2000 (12) TMI 91 - HC - Income Tax

Summary

Issues:
1. Appropriation of seized amount by Revenue until order under section 132(5) of the Income-tax Act, 1961.
2. Legality of search and seizure under section 132(1)(c) of the Act and subsequent orders under section 132(5) and 132(12) of the Act.

Analysis:
1. The first issue revolves around the temporary appropriation of rupees six lakhs seized by the Revenue during a search operation until an order under section 132(5) of the Income-tax Act, 1961, was passed. The petitioner argued that the Revenue had no authority to take the money temporarily without a specific order. However, the court held that the expression "seizure" empowers the Revenue to remove the money from the place where it was seized as a consequence of the search. The court emphasized that the Assessing Officer has the discretion to decide whether to physically remove the money or issue an order under sub-section (5) of section 132 of the Act. The judgment highlighted scenarios where physical removal of money serves the Revenue's interests, concluding that there was no legal impediment for the Revenue to appropriate the seized money temporarily.

2. The second issue concerns the legality of the search and seizure under section 132(1)(c) of the Act and subsequent orders under section 132(5) and 132(12) of the Act. The court examined the counter-affidavit filed by the Revenue and found that the search was conducted in compliance with the requirements of section 132 of the Act. No grounds were presented to challenge the search or seizure. Additionally, the court reviewed the orders passed by the Assessing Officer and the Commissioner of Income-tax under sub-sections (5) and (12) of section 132, respectively. Both orders were deemed legal, with the Assessing Officer finding the petitioner guilty of undisclosed income and allowing the money to be retained with the Revenue. The Commissioner of Income-tax also upheld these findings. Consequently, the court dismissed both writ petitions, concluding that there was no merit in the challenges raised.

In conclusion, the judgment addressed the issues of temporary appropriation of seized money by the Revenue and the legality of search and seizure actions under the Income-tax Act, 1961. The court clarified the powers of the Revenue in seizing and temporarily holding money, emphasizing the discretion of the Assessing Officer. Furthermore, the court found the search and subsequent orders to be legally sound, dismissing the writ petitions.