| Case ID |
e0b377e1-adfb-4fde-8865-b3b63b8b78a1 |
| Body |
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| Case Number |
D-2741 of 1992 |
| Decision Date |
Jan 01, 1992 |
| Hearing Date |
Jan 01, 1992 |
| Decision |
The Karnataka High Court ruled that the search and seizure conducted on the residential premises of the petitioner, Nenmal Shankarlal, based on a warrant issued in the name of a partnership firm, was invalid. The court emphasized that a search warrant must clearly indicate the person whose premises are to be searched and stated that the legal title of the assets must be traced to the individual, not merely to the firm. Since the petitioner voluntarily offered a sum of Rs. 25 lakhs in lieu of unaccounted assets found during the search, the court held that there was no valid seizure, as seizure implies forcible taking from an unwilling owner. Consequently, the order passed under section 132(5) of the Income-tax Act was quashed due to the lack of necessary authorisation and the absence of a legitimate seizure. |
| Summary |
In the pivotal case of Nenmal Shankarlal v. Assistant Commissioner of Income Tax, the Karnataka High Court addressed critical issues surrounding search and seizure under the Income-tax Act, 1961. The case arose when a search was conducted at the residential premises of Nenmal Shankarlal, a partner in several firms, based on a warrant issued for the firms. The court determined that the search was invalid as the warrant did not specify the individual whose premises were to be searched, violating legal protocols. It was established that the firm and its partners are considered separate entities under the law. The court also clarified that the voluntary offering of a sum of Rs. 25 lakhs by the petitioner, instead of a forcible seizure, negated the basis for the order made under section 132(5). The decision highlighted the importance of proper authorisation in search operations and established a precedent that voluntary disclosures cannot be treated as seizures. This ruling is significant for tax law practitioners and individuals facing similar circumstances, as it reinforces the necessity for clear legal procedures in tax-related searches and seizures. |
| Court |
Karnataka High Court
|
| Entities Involved |
Not available
|
| Judges |
S. Rajendra Babu, J.
|
| Lawyers |
H. Raghavendra Rao
|
| Petitioners |
Nenmal Shankarlal
|
| Respondents |
Assistant Commissioner of Income Tax
|
| Citations |
1992 SLD 1554,
(1992) 195 ITR 582
|
| Other Citations |
CIT v. Tarsem Kumar [1986] 161 ITR 505/ 27 Taxman 305 (SC),
Ramesh Chander v. CIT [1974] 93 ITR 244 (Punj. & Har.),
Motilal v. Preventive Intelligence Officer [1971] 80 ITR 418 (All.),
Laxmipat Choraria v. K.K. Ganguli [1971] 82 ITR 306 (Cal.)
|
| Laws Involved |
Income-tax Act, 1961,
Income-Tax Rules, 1962
|
| Sections |
132(5),
112
|