Jharkhand High Court
Santosh Singh vs Commissioner Of Income-Tax And Ors. on 19 December, 2000
Equivalent citations: [2001]248ITR532(JHARKHAND)
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
ORDER UNDER SECTION 132(1)(B)Revenue appropriated amount lying in petitioner's bank account after its seizure Catch Note: The revenue , after obtaining some information about the petitioner having undisclosed income and not paying tax under the Income Tax Act, 1961, carried out the search and in the course of search found an amount of rupees six lakhs lying in the account of the petitioner, which he was maintaining in the Bank--In terms of section 132(1) of the Act, it ordered seizure of the aforesaid amount as was discovered during the search operation carried out at the premises of the petitioner and the bank, because the revenue suspected that the aforesaid amount was the undisclosed income of the petitioner--It is under these circumstances that the seizure of the amount was ordered in terms of section 132(1)(b)(iii) of the Act--Later the Income Tax Department asked the bank to make over the aforesaid amount of rupees six lakhs to the Income Tax Department and in compliance of the panchnama issued by the Income Tax Department the bank actually made over the aforesaid money to the department--The petitioner submits that it was illegal and inappropriate on the part of the revenue to have taken the money even temporarily because the money could not have been taken until and unless an order under section 132(5) of the Act was passed--Not sustainable--It is for assessing officer to judge whether, after money has been seized, to allow it to remain in bank or at such other place or it will be in interests of revenue to remove it from there physically and to keep the same with Income Tax Department in the account of Central Government till an appropriate order is passed under sub-section (3) of section 132 of the Act. Held: It is permissible in law to do so. Let us take the example where a search is made at the residence of a person and some amount of undisclosed money is found there, which the revenue decides is liable to seizure in terms of section 132(1)(B)(iii) of the Act. In such a situation can the assessing officer not pass an order directing removal of the money physically from that house and appropriating to itself temporarily until an order is passed under sub-section (5) of section 132 of the Act by the assessing officer? Similarly, taking another example, suppose an amount of money is found elsewhere, say in the account of a private finance company but belonging to an assessee and the revenue is of the opinion that it is an undisclosed money, does the revenue have no power to ask the said finance company to make over to it the money found in such search operation. In such case is it obligatory under the law for the revenue only to pass an order under sub-section (3) of section 132 of the Act and not to remove the money physically from the place from where it has been seized? The assessing officer is the best judge to decide whether to issue an order under sub-section (3) of section 132 of the Act or to physically remove the money from where it has been seized, be it a residence or a bank or a finance company and to do so in exercise of the power under clause (iii) (supra). It is for the assessing officer to judge whether, after the money has been seized, to allow it to remain in the bank or at such other place or it will be in the interests of the revenue to remove it from there physically and to keep the same with the Income Tax Department in the account of the Central Government till an appropriate order is passed under sub-section (3) of section 132 of the Act. There can be instances and there can be cases where despite money being found in an account of an assessee maintained in a bank or in a private finance company, the revenue or the assessing officer is of the opinion that it is not safe to keep the money there and, therefore, any order passed under sub-section (3) of section 132 of the Act may be an exercise in futility and, therefore, the removal of the money alone will serve the interests of the revenue. Application: Also to current assessment year. Decision: In favour of revenue. Income Tax Act 1961 s.132 JUDGMENT Vinod Kumar Gupta, C.J.
1. By this common judgment, we propose to dispose of the two identical writ petitions analogously, because these relate to the same subject-matter and transaction.
2. Broadly speaking, two questions arise for consideration in these two writ petitions. Firstly, as to whether the Revenue was right in appropriating to itself temporarily the amount of rupees six lakhs seized by it during the search carried out at the premises of the petitioner until an order in terms of Section 132(5) of the Income-tax Act, 1961, was passed and, secondly, whether the search and seizure as ordered in terms of Section 132(1)(c) of the Act and the consequential orders passed under Section 132(5) of the Act by the Assessing Officer and the appellate order passed by the Commissioner under Section 132(12) of the Act were correct or not ?
3. Briefly stated, the facts giving rise to these writ petitions are that the Revenue, after obtaining some information about the petitioner having undisclosed income and not paying tax under the Income-tax Act, 1961, carried out the search and in the course of search found an amount of rupees six lakhs lying in the account of the petitioner, which he was maintaining in the Bank of India, Ranchi Main Road Branch. In terms of Section 132(1) of the Act, it ordered seizure of the aforesaid amount as was discovered during the search operation carried out at the premises of the petitioner and the bank, because the Revenue suspected that the aforesaid amount was the undisclosed income of the petitioner. It is under these circumstances that the seizure of the amount was ordered in terms of Section 132(1)(b)(iii) of the Act,
4. Later on, on May 30, 1990, the Income-tax Department asked the bank to make over the aforesaid amount of rupees six lakhs to the Income-tax Department and in compliance of the panchnama issued by the Income-tax Department the bank actually made over the aforesaid money to the Department.
