Seized money as case property cannot be claimed by tax authorities unless it is shown to belong to the assessee.

Section 226(4) of the Income-tax Act permits the Income-tax Officer to seek payment only from money in court custody that belongs to the assessee. Where seized money is not proved to be the assessee's property and is treated as criminal case property, the criminal court must deal with it under section 452 of the Code of Criminal Procedure, 1973. A later tax demand does not convert such case property into money belonging to the assessee for section 226(4) purposes. The Department therefore had no entitlement to the seized money, and confiscation of the property to the State was upheld.

---

---

Issues: Whether the Income-tax Department could claim custody of seized money under section 226(4) of the Income-tax Act, 1961, when the money was treated as case property and was ordered to be confiscated to the State under section 452 of the Code of Criminal Procedure, 1973.

Analysis: Section 226(4) permits the Income-tax Officer to apply for payment only out of money belonging to the assessee and lying in court custody. The seized amount was not established to be the property of the accused, who did not claim it as his own, and the competing claim set up by another person was also rejected. Once the property was found to be case property, the criminal court was required to dispose of it under section 452 of the Code of Criminal Procedure, 1973. A tax demand raised after the seizure could not convert such case property into money belonging to the assessee for the purpose of section 226(4).

Conclusion: The Department had no right to the seized money under section 226(4) of the Income-tax Act, 1961, and the confiscation of the property to the State was upheld.

Final Conclusion: The appeal failed because the seized amount was not shown to belong to the assessee and was rightly dealt with as criminal case property.

Ratio Decidendi: The Income-tax Officer can claim money in court custody only if it belongs to the assessee, and where seized property is not proved to be the assessee's money, the criminal court may lawfully confiscate or otherwise dispose of it as case property.

---