Balkrushna Gopalrao Buty Vs Principal Director (Investigation) (Bombay High Court)
The Bombay High Court has set aside a search and seizure operation conducted by the Income Tax Department at the premises of Balkrushna Gopalrao Buty and others, citing a fundamental lack of “reason to believe” on the part of the authorities as mandated by Section 132 of the Income Tax Act, 1961. The court ruled that the information in the department’s possession prior to the search did not meet the statutory requirements for initiating such a coercive action.
The petitioners, Balkrushna Gopalrao Buty and others, challenged the search and seizure conducted from November 1 to November 3, 2023. Their senior counsel, Mr. Manohar, argued that a search under Section 132 must be based on information leading the authority to a “reason to believe” that a person has failed to produce required documents, would not produce them, or is in possession of undisclosed income or property.
Mr. Manohar contended that the search was solely based on five immovable property transactions, dating from December 2019 to February 2022, which Petitioner No. 1 had entered into jointly with Mr. Anil Sapra of Avaneesh Logistics Private Limited. He submitted that these transactions had already been disclosed in the Petitioner No. 1’s income tax returns for the relevant assessment years. Therefore, according to the petitioners, there was no fresh material to justify a search and seizure operation under Section 132.
