AI Drafter 
TaxTMI 
TaxTMI 
2015 (7) TMI 1267
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....1 A first information report came to be registered with D.C.B. Police Station, Surat, vide IC. R.No.37 of 2013 for the offences punishable under sections 213, 214, 217, 119 and 120(B) of the Indian Penal Code, 1860 and sections 7, 8, 9, 12, 13(1)(G) and 13(2) of the Prevention of Corruption Act, 1988, alleging that the respondent Nos.2 to 10 herein conspired to bribe the police authority and the cash amount of Rs. 8.10 crore was seized by the police authority. Upon the police intimating the applicantIncometax Department, further investigation was carried out. The competent authority upon such inquiry formed a reason to believe that the seized cash of Rs. 8.10 crore had not been disclosed for the purpose of incometax. The requisition under section 132 of the Act was, therefore, issued to the police authority. 2.2 An application came to be filed before the learned 5th Additional District and Sessions Judge, Surat under section 132A of the Act read with sections 451 and/or 457 of the CrPC being Criminal Miscellaneous Application No.1275 of 2014 by one Shri Vikrant Pal Singh, Deputy Director of Income tax (Investigation), UnitIII, Aaykar Bhavan, Surat; whereas another Criminal Misce....
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...., 2010 in the case of Deputy Director Incometax (Investigation) v. Shankarlal Mangilal Kulthe and another, while dealing with Special Civil Application No.1009 of 2010 with Special Civil Application No.1010 of 2010. 4. A contrario sensu, Mrs.Hansa Punani, learned Additional Public Prosecutor, has fervently objected to allowing the present Revision Application on the ground that the trial Court's order deserves no interference. She has urged that this is a matter under the Prevention of Corruption Act and, therefore, the presence of muddamal currency notes shall be inevitable and, therefore, prayed for rejecting the present Revision Application. 5. Shri Yash Nanavati, learned counsel appearing for the respondent No.3Ketan Mahadev Patel, has urged this Court to pass appropriate orders in accordance with law. 6. Upon thus hearing both the sides and on considering the order of rejection, so also the provisions of law, the present Revision Application deserves to be allowed for the following reasons : 6.1 As could be noted from the first information report being IC. R. No.37 of 2013 registered with D.C.B. Police Station, Surat, it transpires that prior to the said first ....
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....contention of the said petitioner of Special Criminal Application No.58 of 2015 with regard to obtaining custody of cash amount of Rs. 8.10 crore, this Court (Coram : Vipul Pancholi, J.) did note that the Special Public Prosecutor objected to the application of the Incometax Department before the trial Court and it had denied such request observing inter alia that that the amount in cash cannot be treated as muddamal article and the same was not to be given to the Incometax Department for not being the muddamal and that the amount is required to prove the case against the accused of IC. R. No.37 of 2013. It was observed that such decision of January 16, 2015 was not being challenged before this Court in those proceedings and, therefore, has restrained from making any observation in relation to such order and, accordingly, rejected the said petition. 6.5 It is the case of prosecution that the currency notes to the tune of Rs. 8.10 crore, which have been seized, were for bribing the Investigating Agency carrying out investigation in relation to the first information report registered vide IC. R. No.31 of 2013 and, therefore, a separate case is registered being IC. R. No.37 of 2013....
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....such amount was to be deposited in the private account after completion of the inquiry and as there is no possibility of destruction and identity of the currency notes is a must, its absence may hamper and affect the case of the prosecution. 7. The moot question is whether once the requisition under section 132A of the Act is issued, the same requires to be denied on account of the objection raised by the prosecuting authority. Upon requisition being made under section 132A of the Act, the process of assessment is required to be commenced and computed under section 14 and more particularly, under section 132A of the Act. Time limit for completion of assessment is also needed to be adhered to as per the provision of section 132B. 8. It would be profitable to reproduce section 132A of the Act, which reads as under : "132A : Powers to requisition books of account, etc. (1) Where the Director General or Director or the Chief Commissioner or Commissioner, in consequence of information in his possession, has reason to believe that (a) any person to whom a summons under subsection (1) of section 37 of the Indian Incometax Act, 1922, or under subsection (1) of sec. 131 of th....
