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TMI Blog1974 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... rders under sub-section (3) of section 132 were issued to the bank restraining it from parting with or allowing the contents to be removed. Sub-section (5) of section 132 of the Act provides that the Income-tax Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed, shall within ninety days of the seizure, make an order, with the previous approval of the Commissioner, estimating the undisclosed income and calculating the amount of tax in terms of the sub-section on this income and specifying the amount that would be required to satisfy any existing liability under the Act. The sub-section further provides that the Income-tax Officer shall retain in his custody the seized assets or part thereof as are in his opinion sufficient to satisfy the dues so calculated "and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized ". The petitioner contends that the contents of the two lockers were seized by the authorised officer but after seizure of these assets the Income-tax Officer failed to make an order within the prescribed period of ninety days and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assets seized from the almirah from the residence of the petitioner are concerned, there is no dispute between the parties to the petition because it is admitted that on February 23, 1973, a notice under section 132 of the Act read with rule 112A of the Income-tax Rules, 1962, was issued to the petitioner and it is stated at the Bar that an assessment has also been made which is the subject-matter of a pending appeal. It appears that on February 7, 1973, when the two lockers were opened, two panchnamas and two separate lists of articles found in them were also prepared. Annexure R 10(i) is the panchnama and annexure R/3 is the list of articles found in locker No. 2046. Annexure R 11(i) and annexure R/4 are the panchnamas and the list of articles relating to locker No. 1799. Copies of two statements of the petitioner recorded in respect of the contents of each one of the lockers have also been filed with the counter-affidavit as annexure R/5 and annexure R/6. The sole contention raised in support of the relief before us is that in the facts stated the contents of the lockers should be held to have been seized within the meaning of section 132(1) and no order under sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922, or under this Act. (5) Where any money, bullion, jewellery or other valuable article or thing (hereinafter in this section and section 132A referred to as the assets) is seized under sub-section (1), the Income-tax Officer, after affording a reasonable opportunity to the person concerned for being heard and making such enquiry 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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any officer mentioned in the sub-section in circumstances mentioned therein. By this authorisation, the authorised officer has the power to enter upon or search any building, break open the lock, etc., in terms of clauses (i) and (ii) of the sub-section. By clause (iii) the authorisation also invests him with the power to seize money, bullion or jewellery or other valuable article found as a result of the search and to make a note or an inventory of the same. Sub-section (3) then envisages a situation where seizure is not practicable. In such a case the authorised officer is empowered to serve an order on the owner or the person who is in immediate possession or control of the said articles that he shall not remove, part with or otherwise deal with the said articles except with the previous permission of such officer and to take such further steps as may be necessary to ensure compliance with the sub-section. These provisions unmistakably show that the exercise of power conferred by sub-section (3) of section 132 does not tantamount to seizure. In respect of the seized assets, section 132A, which follows section 132, provides that the assets retained under sub-section (5) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the safe custody of the seized articles and package or packages. He may deposit for safe custody all or any of them with any branch of the Reserve Bank of India or the State Bank of India or its subsidiaries or a Government Treasury. In case of cash seized, clause (iii) of sub-rule (12) provides that the Custodian may credit this money, or remit the same through the nearest Government Treasury for being credited in the Personal Deposit Account of the Commissioner in the Government Treasury at the place where the office of the Commissioner is situate. Sub-rule (13) prescribes that whenever any sealed package is required to be opened for any of the purposes of the Act, the authorised officer may break any seal and open such package in the presence of two respectable witnesses after giving a reasonable notice to the person from whose custody the contents were seized to be present who, according to clause (ii) of the sub-rule, will be entitled to remain present till all or any of the contents of such package are placed in a fresh package or packages and sealed in the manner specified in the Rules. No definite mode of " seizure " under sub-section (1) of section 132 is prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned Magistrate held that the provisions of section 178A of the Sea Customs Act were attracted to the case so that the gold recovered from the appellant was the gold "seized" under this provision of the Sea Customs Act and the burden according to this provision had shifted on to the accused. The Supreme Court disagreed with this view because it held that the delivery of the gold to the Customs authorities by the Magistrate under the latter part of section 180 of the Sea Customs Act was not "seizure" under the Act within the meaning of section 178A as "seizure" under the Act necessarily involved a deprivation of possession of the accussed. The court said: "When the goods were seized by the police they ceased to be in the possession of the accused and passed into the possession of the police and when they were with the Magistrate it is unnecessary to consider whether the Magistrate had possession or merely custody of the goods. The suggestion that the goods continued to be, at that stage, in the possession of the accused does not embody a correct appreciation of the law as regards possession. A 'seizure' under the authority of law does involve a deprivation of possession an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of sub-section (3) of section, 132, namely, steps considered by him to be necessary to obtain compliance with the sub-section. The case of Jawahar Lal Rastogi cited by Shri Tarkunde does not help the petitioner. In this case it was admitted by the appellant, Commissioner of Income-tax, that the account books of the respondent had been " seized " under section 132 of the Act. The court, therefore, held that the retention of the seized books for a period exceeding the prescribed 180 days was without the authority of law and contrary to the terms of section 132(8) of the Act. It may specifically be noticed that the petitioner has neither challenged before us the legality of the action taken by the authorised officer nor has she attributed any mala fides to him and we are not called upon in this case to decide whether, in the facts before him, the authorised officer had no just cause for his view that the seizure was impracticable. We should also not be understood to mean that the authorised officer has an unfettered discretion in the matter and has a right to indefinitely keep under seal and detain the goods found during search by recourse to section 132(3) of the Act. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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