5. Learned counsel appearing for the petitioner submits that it was illegal and inappropriate on the part of the Revenue to have taken the money even temporarily because the money could not have been taken until and unless an order under Section 132(5) of the Act was passed. According to him all that the Revenue could do Was to make an order in terms of Sub-section (3) of Section 132 of the Act, which empowers the Revenue to issue a direction to the holder of the money not to part with the money.
6. After hearing the detailed arguments of learned counsel appearing for the petitioner and learned counsel appearing for the Revenue and on consideration of all the relevant aspects of the matter and on application of the principles as emanating from various sub-sections of Section 132 of the Act, we are of the firm view that there was no disability in law whatsoever as far as the Revenue is concerned in appropriating to itself temporarily the money seized by it until an order is passed in terms of Sub-section (5) of Section 132 of the Act by the Assessing Officer, because, in our considered opinion, the expression "seizure" as occurring in Clause (iii) of Sub-Clause (B) of Sub-section (1) of Section 132 of the Act empowers the Revenue to remove the money from the place where it has been seized as a consequence of the search made in terms of Sub-section (1) of Section 132 of the Act.
7. We are saying so because we are of the firm opinion that it is permissible in law to do so. Let us take the example where a search is made at the residence of a person and some amount of undisclosed money is found there, which the Revenue decides is liable to seizure in terms of Section 132(1)(b)(iii) of the Act. In such a situation can the Assessing Officer not pass an order directing removal of the money physically from that house and appropriating to itself temporarily until an order is passed under Sub-section (5) of Section 132 of the Act by the Assessing Officer ? Similarly, taking another example, suppose an amount of money is found elsewhere, say in the account of a private finance company but belonging io an asses-see and the Revenue is of the opinion that it is an undisclosed money, does the Revenue have no power to ask the said finance company to make over to it the money found in such search operation. In such case is it obligatory under the law for the Revenue only to pass an order under Subsection (3) of Section 132 of the Act and not to remove the money physically from the place from where it has been seized ? Our view is that in all such cases the Assessing Officer is the best judge to decide whether to issue an order under Sub-section (3) of Section 132 of the Act or to physically remove the money from where it has been seized, be it a residence or a bank or a finance company and to do so in exercise of the power under Clause (iii) (supra). It is for the Assessing Officer to judge whether, after the money has been seized, to allow it to remain in the bank or at such other place or it will be in the interests of the Revenue to remove it from there physically and to keep the same with the Income-tax Department in the account of the Central Government till an appropriate order is passed under Sub-section (3) of Section 132 of the Act. There can be instances and there can be cases where despite money being found in an account of an assessee maintained in a bank or in a private finance company, the Revenue or the Assessing Officer is of the opinion that it is not safe to keep the money there and, therefore, any order passed under Sub-section (3) of Section 132 of the Act may be an exercise in futility and, therefore, the removal of the money alone will serve the interests of the Revenue.
8. The next question is about the search and seizure as ordered under Section 132(1)(c) of the Act. We have seen paras. 11, 12, 13, 14 and 15 of the counter-affidavit filed by the Revenue and found that the order of search cannot be called in question because the search was conducted in compliance with the requirements of Section 132 of the Act. Nothing has been brought to our notice by which the search or seizure can be questioned or challenged on any of the grounds mentioned in the said section.
9. We have also seen the order passed under Sub-section (5) of Section 132 of the Act by the Assessing Officer and also the order passed in appeal by the Commissioner of Income-tax under Sub-section (12) of Section 132 of the Act and found that these two orders do not suffer from any illegality or error or irregularity. The Assessing Officer in his detailed order passed on September 14, 1990, in terms of Sub-section (5) of Section 132 of the Act has clearly discussed all the relevant aspects of the matter and has come to a finding that the petitioner was guilty of keeping undisclosed income and since the money seized fell below the lax liability and the penalty as was assessed and charged by the aforesaid order dated September 14, 1990, it was allowed to be retained with the Revenue in terms of Sub-section (5) of Section 132 of the Act. The learned Commissioner of Income-tax has discussed all these aspects of the matter in his order under Sub-section (12) of Section 132 of the Act. No interference is called for in either of the aforesaid two orders.
10. Based on our aforesaid discussions, we do not find any merit in both the writ petitions, which, accordingly, are dismissed, but without any order as to costs.
M.Y. Eqbal, J.
11. I agree.