RATHORE, J. - (1.) BRIEF facts of the case are that the petitioner M/s. Harvest Gold Foods (India) Private Limited is a private limited company and is engaged in the trade and business of manufacture of Bread in its factory situated at village Chhapar post Jhiwana Tapukara Tehsil Tijara, District Alwar (Rajasthan ).
(2.) THE petitioner company is manufacturing the bread in the name and style "harvest Gold" and which is sold inside and outside the State of Rajasthan including capital city of Delhi. Earlier the name of petitioner company was Florida Foods (India) Private Limited and subsequently changed to its present name with effect from 13. 9. 1975. The petitioner company became a deemed public company w. e. f. 1. 7. 1998 and thereafter became private limited company pursuant to Section 43-A (2a) of the Companies Act 1956. The controversy arose when the respondents conducted search and seizure on 8. 1. 2004 at the residence of petitioners and their commercial establishments at New Delhi and Rajasthan and also made survey u/sec. 133-A at Delhi Depots and subsequently issued notices u/s. 131 (1a) to the petitioners and their business constituents. Against the notice dated 8. 1. 2004 and 9. 1. 2004 the petitioners preferred this present petition asking for writ order or direction to quash and set aside the search operations and the panch nama dated 8. 1. 2004 and 9. 1. 2004. Learned counsel for the petitioner challenged the aforesaid action of the respondents on the ground that the search warrant issued without information in possession, application of mind and also without reason to believe. Before issuing a warrant for searching the premises of any party, there should be `reason to believe' that the party is not likely to produce material relating to assessment of Income unless a search is carried out. The emphasis in the statute is `information in possession, application of mind and reason to believe. ' By referring this provision, learned counsel for the petitioner submitted that in the instant case the respondents carried out search and seizure without information in possession, reason to believe and also without the application of mind.
(3.) IN support of his submissions, learned counsel for the petitioner placed reliance on the judgment of Kusum Lata vs. Commissioner of INcome Tax, 1989 ITR 365 wherein this High Court has laid down that the expression "has reason to believe" in sub section (1) of section 132 of INcome-tax act means the bona fide belief based on some reasonable or credible information and not on the information which may be imaginary. Learned counsel for the petitioners also placed reliance on the case of LR Gupta & Others vs. Union of India & Others, 1992 ITR 194 page 32 wherein the Division Bench of Delhi High Court observed that expression "information" must be something more than a mere rumour and gossip or a hunch. There must be, some material which can be regarded as information which must exist on the file on the basis of which the authorising officer can have reason to believe that section 132 is called for any of the reasons mentioned in clause (a), (b), (c ). Learned counsel for the petitioner further placed reliance on the judgment of Hon'ble the Supreme Court in the case of ITO vs. Seth Bros. 1969 (974) ITR 836 wherein it was observed as under:- " Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the tax payer the power must be exercised strictly in accordance with the law and only for the purpose for which the law authorized it to be exercised. If the action of the officer issuing the authorization or of the designated officer is challenged the officer concerned must satisfy the court about the legality of his action. " ;