TaxTMI 
TaxTMI 
TaxTMI 
2005 (9) TMI 37
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....ion, the police party found in the car currency notes kept in a box. The police then seized the box and the notes which on being counted were found to be of the value of Rs. 30 lakhs. A panchanama (annexure P-2) was then prepared and after carrying out this seizure operation, the police (S.H.O) informed the Income-tax Department (respondents herein) about the seizure of Rs. 30 lakhs. By letter, dated April 2, 2003 (annexure P-3), impugned in this petition, respondent No. 1 directed the station house officer not to return the said amount so seized to any person much less to the person from whose custody it was seized. Since the person concerned, i.e., Mr. Sanjeev Nayak, from whom the currency notes were seized claimed to be in the employment of the petitioner-company as their site manager and also claimed that the seized money belonged to the petitioner-company hence, summons under section 131 of the Income-tax Act was issued by respondent No. 1 to the petitioner, dated April 2, 2003, (annexure P-4), asking the petitioner to give evidence and/or to produce books of account or other documents as specified in the summons. A similar summon was also issued to one Jagdish Modani (annexur....
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....ent. In support of the reply, the petitioner filed copies of the certificates of bank, account books, referred to supra. After submission of the reply and recording of statement, the income-tax authorities have done nothing in this case. The petitioner has filed application before the Chief Commissioner of Income-tax praying for release of the amount. However, no orders have so far been passed except sending of the letters to the petitioner to attend the hearing of the case as is clear from letter dated May 24, 2003 (annexure P-18). Instead by order dated April 24, 2003 (annexure P-16) respondent No. 2 has impounded the books of account. It is with this background and on the basis of these facts, the petitioner has come to this court questioning the very legality of the action taken by the respondents in seizing the amount by taking recourse to the provisions of section 132A of the Income-tax Act. The respondents have filed the return. It is stated on behalf of the respondents that the impugned action taken pursuant to section 132A ibid is justified on facts. It is stated that there is an information in possession of the respondent as also (respondent No. 3) has reason to believe ....
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....awal of amounts from the bank account of the petitioner, copies of account books, certificate issued by the bank certifying withdrawals by cheques were sufficient proof in support of the fact that the seized amount was not an income/assets from any undisclosed sources but it was an income which has been disclosed in the books and/or would have been disclosed in the return. In reply, learned counsel for the Revenue supported the impugned action on the basis of the stand taken in the return. According to learned counsel, in view of inconsistent statements made, and different dates mentioned in the currency notes, seized, the impugned action was called for by invoking the powers conferred under section 132A ibid. Having heard learned counsel for the parties and having perused the record of the case, I am inclined to allow the writ and quash the impugned retention and authorisation (annexures P-3 and P-10), issued under section 132A of the Act. Law on the point of interpretation of section 132 and section 132A and in particular the words employed therein in regard to exercise of powers and its extent and judicial review by courts is fairly well settled. This is what was held by the A....
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....s, the petitioner had furnished adequate and sufficient material with the respondents to show that the sources of assets have been explained beyond any reasonable doubt and hence there was no need to invoke section 132A ibid in relation to the assets in question. It is not in dispute that the petitioner is a regular assessee having PAN. It is also not in dispute that the amount in question was withdrawn from the bank by the petitioner from their account vide 2 cheques on March 29, 2003 totalling to Rs. 40,00,000 (annexure P-6), i.e., just 2 days prior to seizure on April 2, 2003. It is also not in dispute that the bank provided their box and exchanged currency notes (annexure P-9) on the request of the petitioner. It is also not in dispute that the said sum did reflect in the books of account of the petitioner as is clear from the entries in the cash book. In view of these documents, there was no justification on the part of the Income-tax Department (R-1/3) to invoke the powers conferred under section 132A ibid for forming an opinion as contemplated under section 132A(1)(c) that there is an information in their possession and that they have reason to believe that the assessee has....