Prohibitory order under income-tax search powers upheld where completion was impracticable, and police-initiated prosecution escaped sanction bar.

Section 132(3) of the Income-tax Act was treated as valid where a search under section 132(1) could not be completed as a matter of practicability, with "not practicable" read as impracticability rather than absolute impossibility. Sanction under section 279 was held unnecessary where prosecution was initiated by the State on a police report and not as a departmental prosecution at the Commissioner's instance. On the evidence, witness testimony and contemporaneous documents established breach of the prohibitory order, criminal breach of trust and mischief, and the convictions under the Income-tax Act and the Penal Code were sustained.

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Issues: (i) Whether sanction under section 279 of the Income-tax Act was necessary and whether the prohibitory order under section 132(3) of the Income-tax Act was without legal foundation. (ii) Whether the evidence established contravention of the prohibitory order and the allied offences under the Indian Penal Code.

Issue (i): Whether sanction under section 279 of the Income-tax Act was necessary and whether the prohibitory order under section 132(3) of the Income-tax Act was without legal foundation.

Analysis: Section 279 bars prosecution under section 275A at the instance of the Chief Commissioner or Commissioner, but that restriction applies where the prosecution is launched in the manner contemplated by the Act. Here, the prosecution was initiated by the State on the basis of a police report, and not as a departmental prosecution at the instance of the Commissioner. The Court also held that an authorisation under section 132(1) contemplates a continuous process of entry, search, enquiry, seizure and inventory, and where completion of the search is not practicable, section 132(3) can validly be invoked. The expression "not practicable" was treated as referring to impracticability rather than absolute impossibility.

Conclusion: Sanction under section 279 was not required on these facts, and the prohibitory order under section 132(3) was valid.

Issue (ii): Whether the evidence established contravention of the prohibitory order and the allied offences under the Indian Penal Code.

Analysis: The testimony of the witnesses, supported by the complaint and panchanamas, established that the almirah was intact when the articles were placed inside it and that, on the next day, it was found cut at two places with missing articles and a lowered level of jewellery bags. Non-production of the almirah and supratnama did not discredit the prosecution because the oral and documentary evidence was found cogent and consistent. The accused was found to have removed the articles while they remained in his custody and to have damaged the almirah with the intention to commit mischief. These facts constituted breach of the prohibitory order and also supported criminal breach of trust and mischief.

Conclusion: The offences under section 275A of the Income-tax Act and sections 406 and 461 of the Indian Penal Code were proved.

Final Conclusion: The acquittal was set aside, and the accused was convicted and sentenced for the proved offences with substantive sentences directed to run concurrently.

Ratio Decidendi: Where a search under section 132 of the Income-tax Act cannot be completed as a matter of practicability, a prohibitory order under section 132(3) is valid, and a prosecution launched by the State on a police report is not defeated by the absence of Commissioner sanction under section 279.

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