' to the writ petition. The respondents are directed to return the amount of Rs. 1,61,411 to Shri Ramesh Chander along with the ledger book and other documents allowed to have been seized from him at Kartarpur.The other books of account and documents seized from the business premises and residences of the partners of the petitioner-firms may be returnedto them in accordance with the provisions of the Act if not alreadyreturned. Counsel's fee Rs. 300.