The UNION OF INDIA & ORS. vs AGARWAL IRON INDUSTRIES

Whether the High Court was justified in quashing the search and seizure conducted under Section 132 of the Income Tax Act based on principles of non-traverse in the counter affidavit, without examining the confidential file containing the reasons for forming the 'reason to believe' --- Held No. The Supreme Court held that the High Court erred by not examining the confidential file to verify if the competent authority had recorded reasons for the search, and that the revenue's counter affidavit denial could not be treated as an admission of lack of reasons.