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TMI Blog2013 (9) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... (d), IV (e), IV (f), IV(g), IV (h), IV (i) & IV (j); (b) to issue writ, order or direction in the nature of certiorari quashing the summon under Section 13 (1A) dated 06.10.2009 being Annexure - VI as issued by the respondent no.4. (c) to issue writ, order or direction in the nature of mandamus directing the respondents not to proceed further and/or take up any proceedings in consequence of warrant of authorization (where under seizure has taken place on 15/16.9.2009) by way of centralization of its case, issuing summons, notices, assessment, etc.; (d) to issue writ, order or direction in the nature of mandamus directing the respondents to restore the possession of cash amounting to Rs.4,90,000/- as belonging to it and as had been seized during the course of search and seizure action that had commenced on 15.9.2009; (e) to issue writ, order or direction in the nature of mandamus directing the respondents to restore the possession of jewellery weighing 251.360 gms valued at Rs.2,96,082/-, as had been seized during the course of search and seizure action that had commenced on 15.9.2009; (f) to grant exemplary damages to the petitioner for arbitrary and illegal action of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or state that part of information that might indicate source of the information. 132. We also clarify that: The Department has not claimed privilege under the Evidence Act as yet. It will also be open to the Department to claim privilege under section 123 or 124 of the Evidence Act; There are other points in the writ petition that we have not considered at this stage. They may be considered subsequently. 4. The Income Tax department has filed a Civil Appeal No.7840 of 2011 (Director General of Income Tax, North & others vs. M.D. Overseas Ltd) against the findings recorded by the Court in the judgment dated 4.2.2011. 5. The writ petition was kept pending with liberty to the department to claim privilege for disclosing the source of information under Section 123 or Section 124 of the Evidence Act. In paragraph 132 the Division Bench stated that there are other points in the writ petition and that the Bench has not considered at this stage. They may be considered subsequently. 6. An application no.115800 dated 13.4.2011 was filed by Shri S.K. Garg and Shri Ashish Bansal appearing for the petitioners with prayers to all the issues raised in the writ petitions, except the right o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is pending for consideration of the Court. 8. An application has been filed by the Income Tax department on 4.8.2011, supported by the affidavit of Ms. Balvinder Kaur, Deputy Director of Income Tax (Investigation), NOIDA claiming privilege for the unpublished material in public interest under Sections 123, 124 and 125 of the Evidence Act, 1872. 9. In order to meet the objections, that the affidavit has not been filed by the Head of Department, who has formed the opinion for claiming privilege, a supplementary affidavit of Shri Sada Shiv Bajpai, Director General of Income-tax (Investigation) UP & Uttrakhand at Lucknow has been filed, reiterating the averments in the affidavit of Ms. Balvinder Kaur on which the privilege has been claimed. 10. The Income Tax department has claimed privilege of disclosing the satisfaction note to the petitioner on the facts and grounds quoted as below:- "6. That in view of the aforesaid observations of this Hon'ble Court in the judgment and order dated 4th February, 2011, it is clear that in case the petitioner makes out a prima facie case against the validity of the search only then, subject to the privilege u/s 123 or 124 of the Evidence Act, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D and the actions are taken against money laundering terrorist financing and other related crimes, which cannot be divulged to any person except with the National Intelligence. Law Enforcement Agencies and various Financial Intelligence Units, as mentioned about the functions of FIU-IND which was set up by the Govt. of India Office Memorandum dated 18th November, 2004. 10. That the aforesaid information received from the Financial Intelligence Unit are unpublished official records and the same cannot be disclosed to any individual including the petitioner and his counsel inasmuch as it shall be against the public interest. 11. That the information has also been received from the Ministry of Corporate Affairs website and also discreet enquiries. The information was received from FIU-IND that the petitioner-company has imported Platinum bars worth several thousand crores of rupees and similarly imported gold valued about thousands crore of rupees, while the sale proceeds in domestic sales appears to be in cash. In these circumstances, the information received from Financial Intelligence Unit which is responsible for national and international intelligence, enforcement and investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious Transaction Reports (STRs) from various reporting entries. It is a Central National Agency for receiving, processing, analyzing and disseminating information relating to suspect financial transaction. The disclosure of the information received from the Financial Intelligence Unit are unpublished records, and the same could not be disclosed to any individual including the petitioner and his counsel inasmuch as it is against the public interest. Shri Bharat Ji Agarwal submits that the department has least objection in showing the satisfaction note to the Hon'ble Court, rather it has already been produced before the Hon'ble Court in a sealed envelop and can be produced again before the Hon'ble Court, if so desired. 12. Shri Ashish Bansal, on the other hand, submits that the information is relevant to the petitioner on which the search and seizure operations were carried out. The confidentiality of information is not a ground on which the privilege can be claimed under Sections 123 and 124 of the Evidence Act. He submits that block assessments have been made after the search operations in which only a small addition were made and in respect of which an appeal is pending. The peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at claim of privilege is not for bonafide purpose. 15. The balance sheet of the M.D. Overseas Ltd for financial affairs of the Company dealing in import of bullion including gold and platinum bars discloses Short Term loans from banks of Rs.1066,185,849.00 from overseas branch of Indian Bank, as buyers credit facilities. The entire bullion imported is sold by petitioner Company in cash. With an issued subscribed and paid up capital of Rs.9,66,200/- only and the net profit of only Rs. 13 crores. The information of large amount of cash transactions in foreign bank may have generally raised doubts in bonafide manner on the nature of transactions. A large amount of accounted black money is floating in the market which poses a serious threat to the national economy. The Government of India has adopted several methods to discouraging the parallel economy being run by unscrupulous persons. The Financial Intelligence Unit (FIU), Ministry of Finance, Government of India is engaged in collecting such information against the money laundering, terrorist financing and related crimes. The sources and methods of the organisation collecting and processing such sensitive information cannot be subj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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