JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge in this appeal is to the order passed by a Division Bench of the Delhi High Court dismissing the writ petitions filed by the appellants.

3. Background facts in a nutshell are as follows:

A search and seizure was conducted by the respondents in the premises of the appellants pursuant to warrants of authorization dated 3.8.2005. On 4.8.2005 certain assets including jewellery, cash and fixed deposit receipts were seized. On that very day, appellants received a letter from the HDFC Bank at B-28, Community Centre, Janakpuri, New Delhi that operation of five bank accounts of appellant No.1 had been restrained by order issued under Section 132 (3) of the Income Tax Act, 1961 (in short the Act ). The Bank issued a similar letter to appellant No.3 intimating that the said appellant had been restrained from operating her Savings Bank account by order dated 3.8.2005 passed under Section 132(3) of the Act. Appellant s stand was that existence of the lockers and the bank accounts were disclosed by the appellants in the regular books of account maintained and no opportunity was provided to establish the said fact. It was further submitted that the computers which contained the details of the bank accounts were available at the business premises at Janakpuri and no opportunity was allowed to the appellants to place these before the authorities.

Grievance is made that apart from the non grant of opportunity no effort whatsoever was made to ascertain whether the accounts had been disclosed in the regular books of account maintained by the appellants. On 8.8.2005 appellant addressed a letter to the Additional Director of Income Tax stating inter alia that all bank accounts under restraint have been disclosed in the regular books of account and also that the restraint order was hampering the day to day operations of the business of the company. On the same day, appellant No.3 wrote another letter to the concerned authority requesting him to remove the restraint order in Savings Bank account. On 16.9.2005, appellant No.1 addressed another letter to the Assistant Director of Income Tax (Investigation) again reiterating its stand that the bank accounts have been disclosed in the regular books of account and there was no justification for keeping the restraint on the operation for the bank accounts.

4. According to the appellants no reply was received to the letters dated 8.8.2005 and 16.9.2005 and the respondents did not make any effort to verify the correctness of the appellant s contentions. On 21.9.2005 appellant No.3 moved an application under Section 132(B) of the Act to the Deputy Commissioner of Income Tax for release of jewellery worth Rs.4,76,588/- and FDR of Rs.1,79,710/-. Since the nature and source was duly explained, the limitation of 60 days in terms of Section 132(8A) expired w.e.f. 31.8.2005 i.e. the date of issuance of the order of restraint. On 3.10.2005 appellant No.2 addressed a letter to the Manager, HDFC Bank informing him that as per provisions of Section 132 (8A) of the Act, the restraint order was no longer operative. On 4.10.2005 Bank through its Bank Manager sought clarification from the Deputy Director of Income Tax. The Income Tax Department on 4.10.2005 issued two fresh warrants of authorization under Section 132 of the Act in respect of the bank accounts. It is alleged that the appellants were not informed about the warrants of search. On 5.10.2005 the bank accounts of the appellants were searched and seized through withdrawal of cash by demand drafts. Appellant s stand in essence is that the fresh warrants of authorization were without jurisdiction and in any event since the accounts had been duly disclosed in the regular books of account, there was no scope for operating Section 132 (3) of the Act. The