The Delhi High Court has dismissed a writ petition filed by a South Delhi-based family challenging an Income Tax Department search on their bank lockers, ruling that the investigation had been conducted lawfully. The case, Raj Krishan Gupta and Others v. Principal Director of Income Tax (Investigation)-1, New Delhi [W.P.(C) 11005/2024], was decided on September 9, 2025, by a division bench of Justice V. Kameswar Rao and Justice Saurabh Banerjee.
Background
The dispute arose after tax officials searched three private lockers-Nos. 179, 163, and 175-at South Delhi Vaults, GK-II, on 11 May 2024, seizing large quantities of gold, diamonds, and bullion worth over ₹4.6 crore. The petitioners, comprising Raj Krishan Gupta, his wife, their son, and daughter-in-law, claimed the valuables were either disclosed income or ancestral property, and even included jewellery belonging to their minor granddaughter.
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Their counsel, Advocate Arvind Kumar, argued that the search was illegal as the department had no "reasons to believe" - a legal prerequisite for such intrusive action under Section 132 of the Income Tax Act. He pointed out that no prior summons were issued and that CBDT guidelines, which allow retention of a certain amount of jewellery during searches, were ignored.
Court's Observations
The bench, however, found the department’s justification convincing. Referring to the internal satisfaction note produced in court, the judges noted that discreet enquiries had shown the petitioners' lockers did not match their known financial profile. The rent for such lockers ranged from ₹50,000 to ₹3,00,000 per month, which appeared disproportionate to their declared income.
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"The record reveals that summons would not have yielded documents. The respondents had material to form a reasonable belief that the petitioners may be in possession of unaccounted wealth," the bench observed.
Justice Rao further remarked that the power to search under Section 132 is indeed invasive,
"but where the authority forms a bona fide opinion based on credible material, this Court cannot sit in appeal over its sufficiency."
The court also clarified that the three conditions under Section 132(1) - relating to failure to produce documents, likelihood of non-production, and possession of undisclosed assets - are disjunctive, meaning the department can rely on any one of them.
Decision
In its final order, the bench ruled that the Income Tax Department had valid "reasons to believe" before initiating the search and seizure. The Judges rejected the plea that the search was a 'fishing expedition', pointing out that summons had later been issued and the petitioners could not produce any supporting bills for the seized gold and diamonds.
"The formation of belief is administrative, not judicial. This Court will not review the adequacy of material unless mala fides are shown, which is not the case here," the order said.
Concluding that the search and seizure were lawful, the bench dismissed the petition, bringing an end to the family’s bid for immediate return of the seized valuables.
Case Title: Raj Krishan Gupta and Others v. Principal Director of Income Tax (Investigation)-1, New Delhi
Case Number: W.P.(C) 11005/2024
