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TMI Blog1973 (2) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,02,500 and gold coins, sikkas, and ornaments weighing 812.400 gms. were seized by the Central Excise authorities. By an order passed on 18th December, 1971, the Collector of Customs and Central Excise held that the currency notes of Rs. 2,02,500 and the gold ornaments weighing 361.450 gms. had not offended any provisions of the Gold Control Act, 1968. As regards gold coins and sikkas, contraventions of the provisions of the Act were found and appropriate orders were passed in that behalf. The currency notes of Rs. 2,02,500, and the gold ornaments were ordered to be released. On 4th December, 1971, the Commissioner of Income-tax, Madhya Pradesh, Nagpur and Bhandara, issued a warrant of authorisation under section 132(1) of the Income-tax Act, 1961, in favour of the Income-tax Officer, B-Ward, Chhindwara, and other officers to search and seize money, bullion, jewellery, etc., of the petitioner-firm which was to be found at the office of the Collector of Customs and Central Excise, Nagpur. In pursuance of the authority derived from the warrant of authorisation, the Income- tax Officer, B-Ward, Chhindwara, issued an order under section 132(3) of the Income-tax Act on 17th Decembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the notes were not in possession of the petitioners as by the seizure under the Gold Control Act possession of the notes had passed from the petitioners to the Collector of Customs and Central Excise and for this reason also section 132 of the Act was not attracted. The contentions raised depend upon the true construction of section 132 of the Act, the relevant clauses of which read as follows : " 132. (1) Where the Director of Inspection or the Commissioner, in consequence of information in his possession, has reason to believe that (a) any person to whom a summons under sub-section ( 1) of section 37 of the Indian Income-tax Act, 1922 (XI of 1 922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as may be prescribed, shall, within ninety days of the seizure, make an order, with the previous approval of the Commissioner, (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him ; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (XI of 1922), or this Act ; (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized : Provided that if, after taking into account the materials available with him, the Income-tax Officer is of the view that it is not possible to ascertain to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for search and seizure of the same. The expression " has reason to believe " itself signifies that the Commissioner has reason to be satisfied that the things to be searched are in the possession of a particular person. It would be anomalous to hold that if the Commissioner is not sure about the possession of money, bullion, etc., he can exercise his powers under section 132 for search and seizure, but when he is sure that the undisclosed income in the shape of money, bullion, etc., is in the possession of a person, he cannot exercise his powers of search and seizure. The object of section 132 is not merely to get information of the undisclosed income, but also to seize the money, bullion, etc., representing the undisclosed income and to retain them for purposes mentioned under section 132(5). The construction that the learned counsel for the petitioners wants us to accept gives no importance to the words " has reason to believe " and to the object of the section and depends solely on the literal meaning of the word " search ". We are unable to accept it. We are also unable to accept the contention that the power under section 132(1)(c) cannot be exercised where the thing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of compulsion of the law under which the warrant is issued. How far a person in possession of a thing would resist search and seizure under section 132(1)(c) of the Income-tax Act cannot be anticipated from before and, therefore, it is difficult to accept the argument that if it is expected that the person in possession would easily yield up his possession, no warrant for search and seizure can be issued. Learned counsel for the petitioners invited our attention to the various powers which can be exercised by a person in whose favour authorisation is issued. For example, the person authorised by the Commissioner of Income-tax can enter and search any building, break open the lock of any door, box, locker, etc. But that does not mean that in every case the person authorised by the warrant will have to exercise all these powers in making the search and seizing the thing required. These powers have been conferred upon the income-tax authorities to cover all types of cases and if in a particular case the person who is in possession of the thing required to be searched and seized does not resist the authority of the warrant and yields up the thing which is seized, it cannot be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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