High Court Of Jharkhand
Sardar Santosh Singh vs. CIT & Ors.
Sections 132(1)(c), 132(1)(B)(iii), 132(5), 132(12)
Vinod Kumar Gupta, C.J. & M.Y. Eqbal, J.
Civil Writ Jurisdiction Case Nos. 1592 & 1881 of 1991
19th December, 2000
Counsel Appeared : Ajit Moitra, for the Petitioner : K.K. Jhunjhunwala, for the Respondents
VINOD KUMAR GUPTA, C.J. :
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 s. 132(5) of the IT Act, 1961, was passed and, secondly, whether the search and seizure as ordered in terms of s. 132(1)(c) of the Act and the consequential order passed under s. 132(5) of the Act by the AO and the appellate order passed by the CIT under s. 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 IT 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 s. 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 s. 132(1)(b)(iii) of the Act. Later on, on 30th May, 1990, the IT Department asked the bank to make over the aforesaid amount of rupees six lakhs to the IT Department and in compliance of the Panchnama issued by the IT Department the bank actually made over the aforesaid money to the Department. 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 taken the money even temporarily because the money could not have been taken until and unless an order under s. 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-s. (3) of s. 132 of the Act, which empowers the Revenue to issue a direction to the holder of the money not to part with the money.
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 s. 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-s. (5) of s. 132 of the Act by the AO, because, in our considered opinion, the expression “seizure” as occurring in cl. (iii) of sub-s. (B) of sub-s. (1) of s. 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-s. (1) of s. 132 of the Act. 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 s. 132 (1)(B)(iii) of the Act. In such a situation can the AO 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-s. (5) of s. 132 of the Act by the AO ? 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- s. (3) of s. 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 AO is the best judge to decide whether to issue an order under sub-s. (3) of s. 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 cl. (iii). It is for the AO 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 IT Department in the account of the Central Government till an appropriate order is passed under sub-s. (3) of s. 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 AO is of the opinion that it is not safe to keep the money there and, therefore, any order passed under sub-s. (3) of s. 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.
The next question is about the search and seizure as ordered under s. 132(1)(c) of the Act. We have seen paras 11, 12, 13, 14 & 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 s. 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. We have also seen the order passed under sub-s. (5) of s. 132 of the Act by the AO and also the order passed in appeal by the CIT under sub-s. (12) of s. 132 of the Act and found that these two orders do not suffer from any illegality or error or irregularity. The AO in his detailed order passed on 14th Sept., 1990, in terms of sub-s. (5) of s. 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 tax liability and the penalty as was assessed and charged by the aforesaid order dt. 14th Sept., 1990, it was allowed to be retained with the Revenue in terms of sub-s. (5) of s. 132 of the Act. The learned CIT has discussed all these aspects of the matter in his order under sub-s. (12) of s. 132 of the Act. No interference is called for in either of the aforesaid two orders. 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. : I agree.
[Citation : 248 ITR 532]