SNJ Breweries Pvt. Ltd Vs Principal Director of Income Tax (Madras High Court)
A batch of writ appeals was filed challenging a common order of the Single Judge involving multiple proceedings arising from search and assessment actions under the Income Tax Act, 1961. The challenges related to the validity of the search conducted under Section 132, the centralization of assessments under Section 127, notices issued under Sections 153A and 153C, attachment orders under Section 281B, and notices and assessment orders under Sections 143(2) and 143(3). The appellants included companies of the SNJ Group and associated individuals.
The Single Judge’s order had rejected these challenges, prompting the appeals. The appellants contended that the proceedings suffered from jurisdictional defects, including absence of conditions for initiating search under Section 132(1)(a)–(c). The matters raised pure questions of law related to jurisdiction rather than detailed factual disputes.
On the issue of validity of the search, the appellants argued lack of jurisdiction to authorize the search because the statutory prerequisites—such as prior issuance of sum-mons or notices, past conduct showing failure to produce documents, or possession of undisclosed assets—were absent. They emphasized that SNJ entities had beencompliant taxpayers, had not been issued summons under Sections 131 or 142, and that the search yielded no unaccounted assets. Therefore, they claimed the “reason to believe” required under Section 132 was non-existent. They also urged the Court to call for the recorded reasons to verify adequacy and compliance.
