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2024 Supreme(Online)(Guj) 26736
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, NIRAL R. MEHTA, JJ
MAULIKKUMAR SATISHBHAI SHETH – Appellant
Versus
INCOME TAX OFFICER ASSESSMENT UNIT 4(2)(6), AHMEDABAD – Respondent
R/SPECIAL CIVIL APPLICATION NO. 20187 of 2023
For the Appellants/Petitioners:MR SN SOPARKAR, SR. ADVOCATE, MR B S SOPARKAR
For the Respondents: MR.VARUN K.PATEL, MR N. VENKATARAMAN, ADDL. SOLICITOR GENERAL, MS MAITHILI D MEHTA, MR NACHIKET MEHTA, MS.KINJAL TRIVEDI
The court affirmed that the search under Section 132 of the Income Tax Act was valid, but emphasized the importance of safeguarding attorney-client privilege in proceedings involving seized documents.
Headnote:(A) Income Tax Act, 1961 - Section 132 - Search and seizure operations conducted at the petitioner’s premises were deemed valid as the initiation complied with Section 132, satisfying the requisite legal standards of belief and procedure. The search, lasting from November 3 to November 6, 2023, raised issues of attorney-client privilege and the legality of document seizures involving third parties. (Paras 12, 14, 11.3)
(B) Attorney-Client Privilege - The court emphasized that the privilege does not apply where a document is linked to illegality. The threshold for seizure of client documents requires them to be connected to confirmed illegal activities. (Paras 11.4, 12.1)
(C) Privacy Rights - The conduct of authorities during the search was criticized for violating rights to privacy and dignity of the petitioner and his family, highlighting the requirements for appropriate conduct in such operations. (Paras 11.3)
(D) Decision - The specific conduct of actions during the search was deprecated, but the validity of the search and potential seizure of incriminating documents was upheld. (Paras 11.3, 15.1)
Result: Petition dismissed.
| Table of Content |
|---|
| 1. search actions under income tax act. (Para 2 , 3 , 4) |
| 2. court's rationale on search authority. (Para 5 , 9) |
| 3. arguments against search actions' legality. (Para 6 , 12 , 16) |
| 4. interpretation of privilege in legal contexts. (Para 8 , 14) |
| 5. final order on search proceedings. (Para 17 , 18) |
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned senior advocates Mr. Mukul Rohatgi and Mr. S. N. Soparkar with learned advocate Mr.B.S. Soparkar for the petitioner, learned Additional Solicitor General Mr.N. Venkataraman with learned advocate Ms.Maithili Mehta with learned advocate Mr.Nachiket Mehta and learned advocate Ms.Kinjal Trivedi for respondent Nos.5 to 11, and learned advocate Mr.Varun Patel for respondent Nos.1 to 4.
1.1 Rule, returnable forthwith. Learned advocates for the respective respondents waives service of notice of Rule.
1.2 Having regard to the controversy involved in this petition and with consent of learned advocates appearing for the respective parties, the same was taken up for hearing as learned advocates for the respective parties have concluded their submissions and pleadings as recorded in order dated 29th January, 2024.
2. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs.
“(a) Declare the search action u/s. 132 of the Income Tax Act carried out by the Respondents at the residential premises as well as the office premises of the Petitioner as bad, arbitrary, unreasonable, illegal, contrary to law and without jurisdiction.
(b) Direct the respondents to return the documents taken from the office of the petitioner without keeping any copy with the respondents and their Income Tax department, also direct the respondents to return all the digital data taken from the devices i.e. ipad(s), Laptop(s), Mobile(s), Desktop(s), Computer(s) and from any other Gadget(s) from petitioner's residence and office without keeping any copy thereof.
(c) Direct the respondents to destroy all the copies if the respondent have/kept from the records collected in physical and digital format consequent to the search action u/s. 132 of the Income Tax Act carried out at the residential premises as well as the office premises of the Petitioner.
(d) Direct the respondents to not use/rely upon any material collected in physical or digital format consequent to the search action u/s 132 of the Income Tax Act in any other proceeding in relation to the Petitioner or any other assessee.
(e) Direct the respondents to return the cash seized consequent to the search action u/s. 132 of the Income Tax Act carried out at the residential premises as well as the office premises of the Petitioner.
(f) Declare that there was no satisfaction and reason to believe under the act to carried out search action u/s. 132 of the Income Tax act.
(g) Pending the admission, hearing and final disposal of this petition, direct the Respondents not to deal with the evidences collected in any manner whatsoever and to stay further proceedings under the act consequent to the search action u/s. 132 of the Income Tax Act carried out at the residential premises as well as the office premises of the Petitioner.”
3. Brief facts of the case are as under:
3.1 The petitioner is an individual and by profession he is a practicing advocate since 2003 as per the certificate issued by the Bar Council of Gujarat.
3.2 It is the case of the petitioner that in the morning of 03rd November, 2023 at about 06.35 a.m., officers of income tax of Assessment Unit 4(2)(6), Ahmedabad i.e. respondent No.1 along with other officers came to the residence of the petitioner with warrant of authorisation issued by respondent No.3 – Principal Director of Income Tax (Investigation), Ahmedabad.
3.3 It is the case of the petitioner that officers who came for search of the residential premises of the petitioner at 06.35 a.m. on 03rd November, 2023, asked the petitioner and his family members to switch-off the mobile pho
