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TMI Blog1992 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated May 3, 1990, (annexure-35), of the Commissioner confirming the order of the Assistant Commissioner be quashed ; the gold, silver and cash seized by respondent No. 3 may be ordered to be returned to the petitioner. In the alternative, it has also been prayed that so far as imposition of penalty is concerned, the order of the Assistant Commissioner as confirmed by the Commissioner deserves to be quashed. In seeking the aforesaid reliefs two contentions have been raised by learned counsel for the petitioner. The first contention is that before conducting the search and seizing the assets (cash, silver and gold ornaments) no satisfaction as required under sub-section (1) of section 132 of the Income-tax Act of the officers menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nv.), Ahmedabad, a search at the residential premises of the petitioner and others was conducted. The Assistant Director (Investigation), Jaipur, though the petitioner has said that the search was conducted by the Assistant Commissioner, Income-tax Department, Circle Kota, seized the following valuables and cash: Rs. 1. Cash 1,25,000 2. Gold weighing 500 gms. valued at 1,50,000 3. Silver weighing 18 kg. valued at 78,000 In addition to the aforesaid there was some other gold and silver, but it was accounted for in the statement of the petitioner and the same were not seized. A notice under rule 112A of the Income-tax Rules, 1962 (for short, "the Rules"), was issued to the assessee requiring him to explain the nature of possession a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer mentioned under section 132(1) of the Income-tax Act records his satisfaction that he has reason to believe that any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been or would not be disclosed for the purposes of the Income-tax Act or when called upon to produce the account books and other documents which will be useful for or relevant to any proceedings under the Income-tax Act, such person would not produce the same. I had called upon learned counsel for the Income-tax Department to produce the file for perusal and the said file is produced and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 132(1) of the Income-tax Act and, therefore, in the facts and circumstances, I am unable to agree with learned counsel that it was a case where without recording that the Director (Investigation) has reason to believe, as said earlier, the search was conducted and seizure was made. I have purposefully avoided dealing with all the note-sheets because it will not be in the public interest, but I am satisfied that it is not a case where it can be said that the Director (Investigation) had not recorded that he has reason to believe as was required by him under section 132(1) of the Income-tax Act. Coming to the next contention of learned counsel that the penalty proceedings are independent proceedings from the assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (11 of 1922), or this Act ; (iia) determining the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act, as if the order had been the order of regular assessment; (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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 112A of the Rules. An enquiry has to be conducted and an order has to be made within 120 days of the seizure and that too with the previous approval of the Commissioner and in this case the order has been made with the prior approval of the Commissioner. The order has to be made under section 132(5) of the Income-tax Act (i) estimating the undisclosed income in a summary manner to the best of the judgment ; (ii) the amount of tax on the income so estimated as aforesaid has to be also estimated in accordance with the provisions of the Income-tax Act ; (iii) the amount of interest payable and the amount of penalty imposable in accordance with the provisions of the Income-tax Act has to be determined as if the order were an order of regul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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