mumbai the incometax department has the right to carry out a raid and attach property if it has reason to suspect that income is likely to escape tax net in absence of prompt action a division bench of the bombay high court has ruledthe division bench comprising justice ranajana desai and justice jp deodhar passed the order on may 7 2009 on a writ filed by mumbaibased genom biotech which is run by a nonresident indian binod kumarthe company had challenged the search carried out by the department on its premises in may 2008 and the subsequent attachment order it argued that there was no clear reason for the it department to carry out the raid because the three conditions that justify a tax raid did not exist in this casethe it act lists three conditions for such a search failure of the person to produce the required information even after summon was issued likelihood of a person failing in furnishing the required details or a person who is in possession of money jewellery or any valuable articles which represent the income not disclosed to the departmentthe division bench dismissed the companys contention saying that the department has furnished to the court the confidential information it had received before the raid and the satisfaction note it received before sanctioning the raid satisfaction note is a document prepared by the investigation wing of the it department which contains the reasons that justify a raidthe division bench also dismissed the argument that failure of the department to furnish a copy of the satisfaction note is a reason to hold the search invalid the bench observed that the information received by the department was that a sum of rs 170 crore paid by genom biotech to the ukcyprusbased companies purportedly for marketing expenses had actually been deposited in the private accounts of mr kumar the department also had information on fake bills and invoices fabricated by the company to facilitate the transfer of this amount on the basis of this information the department was right in presuming that the tax payer would not divulge the details of the undisclosed income the division bench accepted the departments view that satisfaction note contains confidential information including the name of the informer and disclosing the name would seriously prejudice the investigationthe court also pointed out that the it laws do not provide for disclosing the reasons recorded by the designated authority be disclosed to the tax payer