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TMI Blog1978 (1) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Nagpur, in pursuance of an authorisation issued by the Commissioner of Income-tax, Madhya Pradesh, under section 132A of the Income-tax Act, 1961. Thereafter, the Income-tax Officer, B-Ward, Itarsi, initiated proceedings under section 132(5) of the Act. A notice was issued to Ramlal Sharma who submitted that the ornaments belonged to him and the members of his family as follows : 1. Smt. Kanchanbai for Shri Narmada temple, ... 1,751 grams Hoshangabad and Dolaria 2. Bhawani Shankar Sharma ... 3,438 grams 3. Girija Shankar Sharma ... 2,825 grams 4. Dr. Sitasaran Sharma ... 1,578 grams 5. Kripashankar Sharma ... 645 grams 6. Mrs. Ramlal Sharma ... 737 grams 7. Ramlal Sharma ... 2,920 grams ------------------------- 13,894 grams ------------------------- Ramlal Sharma filed signed statements of the various members of the family before the Income-tax Officer. By order, dated 17th April, 1976, the Income-tax Officer held that the source of acquisition of the ornaments was satisfactorily explained to the extent of 5,582 grams as follows : Name of owner Quantity 1. Girija Shanker Sharma ... 1,450 grams 2. Dr. Sitasaran Sharma .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax authorities had themselves seized the articles from the persons from whom they were seized by the Central excise authorities. Sub-section (1) of section 132 empowers the Director of Inspection or the Commissioner, etc., to authorise search and seizure, when he has reason to believe that the conditions under clauses (a), (b) or (c) are satisfied. We are not here concerned with clauses (a) and (b). Under clause (c), the Director of Inspection or the Commissioner, etc., should have reason to believe that any person is in possession of any money, bullion, jewellery or other valuable article or thing, briefly referred to as the assets, which represent either wholly or partly income or property which has not been or would not be disclosed for the purposes of the Income-tax Act. Under sub-section (3), the officer authorised to make search and seizure may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of the assets, and any statement made by any such person during such examination may thereafter be used in evidence in any proceeding under the Act. When any assets are found in the possession or control of any pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in clauses (ii), (iia) and (iii) or any part thereof, the Income-tax Officer may, with the previous approval of theCommissioner, release the assets or such part thereof, as he may deem fit in the circumstances of the case. (6) The assets retained under sub-section (5) may be dealt with in accordance with the provisions of section 132B. (7) If the Income-tax Officer is satisfied that the seized assets or any part thereof were held by such person for or on behalf of any other person, the Income-tax Officer may proceed under sub-section (5) against such other person and all the provisions of this section shall apply accordingly. " Sub-section (5) of section 132 empowers the Income-tax Officer to estimate the undisclosed income, calculate the amount of tax on this income, determine the amount of interest and penalty payable, specify the amount of existing liability and to retain in his possession so much of the assets as are in his opinion sufficient to satisfy the aggregate of the tax, interest, penalty and existing liability and to return the remaining assets to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 132 is to be made ". The rule does not provide for notice to all persons who may claim to be the owners of the assets. It is to be taken note of that the inquiry contemplates under sub-section (5) is to be completed within 90 days. If the Income-tax Officer is held to be duty bound to notice each and every person who may claim to be the owner of the assets seized, it may not be possible to complete the inquiry within the statutory period. If, supposing, the person from whom the assets are seized informs the Income-tax Officer that the assets belong to B and B on being noticed informs that the assets belong to C and so on, the Income-tax Officer will find it difficult to complete the inquiry if all these persons are to be noticed and heard before an order under sub-section (5) is passed. This is another consideration which supports the construction adopted by us. We are fortified in our conclusion by a decision of the Gujarat High Court in Ramjibhai Kalidas v. I. G. Desai Income-tax Officer [1971] 80 ITR 721, 731, where Bhagwati C.J. (as he then was), referring to the words it " person concerned ", observed : " The ' person concerned ' would be the person in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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