Yash Shah
Whether revenue NOT entitled to demand unrestricted access to acquire electronic records present in laptops pertaining to third parties unconnected with person searched.
Equivalent Citation- (2009) 315 ITR 137 (Del.)
Relevant Section – 132
- The petitioner was a firm of auditors. During the course of search and seizure operations conducted against EMAAR, the laptop computers of two employees of the petitioner, who were conducting an audit of EMAAR, were seized by the Deputy Director.
- Subsequently, the Deputy Director issued summons under section 131 to the employees of the petitioner and their statements were recorded. On the request of the Deputy Director these employees provided him with the electronic data relating to three companies of the EMAAR group together with the print copies of the data. The Deputy Director insisted on securing total and unrestricted access to the laptops of all the other clients of the petitioner.
It has argued that the laptops that have been seized by the Respondent have confidential information relating to the accounts of 46 other clients, having no relation or business dealings with the Assessee, and seizure of these accounts will amount to serious breach of confidentiality which they are bound to protect by the principles of professional ethics.
Income Tax Department cannot make fishing or roving inquiry to initiate proceedings against all these companies which are the clients of the Petitioner.
Revenue argued that the Petitioner cannot assist any party in breaking the law; this submission is illogical since it cannot be presumed that the accounts relating to 46 other clients of the Petitioner contained in the two laptops are of this character. The rigours of the law, inter alia the necessity to have reasons to believe so must be recorded and be followed by warrants. An indiscriminate search frustrates the whole scheme of Section 132 and emasculates the protective measures against these draconian powers.
