HC Allows Use of Seized Docs From Lawyer’s Office if They Were Incriminating Against Assessee

Case Details: Maulikkumar Satishbhai Sheth v. ITO - [2024] 161 taxmann.com 543 (Gujarat)

Judiciary and Counsel Details

• • Bhargav D. Karia & Niral R. Mehta, JJ.
  • S.N. Soparkar , Sr. Adv. & B.S. Soparkar for the Petitioner.
  • Varun K. Patel, N. Venkataraman, Addl. Solicitor General, Ms Maithili D. Mehta, Nachiket Mehta & Ms Kinjal Trivedi for the Respondent.

Facts of the Case

The petitioner, a practicing advocate, was searched by the Income-tax Officials (AO) under section 132 of the Income-tax Act. During the search operation, the AO gathered digital and physical documents from the petitioner’s residence and office premises.

The petitioner contended that the revenue cannot take any action based on any document, much less any incriminating documents of the petitioner’s client found during the search.

High Court Held

The Gujarat High Court held that the petitioner was a practicing advocate and is protected as per the provision of Section 126 of the Evidence Act. The reliance on various decisions on the protection granted to the professional under Section 126 of the Evidence Act was placed by both the petitioner and AO.

The court held that the provision of Section 126 of the Evidence Act would not per se apply to the facts of the case. As per the provision of Section 132, the documents were seized by the AO during the search operation. As per Section 132(4A), the AO is entitled to seize the materials available during the search operation.

The petitioner was a practising advocate, and the AO had gathered digital and physical documents from his residence and office premises. AO is entitled to have the presumption with regard to the documents and other materials seized during the search operation.

Accordingly, If such documents are found to be incriminating, leading to any tax evasion, then AO is entitled to consider the same in accordance with the law without any restrictions as to whether the petitioner is involved in any manner or whether such documents are pertaining to or belonging to the petitioner or not.