IMPORTANT POINT
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 investigation relating to concealed income. The court emphasized that before conducting a search under Section 132(1) of the Act, a notice under Section 131(1A) must be issued.

ORDER :

1. Heard Dr. A. Saraf, learned Senior Counsel assisted by Mr. P.K. Bora, learned counsel for the petitioner and Mr. S.C. Keyal, learned Standing Counsel for the Income Tax Department, Government of India appearing for all the respondents.

2. The present writ petition has been filed by the petitioner challenging the illegal search and seizure conducted at the residential premises of the petitioner on 02.12.2020 and the impugned notices dated 29.12.2020, 05.01.2021, 21.01.2021 and 28.01.2021, issued by the respondent No. 3, on the ground that the same is absolutely illegal and without jurisdiction and in violation of the mandatory provisions of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’)

3. The facts of the case is that the petitioner is an assessee under the Income Tax Act, 1961 and is regularly filing income tax returns and discharging tax liabilities by paying income tax and TDS. A search and seizure operation was conducted by the Additional Director of Income tax (Investigation) and his team at the residential premises of the petitioner on 4-12-2020 on the basis of the authorization dated 4-12-2020 issued by the Principle Director of Income Tax (Investigation) dated 4-12-2020. A survey operation was also conducted at the coal depot of the petitioner on 4-12-2020. During the search operation cash amounting to Rs. 2,69,920/- jewellery amounting to Rs. 10,44,695 was found. Inventory of Bank accounts found was prepared which related to the petitioner and his family members and a restraint order was passed as regard to book accounts. Some loose paper, notes books and data of cell phone and laptop was also seized. Restraint order under Section 132(3) of the Act was passed in respect of two bank lockers on the date of seizure i.e. on 4-12-2020. The said lockers were opened on 21-1-2021 and jewellery contained in the lockers was not seized and the search was finally concluded.

4. Thereafter, a notice was issued by the Deputy Director of Income Tax (Investigation), Respondent No. 3, being notice dated 29-12-2020 in the purported exercise of powers under Section 131 (1A) of the Income Tax Act 1961 directing the petitioner to attend his office on 6-1-2021 to give evidence and/or produce either personally or through an authorized representative, the books of accounts and other documents specified in the said notice i.e. audit report, profit and loss account, balance sheet for the financial years 2011-12 till date and other documents and papers.

5. The petitioner by its reply dated 4-1-2021 to the notice dated 29-12-2020 submitted that since search has already been conducted, no notice u/s 132(1A) of the Income Tax Act can be issued to the petitioner. The petitioner also submitted that it was practically not possible on the part of the petitioner to carry such huge books of accounts for a period of ten years to Dibrugarh and that the petitioner was ready to produce the available books of account at Guwahati.

6. The respondent no. 3 however vide notice dated 05.01.2021 rejected the contentions of the petitioner made in its letter dated 4-1-2021 to the effect that issuance of the notice u/s 131(1A) of the Income Tax Act 1961 was not within the jurisdiction of the Respondent No. 3 and directed the petitioner to send the soft copy of the books of account and others documents through email.

7. In reply to the notice dated 5-1-2021 issued by the respondent no. 3, the petitioner sent a reply vide letter dated 16-1- 2021 by making the submission that the decision in the case of Classic Builders and Developers vs. Union of India, 251 ITR 492 (MP) as referred to its reply dated 05.01.2021 was related to a survey conducted and was not related to a case where search had already been conducted. The petitioner in support of its contention that issuance of the notice u/s 131(1A) of the Act after the search was illegal relied on a decision of the Allahabad High Court in Anita Sahani vs. DIT (Investigation), 266 ITR 597.

8. The responden