Section 132(1)(b)

Section 132(1)(b) — the law in short

What the courts have decided on section 132(1)(b), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PDIT (Investigation) v Laljibhai Mandalia Supreme CourtHelps department
  Can I get a search warrant quashed by showing the department's material was too thin?
  No. Forming the reason to believe under s.132 is an administrative act, and a writ court will not weigh whether the material was adequate. It will only ask whether the belief was mala fide, a pretence, or built on extraneous or irrelevant material.
• L.R. Gupta v Union of India High CourtHelps taxpayer
  I did not return a receipt because I believe it is not taxable yet. Can the Department search me on the footing that I have undisclosed income?
  No, not on that basis alone. The Delhi High Court quashed a search authorisation and everything done under it. Undisclosed income means income liable to tax which the assessee has kept back in an effort to escape assessment, knowing it to be taxable. A failure to file a return or to disclose what the Department believes is taxable is not enough. The satisfaction note said only that the family had not been disclosing their true income and wealth, which answers neither clause (b) nor clause (c) of section 132(1). The cash, jewellery and documents seized were ordered returned within two weeks.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.