The competent authority must have information and reasons to believe that the conditions precedent for conducting a search exist before issuing a search warrant under section 132 of the Income Tax Act, 1961.

JAWAHARLAL GUPTA, J.

1. Is the search of the petitioners premises vitiated on the ground that the competent authority had no information or material as contemplated under section 132 of the Income-tax Act, 1961 ? This is the primary question that arises for decision in this case. A few facts maybe briefly noticed.

2. The petitioner is an assessee under the Income-tax Act since the year 1961. He was running a sole proprietary concern under the name and style of Jadco Industries for the manufacture and sale of auto parts. He has his residence within the factory premises. In the year 1986, the petitioner inducted his son, Mr. Tarun Sharma, as a partner. Jadco Industries had, thus, become a partnership concern.

3. In the year 1987, Mr. R. Bhardwaj, the petitioners son-in-law, was posted as Inspecting Assistant Commissioner of Income-tax (Acquisition) at Bangalore. At that time, according to the petitioner, respondent No. 3 was the Chief Commissioner of Income-tax at Bangalore. He made certain reports reflecting adversely on the integrity of Mr. R. Bhardwaj. As a result, the residential premises of Mr. Bhardwaj were searched on July 1, 1987. On the same day, the business and residential premises of the petitioner were also searched. During this search operation, certain documents, a list of which has been produced as annexure P-1, were seized. On the same day, respondent No. 6 had also issued a notice under section 131 of the Act calling upon the petitioner to produce certain books of account. A copy of this notice has been produced as annexure P-2. The petitioner alleges that the search of his premises and the seizure of the books of account as also the notice issued by respondent No. 6 were wholly illegal and without jurisdiction. The petitioner challenges the action of the respondents in conducting the search of his premises primarily on the ground that "there could be no information with respect to the concealment of any of these items which may have led to the belief that the petitioner was in possession of undisclosed income by way of money, bullion, jewellery or other valuable articles". He further alleges that respondent No. 6 was not the assessing authority of the petitioner. No proceedings were pending before him. As such, the issuance of the notice under section 131 of the Act was wholly without jurisdiction.

4. A written statement on behalf of respondent No. 1 has been filed by Mr. K. Rangarajan. He states that the warrant of authorisation for search had been issued on the basis of "the information available to him on record". He maintains that while authorising the search against the petitioner, he had satisfied himself with the conditions precedent for issuance of search warrant under section 132(1) of the Income-tax Act, 1961 ..." It has been further averred that "Shri R.R. Thakur, Income- tax Officer, Survey Circle, Jalandhar, was duly authorised to issue summons under section 131 of the Act as he was competent authority under orders of the Commissioner of Income-tax, Jalandhar, vide orders dated May 25, 1987". Written statements filed by respondents Nos. 4 and 6 are of a formal nature.

5. The petitioner has filed a replication controverting the stand taken by the respondents and reiterating the claim as made in the petition. He has also filed a Civil Miscellaneous Application No. 2 of 1992 along with which he has produced a copy of the order dated December 7, 1988, passed by Mr. Justice S. Rajendra Babu of the High Court of Karnataka in Civil Writ Petition No. 11110 of 1987 (R. Bhardwaj V/s. Chief CIT (Admn.) [1990] 182 ITR 149). A perusal of this order shows that learned senior standing counsel appearing for the Department had conceded that the warrant under section 132 of the Act "could not have been issued by the Chief Commissioner of Income-tax ...." As a result, the petition was allowed and the rule was made absolute.

6. These are the pleadings.

7. Mr. Sanjay Majithia, learned counsel for the petitione