2012 (6) TMI 503 - HC - Income Tax

Proceedings under s. 132A - seizure of the cash - petitioner was travelling allegedly in a jeep hired by him in District, Bhopal. The jeep was seized by the Station House Officer, Khajuri Sadak District Bhopal and cash amounting to Rs. 6.5 lacs was seized from the vehicle in which the petitioner was travelling - petitioner made certain allegations against the police officer who had seized the vehicle and the cash, and petitioner has tried to indicate that the police officer was trying to extract a bribe of Rs. 1 lac Held that - These amounts are received by the petitioner on 3rd June, 1994, 11th March, 1997 and on 7th Jan., 2001 and it is not known as to how and under what circumstances the amount received by the petitioner during the period of more than six years is kept by him or he is carrying the same amount along with him wherever he is going or was with him on 23rd Jan., 2001. The petitioner has to give a convincing explanation for the cash found in his person on 23rd Jan., 2001 and if the explanation is not convincing enough then no prima facie case is made out in the matter and interference into the matter by a Writ Court is not warranted. finding no merit in the claim made by the petitioner, the petition is dismissed

Summary

Issues:
Challenge to order under s. 132A of IT Act, 1961 based on seizure of cash from petitioner's vehicle; Delay in concluding proceedings causing harassment to petitioner; Petitioner's explanation for seized cash; Legal validity of proceedings under s. 132A; Quashing of proceedings under extraordinary jurisdiction of High Court.

Analysis:
1. The writ petition challenges an order under s. 132A of the IT Act, 1961, initiated based on the seizure of cash from the petitioner's vehicle. The petitioner alleged police misconduct and bribery attempts, leading to the initiation of proceedings by the IT Department. The petitioner sought quashing of the proceedings citing delay and harassment.

2. The petitioner argued that the investigation had prolonged for over 8 years, causing harassment, and disclosed the sources of the seized amount. The respondent Department contended that the investigation delay was due to a pending illegal order by the Sessions Judge and the petitioner's failure to explain the source of the cash adequately.

3. The Court analyzed the petitioner's explanation for the seized cash, which included compensation, land sales, and advances, spanning several years. The Court found the petitioner's explanation unconvincing, as it did not justify the possession of the seized amount on the day of the incident.

4. The Court emphasized that to quash proceedings under s. 132A, the petitioner must provide a reasonable justification for the possession of the seized amount. The delay in concluding the proceedings was attributed to the pending legal matters and not the respondent Department, thus not warranting quashing of proceedings.

5. Ultimately, the Court dismissed the petition, stating that the petitioner's explanation was insufficient to warrant interference. The Court clarified that its findings were provisional and would not hinder the petitioner in pursuing other legal remedies.

Conclusion:
The High Court dismissed the writ petition challenging the proceedings under s. 132A of the IT Act, 1961, emphasizing the need for a convincing explanation for the possession of the seized cash. The Court ruled that the delay in concluding the proceedings was not the fault of the respondent Department, thus not justifying the quashing of the ongoing investigation. The petitioner's claims of harassment due to the prolonged proceedings were not upheld, and the Court's decision was provisional, allowing for further legal recourse.