New Delhi, Mar 9 The Supreme Court on Monday refused to entertain a PIL challenging the scope of search and seizure powers under Section 132 of the Income Tax Act on the ground that it has the potential of misuse by the authorities.
"We cannot second-guess a provision to the extent of the remedy provided. Remedy is good enough for us," a bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi said, adding that such provisions were enacted to deal with big tax evaders.
The bench said that initially, the provision may look innocuous but it is made to catch big fish.
"This is an initial apprehension. There are provisions which are sometimes innocuously made but which look like they can be misused... so, courts may have to examine them later.
"There are provisions which are capable of misuse but are streamlined over time. These provisions are often for the big tax evaders, etc," the CJI said.
The bench disagreed with the submission of senior advocate Sanjay Hegde that the provision was unconstitutional.
The main concern raised by the senior advocate regarding the provision was that it exempted the tax officers from disclosing the reasons for the search to the assessee or to the Income Tax Appellate Tribunal.
The bench refused to entertain the plea and this led to its withdrawal.
It, however, granted the PIL petitioner Vishwaprasad Alva to approach the Centre with a representation seeking modifications or clarifications with respect to the provision.
The top court was hearing a PIL challenging the scope of search and seizure powers under Section 132 of the Income Tax Act on the ground that it has the potential of misuse by the authorities.
Section 132 of the Income Tax Act empowers IT officials to conduct a search and seizure when they have "reason to believe" that a person has undisclosed income, assets or documents.
During the hearing, Justice Bagchi highlighted the practical challenges of issuing prior notice in search and seizure cases, particularly in the digital era.
Justice Bagchi said giving advance notice could defeat the very purpose of an investigation, as electronic evidence can be easily destroyed.
"If notice is given for search and seizure, there is a potential for destroying the evidence. The best way to snub out such an investigation against the digital record is to destroy the device itself," he said.
Hegde said the impugned provision provides excessive power in the hands of tax authorities and exposes not only the alleged tax evader but also third parties to coercive action.
"Suppose you go after the lawyer, then you go after the clerk's phone. Please see, it is not only the evading assessee who is at risk. Anybody in contact is at risk, and the power is kept with the Joint Commissioner," the senior lawyer said.
The CJI said the statutory powers were neither uncontrolled nor unbridled.
"This is not an uncontrolled or unwieldy power. Your concerns will go," the CJI said.
