1998 (8) TMI 50 - HC - Income Tax

Summary

Issues:
1. Petition for quashing order releasing seized materials in a criminal case.
2. Interpretation of section 132A of the Income-tax Act, 1961.
3. Failure to exercise power under section 132A(1) of the Act.
4. Applicability of section 226(4) of the Act for payment of money.
5. Efficacious remedy for recovery of unassessed wealth under the Act.

Analysis:
1. The petitioner sought to quash an order releasing seized materials in a criminal case. The petitioner argued that the provisions of section 132A of the Income-tax Act were not properly considered. The case involved a seizure of wealth from the possession of an individual under various sections of the Indian Penal Code and the Bihar Money Lenders Act. The petitioner contended that unassessed wealth should have been handed over to the Income-tax Officer under section 132A.

2. The court examined section 132A of the Act, which deals with undisclosed income or property. It states that if authorities have reason to believe that assets represent undisclosed income, they can require delivery of such assets. The court noted that no requisition was sent to the seizing officer after the property seizure. The court emphasized that the power under section 132A should be exercised promptly after seizure, not during court proceedings.

3. The judgment highlighted the failure to exercise power under section 132A(1) in a timely manner. The court emphasized that the authority should have made a requisition to the police officer immediately after the seizure. The petitioner's invocation of section 132A(1) after the release order was deemed untimely by the court.

4. The court discussed the applicability of section 226(4) of the Act, which allows the Assessing Officer to apply for payment of money in custody for tax dues. However, in this case, where unassessed property was involved, section 226(4) was deemed inapplicable. The court noted that the Income-tax Department had initiated assessment and penalty proceedings against the individual.

5. The judgment concluded that there was an efficacious remedy for the recovery of unassessed wealth under the Act. The court found no reason to interfere with the impugned order, considering the legal provisions and circumstances of the case. The application was dismissed based on the availability of remedies under the Act for the Income-tax authorities.