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TMI Blog2025 (1) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... tworthiness of Mr. Vinay Sharma or any explanation why he made payments in cash. Given the nature of explanation, we find no infirmity with the decision of the Income Tax Authorities in not accepting the same. Thus, the petitioner s contention that the Income Tax Authorities had no reason to believe that the cash as seized was an undisclosed asset, is rejected. We find no infirmity with the decision of the Income Tax Authorities to issue the impugned requisition. Clearly, it is necessary for the authorities to examine the source of funds seized from the petitioner s premises. Whether the Income Tax Authorities can continue to retain the cash after more than twelve years have expired since the same was seized? - In terms of Section 153B(1)(a) of the Act, the assessment u/s 153A of the Act is required to be completed within a period of twenty-one months from the end of the financial year in which the requisition u/s 132A of the Act was executed. In the present case, the warrant u/s 132A (1) (c) of the Act was executed on 15.12.2016, thus, the Income Tax Authorities are required to complete the assessment within the time period stipulated u/s 153B(1)(a) which was required to be reckon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered to General V.K. Singh in connection with procurement of High Mobility Vehicles for the defence forces. The concerned authority believed that the petitioner was also involved in the said matter. 5. During the search proceedings, the currency amounting to Rs. 98,00,000/- along with certain other documents were found in the premises of the petitioner and the same was seized by CBI. 6. The petitioner s statement was recorded by the CBI on 22.10.2012 and he claimed that the seized cash belong to M/s Global Healthline Pvt. Ltd. a company of which he was a Director. The explanation offered by the petitioner was not found plausible by the CBI. The Superintendent, CBI sent a letter dated 02.01.2013 to the office of Director General (Investigation) of the Income Tax Department informing the said authority regarding seizure of cash of Rs. 98,00,000/- recovered from the petitioner s residence. 7. The Income Tax Department states that the said information was forwarded internally to the Director of Income Tax (Investigation)-1 on 10.01.2013 and was thereafter, forwarded to the Investigation Wing (IO) on 15.01.2013. It was contended on behalf of the respondents that the information forw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 15.12.2016 and therefore, the petitioner s assessment was required to be completed under Section 153A of the Act and not under Section 148 of the Act. Accordingly, the proceedings under Section 148 of the Act were dropped by an order dated 08.10.2018 and notice under Section 153A of the Act was issued for the relevant AYs on 08.10.2018. 16. In view of the above, this court permitted the petitioner to amend the writ petition. SUBMISSIONS 17. Mr. Ved Jain, the learned counsel appearing for the petitioner advanced submissions on, essentially, three fronts. First, he submitted that the impugned requisition was inordinately delayed as the Income Tax Department was fully aware of the seizure of the cash in the year 2012. He contended that the department was informed regarding seizure of the cash on 02.01.2013 and therefore could not form a basis. Second, he contended that the investigation had been completed and no chargesheet had been filed against the petitioner. Further, the petitioner had also explained the source of the seized cash and therefore, there was no reason to issue the impugned requisition under Section 132A of the Act. Lastly, he contended that the time for making an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RC AC1 2012 A 0014 has been registered on 19.10.2012 u/s 12 of PC Act 1988 against Lt. Gen (Reld.) Tejinder Singh on the allegation of offering a bribe of Rs.14 crores to Genl. V.K. Singh, The then COAS, to clear the file for procurement of 1676 HMVs (High Mobility Vehicles), including Tatra Vehicles. During the searches conducted at the premises of accused/suspect persons, cash amounting to Rs. 98 Lacs was recovered and seized from the residence of Sh Gautam Thandani, C-31 Mayfair Garden, Hauz Khas, New Delhi, which he could not satisfactorily account for. On the basis of information received by this office. Summons were issued to Sh. Gautam Thadani to explain the source to Rs.98 Lakh found and seized during the CBI search on 19.10.2012. As per to reply furnished by Sh. Gautam Thandani. He is managing director of Global Healthcare Pvt. Ltd. which is engaged in the business of running retail pharmaceutical shops. The company had 23 retail outlets in Delhi and Gurgaon and amounting to Rs. Rs. 52,70,000/- which forming part of Rs. 98,00,000/- (seized cash) was the cash sale proceeds of such pharmaceutical shops and kept with him. Another Rs. 18.50 lacs was advance against sale of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner or Principal Commissioner or 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 (11 of 1922), 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 and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or (b) any books of account or other documents will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (1) of this section and as if for the words the authorised officer occurring in any of the aforesaid sub-sections (4A) to (14), the words the requisitioning officer were substituted. 24. The concerned authority had sought authorization under Section 132A (1) (c) of the Act. 25. A plain reading of Section 132A of the Act indicates that the concerned authority can issue a requisition under the said section if the said authority, as a consequence of information in his possession, has reason to believe that any asset represents either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Act. Thus, the question whether the cash seized from the petitioner was undisclosed is required to be considered in the light of the explanation as provided by the petitioner. 26. According to the Income Tax Department, on 22.10.2012, the petitioner made a statement before the CBI to the effect that the entire cash belonged to a retail company (M/s Global Healthline Pvt. Ltd.) of which he was a director. The petitioner claimed that the said cash was part of the sale proceeds of over one and half months of the said retail company. 27. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income for the AY 2013-14 and tax on which was duly deposited. 29. The Income Tax Department was not convinced by the petitioner s explanation and in our view rightly so. 30. The explanation provided by the petitioner fails to give any particulars as to how much cash was collected by each concern and delivered to the petitioner. A bald statement that the petitioner had received cash of Rs. 52,70,000/- from his retail concerns (twenty-three in numbers) would clearly be insufficient to explain the source of the said cash. Absent any specific details as to how much cash was collected from each of the concerns, the date and time of the receipt of the same and who had delivered the same to the petitioner along with the necessary books of accounts to establish the same, it would be difficult to accept that the cash found in the petitioner s residence was on account of proceeds of sales collected from various outlets of a company in which the petitioner was a director. 31. The explanation that the petitioner has received further sum of Rs. 18,50,000/- towards refund of advance against sale of a vehicle, a transaction which admittedly was never consummated, is also unpersuasive. Whilst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Income Tax Authorities had no reason to believe that the cash as seized was an undisclosed asset, is rejected. We find no infirmity with the decision of the Income Tax Authorities to issue the impugned requisition. Clearly, it is necessary for the authorities to examine the source of funds seized from the petitioner s premises. 34. The third issue to be addressed is whether the Income Tax Authorities can continue to retain the cash after more than twelve years have expired since the same was seized. The Income Tax Department issued notice dated 08.10.2018 under Section 153A of the Act calling upon the petitioner to file his correct return of income for the AYs 2011-12 to 2016-17. Section 153A(1) of the Act posits that where a search is initiated under Section 132 of the Act or books of accounts, other documents or any assets are requisitioned under Section 132A of the Act, the AO shall issue a notice to such a person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b) of Section 153A(1) of the Act. In view of the above, we find no infirm ..... 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