Court dismisses Income Tax Department's petition challenging release of seized cash by police without proper requisition under section 132A.

The court dismissed the petition by the Income Tax Department challenging the Deputy Superintendent of Police's order releasing seized cash from individuals in a car. The court held that without a requisition under section 132A of the Act, the police had no authority to withhold the cash when no illegal activity was involved. Since no requisition was made, the release of the cash was deemed justified, and the Deputy Superintendent had imposed conditions for the individuals to appear and produce the amount when required by the Income Tax authorities.

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Issues:
Challenge to order of Deputy Superintendent of Police releasing seized cash without waiting for Income Tax Department's inquiry.

Analysis:
The case involved a petition by the Income Tax Department challenging an order passed by the Deputy Superintendent of Police releasing cash seized from two individuals in a car. The police seized the cash and other valuables from the car occupants, who claimed to be employees of an Angadia firm. The cash was withdrawn from bank accounts and was alleged to be wrongly seized. The police informed the Income Tax Department about the seizure and requested a responsible officer to be present before the Magistrate. The Income Tax Department had initiated proceedings under section 132 of the Act and issued summons to the individuals to appear and produce documents. The Deputy Superintendent of Police released the cash on certain terms and conditions despite the department's plea not to do so.

The department argued that the release of cash was hasty and should have awaited the outcome of their inquiry into the source of the cash. They contended that proper investigation was necessary before releasing the amount. On the other hand, the respondents' counsel argued that the source of the cash was explained, belonged to the Angadia firm, and full disclosure was made during scrutiny assessment by the Assessing Officer. They highlighted that no FIR was registered, and the police had no power to withhold the cash without any offense being disclosed.

The court observed that the Income Tax Department had not issued any requisition under section 132A of the Act regarding the cash in question. Without such requisition, the police had no authority to withhold the cash if it was not required for police purposes. The police had no power to withhold the amount when no illegal activity was involved, and no offense was registered against the individuals. The court emphasized that the competent authority could requisition the amount under section 132A if conditions were not satisfied. Since no requisition was made, the police had no basis to withhold the cash. The court also noted that the Deputy Superintendent had imposed conditions for the individuals to appear and produce the amount when required by the Income Tax authorities.

Ultimately, the court dismissed the petition, indicating that the release of the cash by the Deputy Superintendent was justified under the circumstances.

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