1990 (11) TMI 82 - HC - Income Tax

Summary

Issues:
1. Jurisdiction of the Income-tax Department to seize amounts deposited in court under section 132A of the Income-tax Act.
2. Interpretation of the term "authority" in section 132A of the Income-tax Act.
3. Legitimacy of the order passed by the Magistrate under section 451 of the Criminal Procedure Code.

Analysis:
The judgment revolves around the arrest of an individual found in possession of a significant amount of money, which was later deposited in court. The Inspector of Police arrested the individual and the amount was credited to the criminal court deposit. Subsequently, the petitioner filed a petition seeking the return of the seized amount. The Assistant Director of Inspection from the Income-tax Department also filed an application under section 451 of the Criminal Procedure Code, along with sections 132 and 132A of the Income-tax Act, requesting the return of the money to the department. The Magistrate, after considering the arguments, ordered the return of the amount to the Income-tax Department, leading to the petitioner challenging this decision.

The petitioner's counsel argued that income-tax authorities lacked the power to seize the amount deposited in court, citing section 132A of the Income-tax Act. The counsel contended that the term "authority" in the Act did not encompass the court, thus the Magistrate's order should be set aside. Conversely, the counsel representing the Income-tax Department refuted this argument. It was clarified that the Assistant Director of Inspection did not seize the amount from court custody but filed an application under section 451, Criminal Procedure Code, seeking the return of the money seized by the police and deposited in court as undisclosed income. The court's order was based on this application, and the legality of the order was defended on the grounds that the Income-tax Department was entitled to request the return of seized property under section 451 of the Criminal Procedure Code.

The judgment emphasized that the situation did not involve the Assistant Director of Inspection seizing the amount directly from court custody, which would have necessitated an interpretation of the term "authority" in section 132A of the Income-tax Act. Since the order was passed based on a request from the Income-tax Department under the relevant legal provisions, the Magistrate was deemed authorized to order the return of the seized amount to the department. Therefore, the petition challenging the order was dismissed, affirming the legitimacy of the Magistrate's decision to return the money to the Income-tax Department.