Section 132-A requisition needs reliable nexus to undisclosed income, while protective delivery conditions may still be imposed.

Requisition under Section 132-A requires reliable material showing a live nexus between the seized assets and undisclosed income, and it cannot be sustained on inadequate information. On the facts recorded, the silver bullion was supported by invoices and the Department lacked sufficient basis to treat the assets as undisclosed property, so the requisition challenge succeeded. A Magistrate may nevertheless impose a security or protective condition while directing delivery of seized assets to the Income Tax Department, as a safeguard pending unresolved competing claims; that condition was upheld as legally permissible.

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Issues: (i) Whether the requisition and continued retention of the seized cash and silver bullion under Section 132-A of the Income-tax Act were justified on the facts available. (ii) Whether the Magistrate could impose a security condition while directing delivery of the seized assets to the Income Tax Department.

Issue (i): Whether the requisition and continued retention of the seized cash and silver bullion under Section 132-A of the Income-tax Act were justified on the facts available.

Analysis: The requisitioning power under Section 132-A depends upon material showing a live nexus between the assets and undisclosed income. On the facts recorded, the seized silver bullion was supported by invoices and other material, and the record did not show sufficient information with the Department to justify treating the assets as undisclosed property. The matter was also considered in light of the earlier decision relied upon as governing the controversy.

Conclusion: The requisition was not sustainable on the material then available, and the assessee's challenge succeeded on this aspect.

Issue (ii): Whether the Magistrate could impose a security condition while directing delivery of the seized assets to the Income Tax Department.

Analysis: Once custody of seized property is directed to be delivered, the Magistrate may regulate the mode of delivery and impose protective conditions as a measure of caution, especially where competing claims to the property remain unresolved. The condition was treated as a safeguard and not as a substantive determination of ownership.

Conclusion: The security condition was not found to be legally infirm.

Final Conclusion: The impugned order was set aside, and the matter was left open for a fresh application with liberty to the Department to act upon any fresh information regarding ownership of the seized assets.

Ratio Decidendi: Requisition under Section 132-A requires reliable information linking the property to undisclosed income, and in the absence of such material the requisition cannot be sustained; ancillary protective conditions may still be imposed when custody of seized assets is directed to be delivered.

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