1966 (11) TMI 95 - HC - Income Tax

Summary

Issues:
1. Application for safe custody of seized currency and gold.
2. Interpretation of Section 132 of the Income Tax Act.
3. Jurisdiction of the Special Magistrate.
4. Finality of court orders.

Analysis:

1. The application in revision was brought by the Inspecting Assistant Commissioner of Income Tax against the order of the Special Magistrate, who substantially dismissed the petition for the safe custody of currency and gold seized in connection with a criminal case. The search and seizure were conducted by the Special Police Establishment, and subsequent legal proceedings led to the application before the Special Magistrate.

2. Section 132 of the Income Tax Act provides for a special procedure for search and seizure in specific circumstances. The authorized officer is empowered to enter, search, and seize items like books of account, money, bullion, or jewelry. Sub-section (3) allows the officer to serve an order preventing the removal or dealing with the seized items without permission. In this case, no search was conducted by the authorized officer under Section 132 before the items were seized by the police during a criminal investigation.

3. The Special Magistrate, in considering the application, took into account the previous court order releasing the cash amount from custody, which had become final as there was no revision filed against it. Therefore, by the time the application under Section 132 of the Income Tax Act was made, the court had already dealt with and finalized the matter related to the cash amount. This led the court to conclude that it had become functus officio regarding the cash amount, and no further relief could be granted.

4. The court found that since the application was not maintainable in the court of the Special Magistrate due to the finality of the previous court order, there was no basis for a revision in the higher court. Consequently, the application for safe custody of the seized items was dismissed by the court, upholding the decision of the Special Magistrate based on the legal principles and interpretation of relevant provisions of the Income Tax Act.