Search-and-seizure limits under income tax law do not justify delivery of court-held currency notes without statutory basis.

Section 132 of the Income-tax Act permits seizure only after an authorised search of a building or place, and section 132(3) applies only where immediate seizure after such search is impracticable. On the facts, the currency notes in court custody were not shown to have been found in a search by the authorised officer, and the case did not fall within the limited scope of section 132(3). The Magistrate therefore had no basis to hand over the money to the Income-tax Officer for investigation, and the refusal to deliver the currency notes was upheld.

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Issues: Whether the Income-tax Officer was competent to claim delivery of currency notes lying in court custody under section 132 of the Income-tax Act, 1961, and whether the Magistrate was bound to make over the money for investigation.

Analysis: The power under section 132(1)(iii) arises only after an authorised search of a building or place and seizure of articles found as a result of such search. Section 132(3) applies only where, after such search, it is not practicable to seize the articles then and there. The judgment distinguished the cases cited on behalf of the petitioner, as those decisions involved wider seizure powers under preventive detention, foreign exchange, or customs legislation. The currency notes in court custody were not shown to have been found in a search conducted by the authorised officer, nor did the facts bring the matter within the limited reach of section 132(3). The Magistrate therefore had no basis to deliver the property to the Income-tax Officer for investigation.

Conclusion: The Income-tax Officer was not competent to obtain delivery of the currency notes under section 132 of the Income-tax Act, 1961, and the Magistrate's order refusing to hand over the amount was upheld.

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