1992 (3) TMI 3 - SC - Income Tax

The immunity does not extend to the moneys which are discovered by the department otherwise in pursuance of the normal provisions of the Act. The Special Bond Scheme, as has been clearly set out in the Press Note as well as in the statute, is completely independent of and does not affect the remedies and processes available to the Department under the provisions of the Income-tax Act.

Summary

The Supreme Court ruled in the case of Tej Bahadur Dube v. Commissioner of Income-Tax and Afzalunnissa Begum v. Union of India that the Income-tax Department was justified in seizing money intended for purchasing Special Bearer Bonds under section 132(1) of the Income-tax Act, 1961. The Court held that the immunity conferred by the Special Bearer Bonds Act does not extend to moneys discovered by the Department through normal provisions of the Act. The High Court's decision to dismiss the writ petitions was upheld, and the appeals were dismissed with costs of Rs. 2,500 each.