K.P Radhakrishna Menon, J.:— The first petitioner is a firm carrying on retail-cum-wholesale business in textile goods. The second petitioner is a partner of the firm, Messrs. Kalpaka Enterprises, whereas the third petitioner is a partner of another firm, Messrs. Kalpaka Departmental Stores. The firms, Messrs. Kalpaka Bazar, Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores, are situated in the same building bearing Calicut Corporation door No. VII/974.
2. From the facts stated in paragraph 5 of the original petition, it is clear that Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores are sister concerns of the first petitioner-firm. Three other sister concerns are known as Messrs. Kalpaka Tourist Home, Messrs. Unnerikutty ana Messrs. Kalpaka Oil Industries. On the showing of the petitioners themselves, the administrative office of all these business concerns is accommo dated in the building bearing door No. VI/948, Mootolikandy Road. The premises of the first petitioner were searched by the income-tax authorities on the strength of the warrant issued by the first respondent under section 132 of the Income-tax Act. The search, according to the petitioner, was conducted in flagrant violation of the relevant provisions of section 132 and rule 112 of the Income-tax Rules and, as such, the search is liable to be declared illegal.
3. The petitioners, accordingly, filed this original petition under article 226 of the Constitution of India for the following reliefs:
(a) to issue a writ of certiorari or other appropriate writ, direction or order calling for the records leading to the search conducted in the business premises of the first petitioner firm and to declare it as illegal;
(b) to issue a writ of mandamus or other appropriate writ, direction or order directing the first respondent and the officers authorised by him to give possession of the business premises of the first petitioner firm forthwith;
(c) to issue a writ of mandamus or other appropriate writ, direction or order directing the first respondent and the officers authorised by him to forbear from preventing ingress and egress of the customers, employees and partners of the business concerns, namely, Kalpaka Enterprises and Kalpaka Departmental Stores, in which petitioners Nos. 2 and 3 are partners.
(cc) to issue a writ of mandamus or other appropriate writ, direction or order quashing the notice, exhibit P-3, as void and illegal and issued without jurisdiction.
(d) to award the costs of this petition to the petitioners; and
(e) to grant such other reliefs as may be prayed for and which this hon'ble court may deem fit and proper to grant.”
4. It is the common case of the parties that the only issue that survives for consideration is issue (a) That means that the only question that arises for consideration is: Is the search conducted by the income-tax authorities liable to be declared as illegal?
5. Learned counsel for the petitioners argued that the Commissioner had no materials before him providing a basis for his belief that the first petitioner is in possession of any valuable article or thing or money or bullion representing either wholly or partly income or property which has not been or would not be disclosed for the purposes of assessment under the Act, enabling him to authorise the officers to search the business premises of the first petitioner. Counsel in this connection made specific reference to the following facts stated in paras 9 and 10 of the original petition:
“… The textile business in the name of Kalpaka Bazar was started in the year 1979. From the date of the establishment, the first petitioner-firm is regularly paying income-tax like other partnership firms referred to above. Huge amounts are being paid as income-tax. The assessment of the first petitioner-firm for the year 1983-84 was completed by the second respondent on August 26, 1985, determining the income-tax and surcharge at Rs. 1,32,511. The first petitioner-firm submitted its return for the assessment year 1984-85 also. The assessment for the year 1984-85 was not finalised so far. So far no notice was issued by the second respondent for finalising the assessment for the year 1984-85.
10. The first petitioner-firm has complied with all the notices issued by the Income-tax Department. Whenever the books of account were called for, the same were produced. The returns submitted by the petitioners for the purpose of assessment have been substantially accepted. They have also disclosed their actual income. In the case of the first petitioner-firm, there is no question of non-disclosing the income. In spite of all these, the Commissioner of Income-tax, Kerala, who is the first respondent in this original petition, issued an authorisation to conduct a search under section 132 of the Income-tax Act, 1961, in the business premises of the first petitioner-firm….”
6. For this reason alone, the search is liable to be declared illegal.
7. The Commissioner has specifically refuted the above contention of the petitioners. Counsel for the Revenue in this connection made particular reference to the following excerpts from the counter-affidavit of the Commissioner:
“9. The satisfaction reached by me on the basis of materials or the application of my mind to the materials and the action on the basis of the materials cannot be challenged as there were materials before me to satisfy me that the conditions precedent to the action culminating in the issuance of the warrant did exist in the case of the assessee.
