9911796707
TMI Blog1978 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 Kilogram 500 grams Gold Ornaments 858 grams Chandrika, son of Hardeo Silver Ornaments 84 Kilogram 700 grams Gold Ornaments 2 Kilogram 450 grams Triloki, son of Tekman Silver Ornaments 64 Kilogram 100 grams Gold Ornaments 7 Kilogram 39 grams Cash Rs. 47,350 (returned to Triloki Nath by the court). In pursuance of the search made on October 9, 1974, criminal proceedings were started before the Chief judicial Magistrate at Ghazipur. It, however, appears that during the pendency of the aforesaid proceedings before the Chief judicial Magistrate, the Superintendent of Police, Ghazipur, vide his letter dated November 26, 1975 informed the ITO concerned about the seizure of gold and other valuable articles from the premises of the petitioner No. 2 and Chandrika and Triloki. In the meantime in January, 1976, the Chief judicial Magistrate also wrote a letter to the ITO enquiring if he had any objection to the articles seized by the police being released. If was thereupon that the I. T. Inspector, Jaunpur, appeared before the Chief judicial Magistrate on January 28, 1976, and asked for an adjournment of the case to enable the Department to proceed in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, is in possession of money, bullions, jewellery or other valuable articles or things which represent either wholly or partly undisclosed income or property of the person ; further, I have reason to believe that the person is in possession of books of accounts or other documents relevant to income-tax assessments but he would not produce them before the ITO in normal proceedings. For the reasons noted above, I issue authorisation for search and seizure in this case." In pursuance of the aforesaid order of the Commissioner, a warrant of authorisation in Form No. 45-C was issued authorising Shri Pyarelal, ITO, to require the Treasury Officer, Ghazipur to deliver to the authorised person the books of account, other documents and assets as aforesaid. It also mentioned that the assets taken into custody by the Treasury Officer, Ghazipur, represented either wholly or partly income or property " which has not been or would not have been disclosed for the purposes of the Income-tax Act, 1961, by Sudarshan, son of Hardeo, Jagnipur from whose possession or control such assets had been taken into custody ". After obtaining the aforesaid authorisation, the I. T. Inspector, Jaunpur, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry as may be prescribed, shall, within ninety days of the seizure, make an order, with the previous approval of the IAC: " (i) Estimating the undisclosed income 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 ; (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, or this Act, as if the order had been the order of the 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 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), (iia) and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s s. 132A as it stands now, was inserted and the section which was originally numbered as s. 132A was re-numbered as s. 132B. The power to requisition books of account, assets, etc., now conferred by sub-s.(1) of s. 132A was previously contained in s. 132 itself. There was, however, a difference of opinion between some High Courts with respect to the power of seizure under sub-s. (1) of s. 132 regarding assets or documents which were in the custody of courts or in the custody of a department of Government or other authorities. In order to remove the lacuna pointed out by some of the courts that such power could not be exercised under s. 132, as it stood before the Taxation Laws (Amendment) Act, 1975, that s. 132 was amended by the aforesaid Amendment Act and the power of requisitioning the books of account, asset, etc., from the custody of the officer, court or other Governmental Authority was conferred by subs. (1) of s. 132A. Reverting to the argument of the learned counsel for the petitioner, that there was no material in the possession of the Commissioner to believe that the petitioner was possessed of undisclosed wealth, it may be pointed out that under s. 132A the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining the entire correspondence as well as the reasons recorded by the Commissioner for issuing the authorisation certificate. Once there exist reasonable grounds for the Commissioner to form the above belief, that would be sufficient to clothe him with jurisdiction to issue notice. Whether the grounds are adequate or not is not a matter for the court to investigate. The sufficiency of grounds which induced the Commissioner to act is, therefore, not a justifiable issue. It is, of course, open to the assessee to contend that the Commissioner did not hold the belief that there had been such non-disclosure. The existence of the belief can be challenged by the assessee but not the sufficiency of reasons for the belief. After a perusal of the counter-affidavits as well as the record, we are satisfied that there was material on the basis of which the authorisation certificate could be issued, and the seizure order made by the Commissioner was not based on irrelevant or extraneous considerations. Reference in this connection may be made to the letter dated March 26, 1976, written by the ITO, Jaunpur, giving details about the gold, silver and cash found from the possession of Sudarshan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 967] 63 ITR 219, while dealing with similar provisions of the Indian I.T. Act, 1922). As we are satisfied that the material supplied by the ITO to the Commissioner was such which could reasonably lead him (the CIT) to hold the belief required by s. 132A(c) of the Act, we are unable to uphold the submission made by the learned counsel for the petitioner on the first point. It was next contended by the learned counsel that as the petitioner bad disclosed the income by filing the returns on March 1, 1975, the present case was not a case where the Commissioner could hold that the assets re presenting income or property of the petitioner had not been or would not have been disclosed for the purposes of the Act. It is true that the power under cl. (c) of s. 132A can be exercised only when the belief is entertained by the Commissioner that the assets seized, represented wholly or partly income which had not been or would not have been disclosed for the purposes of income-tax. It appears difficult to accept that simply because the petitioners had filed the income-tax returns after the articles belonging to them had been seized on October 9, 1974, that they could get out of the mischief o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be defeated. Hence, it is not possible to uphold it. The third submission made by the learned counsel was about the non application of the mind by the authority to the relevant facts which could entitle him to exercise the power conferred by s. 132A. In this connection, the learned counsel pointed out that some of the ornaments seized, according to the report of the ITO itself, were pawned ornaments and, therefore, the same did not belong to the petitioner. Had the Commissioner applied his mind, he could not have come to the conclusion that the powers under s. 132A could be exercised in the present case. The submission made assumes that the Commissioner accepted that the seized ornaments were in fact the pawned ornaments. This is a controversial issue and would have to be gone into in the proceedings, which would be subsequently taken under the Act. It is not possible to say on the grounds suggested that the Commissioner had not applied his mind to the facts of the present case. It is no doubt true that s. 132A casts a duty on the Commissioner to apply his mind and to proceed to take action under it only when grounds for the same existed. Failure to carry out a duty impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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