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IN THE HIGH COURT OF DELHI AT NEW DELHI
V. KAMESWAR RAO, SAURABH BANERJEE, JJ.
Raj Krishan Gupta and Others - Appellants
Versus
Principal Director of Income Tax (Investigation), New Delhi -Respondent
W.P. (C) No. 11005 of 2024
Decided On : 09-09-2025
| Table of Content |
|---|
| 1. validity of search under section 132 (Para 1 , 2 , 3) |
| 2. details of seized items (Para 4) |
| 3. claim of ownership and compliance with cbdt instructions (Para 5 , 6 , 7) |
| 4. legal precedents on search powers (Para 8 , 10) |
| 5. arguments regarding lack of adequate opportunity and mala fides (Para 11 , 12 , 13 , 18 , 20) |
| 6. conditions for lawful search and seizure (Para 19 , 21 , 22 , 24 , 29) |
| 7. assessment of evidence and justification of search powers (Para 23 , 25 , 26 , 27 , 30) |
| 8. conclusion on legality of search and seizure (Para 28 , 35) |
| 9. dismissal of the petition (Para 36) |
JUDGMENT :
V. KAMESWAR RAO, J.
1. The present writ petition is filed by the petitioners seeking a declaration that the search conducted on 11.05.2024 under Section 132 of the Income Tax Act, 1961 (hereinafter, The Act), on the lockers of the petitioners are invalid in law and also appropriate directions for release of the jewellery/ornaments/valuables etc. seized during the said search.
2. The petitioner Nos. 1 and 2 are husband and wife respectively. Petitioner No. 3 is the son of petitioner Nos. 1 & 2 while petitioner No.4 is the wife of petitioner No. 3. Petitioner Nos. 3 & 4 have a minor daughter. The petitioners have filed their ITR for AY 2023-24.
3. The facts of the case as borne out from the petition are that a search and seizure was conducted under Section 132 of the Act on 11.05.2024 on Locker Nos. 179, 163 & 175, all located at South Delhi Vaults at W-113, Greater Kailash-2, New Delhi, of which the petitioners are the owners. Search was conducted on Locker No. 179 at South Delhi Vaults on basis of Warrant of Authorisation issued by the respondent in case of petitioner Nos. 1, 2 & 3. This was followed by search on Locker No. 163, on basis of authorisation, issued in case of petitioner Nos. 1, 3 & 4 followed by search on Locker No. 175 at the same South Delhi Vaults, on basis of authorisation to conduct search issued by the respondent , in case of Petitioner Nos. 1 & 3.
4. Details of the search and seizure of the lockers are as follows:
| Locker no. | Items found | Value | Item seized or returned |
| 1 T 79 IME:01:40 PM- 06:00 PM (Statement of P1 recorded) | B J ullion (263.170 gr. Gold) ewellery (1028.580 gr gold and 54.25 ct diamond) | R R s. 19,18,275 s. 88,35,127 | F ( ound and seized w.r.t P-1,2,3 (ANN. A2) Panchnama – pg.52 Annexure B- pg.54 Annexure J- pg.55) |
| 1 T 63 IME:06:10 PM- 08:30 PM (statement of P3 recorded) | B J ullion (52.500 gr. Gold) ewellery (1623.966gr gold and 74.76 ct. diamond) | R R s. 3,82,500 s. 1,41,01,451 | F ound and seized w.r.t P-1,3,4 (ANN. A3) (Panchnama- pg. 57) |
| 1 T 75 IME: 08:35 PM (11.05.24) - 04:35 PM (12.05.24) (statement of P3 recorded) | B J ullion 2523600 gr ewellery 227.090gr gold and 3.75ct diamond) -phone 13 pro max (belonging to P1 ash ld silver coins | R R s. 1,88,32,950 s. 19,86,,913 Rs. 4000 Rs. 76,495 | Found and seized w.r.t. P-1,3 Backup of the said mobile was taken by authorizing officer and returned as not seized Both cash and silver coins were not seized and returned by the authorized officer.(ann.C) Ann. S Panchnama – pg.63 |
5. It was contended by Mr. Arvind Kumar, learned counsel for the petitioners that most of these valuables seized are disclosed incomes or are ancestral property. Part of the jewellery belongs to the minor daughter of petitioner Nos. 3 & 4, and some belong to the daughter of petitioner Nos. 1&2, who had given it for safekeeping to her parents, as she is residing out of India.
6. He further contended that no compliance has been made with clauses (ii) and (iii) of the CBDT Instruction No. 1916 issued on 11-05-1994 whereby following guidelines were issued for strict compliance:
“(ii) In the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of 500 gms. Per married lady 250 gms per unmarried lady and 100 gms. per male member of the family, need not be seized.
(iii) The authorized officer may having regard to the status of the family and the customs and practices of the community to which the
Searches conducted under Section 132 of the Income Tax Act require valid reasons to believe, which were established in this case, affirming the legality of the searches and seizures.
The necessity for authorities to possess credible information to form a reasonable belief before conducting search and seizure under Section 132 of the Income Tax Act is essential for the validity of....
Search and seizure under Section 132 of the Income Tax Act requires credible information that justifies belief, and cannot be based on mere suspicion.
Seizure of stock-in-trade under the Income Tax Act requires clear evidence of undisclosed income; mere suspicion is insufficient.
Seizure under the Income Tax Act should be conducted with due care and caution, and should not be based solely on suspicion. The seizure of goods should be justified and in accordance with the provis....
The court upheld the legality of search and seizure under Section 132 of the Income Tax Act, asserting that the 'reason to believe' standard is justiciable, but not the adequacy of those grounds.
Search and seizure under tax laws require careful scrutiny to avoid abuse of power, reflecting the balance between enforcement and constitutional rights.
The main legal point established in the judgment is that the gold bullion seized during the search was stock-in-trade and duly accounted in the books of accounts, as per the relevant provisions of FE....
The main legal point established in the judgment is that the power under Section 131(1A) of the Income Tax Act is not an independent power, but is for the purpose of making an inquiry and investigati....
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