Director of Income Tax II (Investigations) & Ors. Etc. Vs Echjay Industries Pvt. Ltd. & Ors. (Supreme Court of India)
SC Declines to Interfere With Bombay HC Order Quashing Income Tax Search for Lack of Valid Reason to Believe; SC Upholds HC Relief After Search Authorisation Found Based on General and Irrelevant Material; SC Lets HC Order Stand Where Section 132 Search Failed Jurisdictional Test; SC Dismisses Revenue Plea Against HC Finding That Search Reasons Were Not Bona Fide; SC Keeps Question of Law Open While Upholding HC Order Quashing Tax Search; SC Backs HC View That Section 132 Search Requires Genuine Reason to Believe; SC Affirms HC Ruling That Search Action Cannot Rest on Mere Pretence; SC Declines Relief to Revenue After HC Finds Non-Compliance With Section 132 Preconditions; SC Refuses to Interfere as HC Holds Search Authorisation Lacked Relevant Information.
The dispute arose from search and seizure proceedings conducted under Section 132 of the Income Tax Act, 1961 against Echjay Industries Pvt. Ltd. and its directors and family members. The searches were carried out on 9 and 10 July 2008 pursuant to authorisations issued on 7 July 2008 by the competent authority under Section 132(1). The petitioners challenged the legality of the search authorisations before the Bombay High Court.