10. The warrant of authorisation was issued bona fide and not at all for any collateral purpose.
11. As I submitted earlier, I had material information before me to the effect that the first petitioner is in possession of a large quantity of undisclosed stock of textile goods. On the basis of such information, I authorised a search and seizure operation at the business premises and godown of the first petitioner under section 132(1) of the Income-tax Act, 1961, and issued warrants of authorisation on September 10, 1985, in the names of (1) Sri N.P Padmanabhan, Assistant Director of Inspection (Int.), Office of the Commissioner of Income-tax, Cochin, (2) Sri P.K.P Nambiar, Income-tax Officer, A-Ward, Circle-I, Calicut, and (3) Shri N.K Vijayaraghavan, Income-tax Officer, C-Ward, Circle-I, Calicut. Warrants of authorisation were also issued in respect of the residence of partners, Shri M.A Unnerikutty, managing partner of the first petitioner-firm, and his sons and daughters, Shri M.A Sishan, Sri M.A Sajeev, Smt. Jalaja Prakash and Smt. M.A Sheela, who are also partners of the first petitioner-firm… There was information to the effect that the first petitioner was in possession of a huge quantity of unaccounted stock-in-trade which had not been disclosed to the Income-tax Department and which represented his undisclosed income…”
(emphasis* supplied)
8. Whatever be the contentions of the Commissioner, since his action in issuing the authorisation is under challenge, he must satisfy this court about the legality and regularity of his action. He, accordingly, made available for the scrutiny of this court the relevant records. On going through the records, I am satisfied that the Commissioner issued the authorisation only on his being satisfied (this satisfaction is based on the information he got from the report of the Assistant Director of Income-tax (Investigation)) that the first petitioner-firm was in possession of a large quantity of undisclosed stock of textile goods. The report of the Assistant Director (Investigation) contains materials/facts, which, to my mind, enable any-reasonable or prudent man to form a reasonable belief that the first petitioner is in possession of a large quantity of undisclosed stock of textile goods. It cannot, therefore, be held that the Commissioner, in issuing the warrant to search the premises, has exercised the power under section 132 either maliciously or for a collateral purpose. It should, in this connection, be remembered that there is no provision of law which insists that “the reasons” shall be communicated to the party concerned. It is enough if the circumstances for the issuance of the authorisation existed on the date of such issuance. If such circumstances did exist, then the mere filing of returns or completion of assessment will not preclude the Department from ordering search and seizure. The challenge against the action of the Commissioner in issuing the authorisation on the ground of mala fides; therefore, is not sustainable.
9. Yet another reason urged by the petitioners to declare the search illegal is this: The authorised officers who conducted the search did not apply their mind to the relevancy or the usefulness of taking details of the stock. Counsel further argued that the officers acted mala fide in not allowing the customers to go to the premises of the firms represented by petitioners Nos. 2 and 3, situated in the first and second floors of the building where the first petitioner-firm is conducting its business. The officers even misbehaved with the partners and the workmen. Counsel in this connection made particular reference to the averments contained in paragraph 13 of the original petition. They read:
“13. Messrs. Kalpaka Bazar, Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores are located in one building as stated above. There is only one entrance from the ground floor to the first and second floors of the building. Having found no excess money or irregularity in the accounts of the first petitioner-firm while conducting the search on September 17, 1985, the disappointed officers drove away all the employees and partners who were present at that time from the said building and sealed the building under the pretext that they wanted to take physical verification of the stock of the textile business conducted by the first petitioner-firm. As a result, the business of Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores are completely paralysed since the entrance to their business premises has been blocked/closed by the officials authorised by the first respondent to conduct the search. In other words, ingress and egress to the business premises' of Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores to the customers, employees and partners became impossible. This aspect was also pointed out in the complaint sent by the second petitioner to the first respondent on September 18, 1985. The true copy of the said complaint is produced herewith marked as exhibit P-1. One of the partners of the first petitioner-firm also sent a complaint to the second respondent regarding the harassment by the officers who conducted the search and the unauthorised taking possession of the building and keeping custody of the business. The true copy of the said complaint sent by the partner of the first petitioner-firm is produced herewith marked as exhibit P-2”. In proof of these statements, counsel made reference to certain comments made by the Advocate-Commissioners (the Department has filed its objections to the report of the Advocate-Commissioners) who had been directed by this court to take an inventory of the stock-in-trade of the first petitioner. The affidavits filed by the officers who conducted the search as also the affidavit of the Commissioner of Income-tax would show that they have emphatically denied the allegations contained in the petition particularly in paragraph 13. With reference to the complaint preferred by one of the partners that the authorised officers who conducted the search were harassing the partners, the Commissioner of Income-tax, in his counter-affidavit, has stated thus:
“15. The first respondent admits that a complaint was lodged with his office by the second petitioner on September 18, 1985, to the effect that the passage to the business premises of Messrs. Kalpaka Enterprises and Messrs. Kalpaka Departmental Stores was blocked. The third petitioner, Sri M.A Sajeev, partner of Messrs. Kalpaka Bazar, had also sent a complaint on September 18, 1985, wherein he had stated that the authorised officers had harassed him and his employees by taking possession of the building and keeping custody of the business. The deponent had camped at Calicut on September 24, 1985, to give a personal hearing to the complainants. The Inspecting Assistant Commissioner of Income-tax, Calicut Range, had on instruction informed the complainants that they could come and meet him at the Calicut Office on September 24, 1985, at 10.30 a.m if they so wished. The complainants first refused to receive the letter giving them the appointment. The letter had to be placed inside the compound of the residence of the complainants as the Inspectors who went there to deliver the letter were denied ingress to the compound by the gateman. One of the complainants, namely, Sri M.A Sajeev, the third petitioner, was informed over the telephone by the Inspecting Assistant Commissioner of Income-tax, Calicut Range, about the appointment. No one appeared to substantiate the complaint.”
10. The issues arising out of these competing contentions, as observed by the Supreme Court in ITO v. Seth Brothers, [1969] 74 ITR 836, cannot be determined merely on affidavits especially when serious allegations of improper behaviour and misconduct are made against the officers. As already observed, the officers who conducted the search have asserted that they acted in good faith and in discharge of their official duties and not for any collateral purpose. The Commissioner of Income-tax has also denied the said allegations. There was, however, no request on the part of the petitioners for adducing evidence in proof of the various allegations of misbehaviour levelled against the authorised officers. In the absence of any proof of these allegations, the argument that the authorised officers, in the conduct of the search, acted mala fide is liable to be rejected. I accordingly reject the same.
11. The original petition, for the reasons stated above, is dismissed. But, in the circumstances, no order as to costs.