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TMI Blog2015 (12) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... on on record regarding the ownership of the silver to dispute the version of the assessee company. It was then fallacious on the part of the learned Judge of the lower Court, Badnagar, Ujjain to have entertained the application under Section 132-A of the ITA by the department. At the same time the fact drawn to the notice of this Court that the proceedings under Section 132-A (1)(c) of the ITA regarding assessment of the assessee company is still pending consideration before the Assessment Officer. We find that the learned Judge of the lower Court was right in considering the payment of security on production of silver bullion etc.and hence, there is no infirmity in the impugned order in this regard. The condition was imposed by way of abundant caution. Both the writ petitions are disposed of by holding that the impugned order dated 23/4/2014 is set aside and it is directed that fresh application be moved by the assessee company and liberty is granted to the Income Tax Department to move an application under Section 132-A, if it has come to any fresh information regarding the ownership of the silver bullion etc. - Writ Petition No. 4941/2014 & Writ Petition No. 6502/2014 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents Income Tax Department are the duty bound to release/return the assets since the requistion is valid only for 120 days. Counsel submitted that only if there was a demand of tax, interest or penalty outstanding the property could have been retained. Whereas nothing is outstanding against the present petitioners, Nayan Kothari,Rupam and Rajendra. All the liability of tax, interest and penalty as the case may be, have been paid. The seized cash and silver bullion have been deposited by the Police Authorities before the Court of JMFC. Counsel for the Income Tax Department has vehemently urged that by the impugned order dated 23/4/2014 the Lower Court, however, directed the Police Authorities, Badnagar to deliver the impugned cash and jewellery to the Income Tax Department. However, simaltatneously imposed several restrictions while delivering the possession of the impugned assets and cash to the Department. And these conditions have been challenged before this Court. Counsel for the Income Tax Department has vehemently urged the fact that requisitioning of the assets under Section 132-A of the Income Tax Act and thereafter when warrant of authorization is issued; it s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Cr.P.C. for the returning of the assets by the respondents Nayan Kothari and others has been rejected. Under the circumstances Income Tax Department was entitled to silver bullion items and cash without any such condition being imposed and it is only under these circumstances, the Income Tax Department has prayed for handing over the same without any security to the respondents. Whereas, the petitioners/respondents Nayan Kothari and others are aggrieved by the rejection of their application under Sections 451 and 457 of the Cr.P.C. since no tax was outstanding and proper bills and receipts were filed. 7. Counsel for the petitioner/Income Tax Department has vehemently urged the fact that besides the application by the Dy.Director (Investigation), Income Tax Department under Section 132-A)1)(c) of the Income Tax Act before the Additional C.J.M. Badnagar, Ujjain seeking possession of the silver bullion etc. It was also submitted that the Anti9 Evasion Bureau Commercial Tax Department had also moved an application before Additional CJM with respect to levy of commercial tax and penalty on the silver bullion seized by the police authority. The Assistant Commercial Tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conclusion, leading to an inference that it was income which would not have been disclosed by the person in possession for purpose of the Act. Counsel further relied on Ajit Jain vs. Union of India (Civil Writ Petition No.3756 of 1997 decided on 31/1/200 {equivalent citation (2000)159 CTR (Delhi); Counsel stated that mere information from the CBI to the Income Tax Authorities about the recovery of the cash from the petitioner could not constitute information within the meaning of Section 132 (1) of the ITA particularly when the petitioner had also stated that the entire money found in his possession was reflected in the books of account of the company and regularly assessed at Delhi. The Court has held that it was empowered to enquire into the existence of the information and its relevancy regarding search and seizure under Section 132-A of the ITA. 10. Finally, Counsel for the petitioner relied on the decision of our own Court in the matter of Director of Income Tax (Investigation) vs. Payal Selection and Company and others decided on 2/4/2008{equivalent citation (2008) 217CTR (MP) 378, whereby in almost similar case this Court was pleased, to consider the fact whether the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion whether the requisition issued by the respondent under Section 132-A (1)(c) before the JMFC, Badnagar Ujjain was maintainable. It is pertinent to note that in this case also that the law was set in motion under Section 132-A (1)(c) and also under the Criminal Procedure Code and not under the Income Tax Act alone, then this fact cannot be blinked away or marginalized and the question that whether the department has right to retain the assets under Section 132-A of the ITA has to be considered first. 13. It has been an admitted fact that a routine checking has been conducted during the Lok Sabha election in the year 2014 and M.P. Assembly election in the year 2013. Moreover, according to the requisition filed by the assessee petitioner, it clearly indicated from the books of accounts that the goods belonging to Rupam s/o Rajendra Gorecha and all necessary documents were filed before the Income Tax Department and the application under Section 132-A(1)(c) of the Income Tax Act was not at all justified. Considering the facts, we find that neither the police nor the Commissioner, Income Tax had at the stage of proceedings gathered any information on record regarding the ownership ..... X X X X Extracts X X X X X X X X Extracts X X X X
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