2009 (11) TMI 341 - SC - Income Tax

Investigation- In the present case appellant is the passenger he comes in India from abroad. He want to purchase a house in Chennai for this purpose it was required that the payment was made by cash. He take the permission of RBI and his banker. When he reached the airport the money was seized by the income tax officers by assuming that it earn from illegal sources. After 2 months, after verifying all the documents they return back the money without interest. Thus the appellant filed an appeal in Andhra Pradesh High Court but it reject it as it has no jurisdiction to entertain it. Now he filed this appeal to Chennai High Court. Held that- any bonafides measures taken in public interest, and to provide public safety or to prevent circulation of black money could not be objected to as inference with personal liberty or freedom of the citizen. The appellant is not entitled to any further relief in the matter. The effort of the Ld. Solicitor General to finds a solution to reduce the hardships of the traveling public without compromising the security/intelligence concerns required to be appreciated.

Issues Involved:
1. Jurisdiction of Andhra Pradesh High Court.
2. Illegal detention and seizure by Income-tax officials.
3. Delay in returning seized money.
4. Premature disclosure to the media.

Detailed Analysis:

1. Jurisdiction of Andhra Pradesh High Court:
The primary issue was whether the Andhra Pradesh High Court was justified in dismissing the writ petition on the ground of lack of jurisdiction. The High Court did not examine whether any part of the cause of action arose in Andhra Pradesh. The Supreme Court clarified that under Clause (2) of Article 226, the High Court has jurisdiction if any part of the cause of action arises within its territory. In this case, the genesis of the episode was the action of the security/intelligence officials at Hyderabad airport, which gave rise to a part of the cause of action in Andhra Pradesh. Therefore, the High Court should not have rejected the writ petition on jurisdictional grounds.

2. Illegal Detention and Seizure by Income-tax Officials:
The appellant's grievances included his illegal detention for more than 15 hours at Chennai airport, illegal seizure of cash despite providing explanations and supporting documents, and the coercion to sign papers without reading them. The Supreme Court acknowledged the appellant's right to carry money, but emphasized the need for verification by the authorities to ensure the money was not intended for illegal purposes. The Court found the actions of the officers to be bona fide and in the course of their official duties, given the legitimate suspicion created by carrying such a large sum of money. The Court ruled that the appellant's rights had to yield to public interest and safety concerns, and thus, no compensation was warranted for the detention and seizure.

3. Delay in Returning Seized Money:
The appellant also complained about the delay in returning the seized money, which took more than two months. The Supreme Court noted that the delay was due to the need for thorough investigation and verification of the appellant's claims. The Court found this delay to be justified given the circumstances and the need to ensure that the money was not intended for any illegal activities.

4. Premature Disclosure to the Media:
The appellant's grievance regarding the premature and malicious disclosure to the media was acknowledged by the Supreme Court. The Court criticized the tendency of investigating officers to inform the media prematurely, which can jeopardize investigations and harm individuals' reputations. The Court emphasized the need for confidentiality and cautioned against such premature disclosures.

Guidelines Issued by Central Board of Direct Taxes:
To address the appellant's concerns and prevent future harassment of passengers, the Central Board of Direct Taxes issued a circular with guidelines for Air Intelligence Units and Investigation Units. These guidelines include procedures for conducting enquiries and searches, obtaining warrants, recording statements, and ensuring the humane treatment of passengers during investigations. The guidelines also emphasize the need to avoid premature disclosures to the media.

Conclusion:
The Supreme Court appreciated the efforts of the Solicitor General in addressing the appellant's concerns and finding a solution to reduce the hardships of the traveling public without compromising security and intelligence concerns. The Court disposed of the appeal, treating the entire episode as closed, and noted that the remedial action by the Department and the expression of regret achieved the purpose of the appellant's writ petition. The appellant was not entitled to any further relief in the matter.

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