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....account, other documents or assets have been delivered to the requisitioning officer, the provisions of subsections (4A) to (14) (both inclusive) of section 132 and section 132B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under subsection (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or cl. (c), as the case may be, of subsection (1) of this section and as if for the words "the authorised officer" occurring in any of the aforesaid subsections (4A) to (14), the words "the requisitioning officer" were substituted." 9. The provision of section 132A provides for the authority prescribed in the said provision in consequence of information in his possession has reason to believe that any person has omitted or failed to produce such books of account or other documents as required by the summons issued under subsection (1) of section 37 or subsection (1) of section 131 or subsection (4) of section 22 or subsection (1) of section 142 of the Act. 9.1 It further requires the officer or authority to deliver such books of account, other documents or assets to ....
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....essee of earlier years and that may also cause loss of required material and may have bearing on collection of tax causing substantive loss to the Revenue, if eventually the liability is saddled. 10. Reference would be necessary to the case of Deputy Director of Incometax v. State of Gujarat (supra), wherein this Court has held that there is no power with the Police Authority to withhold the currency notes. Once the police seizes the currency notes and informs the Incometax Department, the requisition has to be made. The Court has also held that the inquiry under section 451 of the Code of Criminal Procedure and one under section 132A of the Act are quite different. There are limited powers under section 451 of the Code of Criminal Procedure, whereas under section 132A of the Act, a specific provision is made for such purpose. Before the High Court, the case was of stealing of cash of Rs. 42.50 lakh and the employee of the concerned complainant was arrested from whom such amount of Rs. 42.50 lakh was seized. The intimation was given by the police officer to the Incometax Department to approach the trial Court to initiate the proceedings. The complainant also moved before the tri....
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....ody of such currency notes. Believing the amount was assessable to tax in the hands of the person concerned, their application for interim custody was granted and at the conclusion of the trial, the interim order was made absolute. 11.1 The respondentaccused challenged the same before the Sessions Court by preferring an appeal and Revision Application. Both the proceedings were allowed setting aside the order passed by the Magistrate handing over custody of the currency notes to the Incometax Department. The Appellate Forum also directed the learned Magistrate to hold inquiry in terms of provisions of the CrPC and to pass final order in respect of such muddamal article. The Incometax Department had pitched its case on the strength of the provision of section 132A of the Act, under which the requisition for currency notes was made by the competent authority. This Court held that under section 132A of the Incometax Act, the competent authority if has reason to believe inter alia that any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purpose of the Incometax Act, by any person from whose possession or contr....
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.... kind or document which is produced before the Court or which is in its custody, (b) any property regarding which an offence appears to have been committed or which appears to have been used for the commission of any offence." 13. At this juncture, it would be relevant to refer to the decision of the Apex Court in the case of Sunderbhai Ambalal Desai v. State of Gujarat, reported in AIR 2003 SC 638, wherein the Apex Court has held and observed as under : "Valueable Articles and Currency Notes : 11. With regard to valuable articles, such as, golden or silver ornaments or articles studded with precious stones, it is submitted that it is of no use to keep such articles in police custody for years till the trial is over. In our view, this submission requires to be accepted. In such cases, Magistrate should pass appropriate orders as contemplated under Section 451, Cr. P.C. at the earliest. 12. For this purpose, if material on record indicates that such articles belong to the complainant at whose house theft, robbery or dacoity has taken place, then seized articles be handed over to the complainant after : (1) preparing detailed proper panchnama of such articles; (2) t....
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....rt may make such order as it thinks fit for the proper custody of such property pending the conclusion of the inquiry or trial and if property is subjected to natural and speedy decay and/or otherwise it is expedient to do so, the Court may dispose of after recording such evidence as may be necessary. 15. Under the heading of 'valuable muddamal article and the currency notes', it is made obligatory upon all the Courts trying the criminal cases to expeditiously and judiciously exercise the powers under section 451 for the custody and disposal of the property. On account of occurrences of theft and misappropriation, so also of irreversible damage to the property, the Apex Court was thoroughly concerned and directed expedient steps to be taken by the concerned Court. It is also further directed that wherever such property is required for the purpose of trial, under which circumstances, the Court can photograph them or video record the muddamal. IT has also required that when valuables are not handed over to the applicant or complainant, the same be directed to be kept in a bank locker. In no circumstances either for identification or investigation it is to be kept with the ....