Invalid Requisition Under Income-tax Act Leads to Quashing of Order

The court found the requisition under section 132A of the Income-tax Act invalid as it lacked necessary material for a "reason to believe." The requisition did not comply with procedural requirements, rendering subsequent notices under section 153A and 153C meaningless. The Assistant Commissioner's order was deemed legally untenable, leading to its quashing along with related notices. The court stressed the importance of meeting statutory requisites and having a reasonable basis for requisitions.

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Issues Involved:
1. Validity of the requisition under section 132A of the Income-tax Act, 1961.
2. Compliance with procedural requirements for issuing requisition.
3. Legal tenability of the Assistant Commissioner's order dated July 25, 2012.
4. Impact on subsequent notices issued under section 153A read with section 153C.

Detailed Analysis:

1. Validity of the requisition under section 132A of the Income-tax Act, 1961:
The petitioner challenged the validity of the requisition issued under section 132A of the Act, arguing that it lacked the necessary material or information to justify the formation of a "reason to believe" as required by the statute. The court examined the requisition notice and found that it did not contain any averment or material indicating that the authority had a reason to believe that the assets were undisclosed income. The requisition merely stated that the assets taken into custody by the police represented undisclosed income but did not specify any books of account or documents, nor did it record any satisfaction for issuing such a requisition.

2. Compliance with procedural requirements for issuing requisition:
The court emphasized that Rule 122(d) of the Income-tax Rules mandates that the requisition under section 132A(1) should be in writing, signed by the issuing officer, and in Form 45C. The requisition must include the information on which the authority's belief is based. In this case, the requisition notice failed to comply with these procedural requirements. It did not specify the books of account or documents sought, nor did it mention the information or material that led to the formation of the belief. The court held that the requisition notice did not fulfill the requirements of section 132A(1) and Rule 112D(2).

3. Legal tenability of the Assistant Commissioner's order dated July 25, 2012:
The court scrutinized the Assistant Commissioner's order and found it legally untenable. The order was based on a requisition that did not comply with the statutory requirements. The court referred to previous judgments, including Vindhya Metal Corporation v. CIT and Manju Tandon v. T. N. Kapoor, which established that mere possession of unexplained cash without additional material is insufficient to form a belief of undisclosed income. The court reiterated that the belief must be reasonable and based on relevant material available at the time of issuing the requisition.

4. Impact on subsequent notices issued under section 153A read with section 153C:
Given the invalidity of the requisition under section 132A, the court concluded that the subsequent notices issued under section 153A read with section 153C were rendered meaningless. The court quashed the Assistant Commissioner's order dated July 25, 2012, and all consequential notices issued on May 10, 2012. However, the court clarified that this decision would not affect any regular assessment proceedings regarding the income of the petitioner's husband, which may be pending before the authorities.

Conclusion:
The court allowed the writ petition, quashing the order dated July 25, 2012, and the consequential notices issued under section 153A read with section 153C. The judgment emphasized the necessity of adhering to the procedural requirements and having a reasonable basis for issuing requisitions under section 132A of the Income-tax Act, 1961.

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