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Issues involved: Jurisdiction of the Magistrate to hand over seized property under the I.T. Act, ownership of seized assets, authority to possess seized assets.
The judgment by Judge P. N. Bakshi of the High Court Allahabad addressed the issue of jurisdiction of the Magistrate to hand over seized property under the I.T. Act. The Station Officer informed the Commissioner of Income-tax about the seizure of currency notes and clothes from an individual, leading to a legal challenge under relevant sections. The Commissioner issued warrants of authorization under s. 132A of the I.T. Act for the assets' possession. The Magistrate's order directing the delivery of assets to a third party was challenged by the Union of India, arguing that the Magistrate lacked jurisdiction in such matters. On the other hand, the opposite party contended that the Magistrate was competent to decide the ownership of the assets under s. 457 of the Cr. PC. Regarding the legal question, the judgment referred to relevant sections of the I.T. Act. Section 132(1)(c) deals with search and seizure of undisclosed income, while s. 132(a) pertains to seizure of assets by any officer under other laws. The inquiry under s. 132(5) involves affording a reasonable opportunity to the concerned persons and passing orders within 90 days. Section 457 of the Cr. PC outlines the procedure for the disposal or delivery of seized property by the Magistrate. The judgment emphasized that the I.T. Act, being a specialized law, overrides general laws like the Cr. PC in matters of asset seizure and inquiry. The judgment highlighted that the Requisitioning Officer, as per s. 132A of the I.T. Act, is entitled to seized assets. The assets seized by the G.R.P. were to be delivered to the Requisitioning Officer, not subject to the Magistrate's inquiry into ownership. The Magistrate's role was to release the assets to the authorized officer for further inquiry under s. 132(5) of the I.T. Act. The judgment emphasized the need for the ITO to complete the inquiry within 90 days and return remaining assets to the rightful owner after tax deduction, if applicable. In conclusion, the judgment allowed the revision application, setting aside the Magistrate's order and directing the delivery of seized assets to the authorized officer for inquiry under s. 132(5) of the I.T. Act. The decision clarified the jurisdictional aspects and the proper authority for possession of seized assets in accordance with the law.
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