TaxTMI 
TaxTMI 
2004 (4) TMI 56
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....horities. The petitioners and each of them at an earlier point of time came to this court for identical grievance challenging a prohibitory order dated February 20, 2004, issued under section 132(3) of the Income-tax Act, 1961 (hereinafter referred to as the said Act). These first writ petitions were moved on April 19, 2004 and on April 20, 2004, the aforesaid writ petitions were disposed of as the said prohibitory order under section 132(3) had lost its force because of efflux of statutory period. As such the challenges were not maintainable as being infructuous. In these present writ petition because of the bank's refusal to honour the said managers' cheques on account of issuance of fresh prohibitory order under section 132, sub-section (3) of the said Act and for wrongful and forcible demand for encashment of the said cheques and making over proceeds thereof to them. Mr. Pratap Chatterjee the learned senior advocate appearing with Mr. Debal Banerjee, the learned senior advocate, contends that under the scheme of the newly inserted section 132(3) read with sub-section (8A) of the said Act no fresh prohibitory order can be issued in relation to the same action of search and sei....
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....l as the bank from honouring the managers' cheques is unauthorised and not permitted under the provisions of the said Act. They cannot seize the money, at the highest the Revenue official can attach by issuing prohibitory orders under section 132(3) of the said Act. He has relied on the flowing decisions, in support of his submission as above. Raj Kumar v. Union of India [2000] 242 ITR 584 (P&H); Dheer Singh v. Assistant Director of Income-tax [1998] 230 ITR 343 (All); I. Devarajan v. Tamil Nadu Farmers Service Co-operative Federation [1981] 131 ITR 506 (Mad) and ITO v. M. Shajahan [1976] 194 ITR 347(Ker). Mr. S.K. Kapoor, learned Additional Solicitor-General, appearing with Mr. P.K. Mullick, the learned senior advocate, while opposing all the writ petitions contends that the writ petitions are liable to be dismissed in limine and the interim order already passed shall be vacated forthwith. He submits that these so-called companies are the group companies of Ruia Cortex Ltd. which according to the Revenue information has floated a fictitious company in order to divert large undisclosed income and money to evade and/or dodge lawful revenue. This network of diverting system of the ....
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....that the money kept at the bank is not the money of the petitioners then certainly it is "a debt" payable by the bank to the petitioners as a creditor and this debt can very well be attached and/or be subjected to the order of seizure. In support of his contention, he has placed reliance on the following judgments: Special Director v. Mohd. Ghulam Ghose, AIR 2004 SC 1467; [2004] 1 JT (SC) 206; Lan Eseda Steels Ltd. v. CIT (Assistant) [1994] 209 ITR 901 (AP); Deputy Director of Inspection (Intelligence) v. Vinod Kumar Didwania [1986] 160 ITR 969 (SC) and Afzalunnissa Begum v. Union of India [1992] 195 ITR 612 (SC). Mr. Bhasker Sen, the learned senior advocate appearing for the bank, submits that the bank will abide by the decision of this court. He supplies information to the court that in all the cases the requisite amount covering the amount of managers' cheques have been transmitted by debiting in the account of the writ petitioners maintained in Other branches and these amounts are lying in the suspense account to facilitate the Calcutta branch to honour the managers' cheques if presented. He contends in view of the prohibitory order issued under section 132(3) of the said Act....
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....the difficulties then being faced by the affected person a rigid time limit of 60 days has been fixed and the earlier provision of extension has been deleted with the idea that whatever is required to be done to maintain the restraint order is to be completed within the period of 60 days in relation to one set of action. This has been done keeping in view that the Revenue officials taking advantage of the provision for extension used to prolong the investigation, search and seizure which resulted in undue harassment of the taxpayers. I am unable to accept the submission of Mr. Additional Solicitor-General that in the absence of a contrary provision it is open for the Revenue officials to pass order under section 132(3) of the said Act afresh in relation to the same search and seizure action. In my opinion if this argument is accepted then it amounts to unconditional and unguided extension of time in effect, which was not even permissible under the previous provisions and further the object of the Legislature, if not practising "fraud" upon the statute. The fresh restraint order can be issued in relation to fresh and different action and not in relation to the same action previousl....
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.... (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account of other documents Which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then, - (A) the Director General or Director or the Chief Commissioner or Commissioner, as the case may be, may authorise any Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Joint Director or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income....
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....er and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii). (1A) Where any Chief Commissioner or Commissioner, in consequence of information in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing respect of which an officer has been authorised by the Director General or Director or any other Chief Commissioner or Commissioner or any such Joint Director or Joint Commissioner as may be empowered in this behalf by the Board to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle of aircraft not mentioned in the authorisation under sub-section(1), such Chief Commissioner or Commissioner may, notwithstanding anything contained in section 120, authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft". Upon a careful and fair reading of the said section it appeared to me in order to seize amongst others any money the following pre-conditions are to be fulfilled, (i) the summons as mentioned....
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....ents may be seized by the Revenue officials but the money itself is in connection with these documents. I find considerable force in the argument of Mr. Chatterjee that the Revenue official cannot compel the bank to encash fixed deposit and make over the proceeds to him under search and seizure and this will be without jurisdiction. The observation of the Division Bench of the Allahabad High Court in Dheer Singh v. Assistant Director of Income-tax [1998] 230 ITR 343 in this context is apposite. Section 132 does not confer any authority on the Income-tax Officer to realise the assets and convert them into cash. This principle has also been reiterated in the judgment of the Andhra Pradesh High Court in Lan Eseda Steels Ltd. v. CIT (Assistant) [1994] 209 ITR 901. The Supreme Court decision reported in Afzalunnissa Begum v. Union of India [1992] 195 ITR 612 cited by Mr. Additional Solicitor General is distinguishable on the facts. In that case the money was kept with the bank in the vault as custodian not qua banker. The ownership of the depositor/assessee did not cease, therefore it was seizable. Reliance of Mr. Additional Solicitor General on the decision of the Supreme Court in Dep....