Commissioner
of Income Tax, Allahabad & Ors Vs. Ms. Vindhya Metal Corporation & Ors
[1997] INSC 252 (5 March 1997)
S.C.
AGRAWAL, G.B. PATTANAIK
ACT:
HEADNOTE:
This
appeal is directed against the judgment of the Allahabad High Court dated May 4, 1983 whereby Civil Misc.
Writ
Petition No. 99 of 1992 filed by the respondents was allowed and the authorisation
made by the Commissioner of Income Tax (for short 'the Commissioner') under
Section 132- A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act')
and the proceedings in consequence thereof were quashed. It was also directed
that action of the appellants in seizing of books and documents as well as the
sum of Rs. 17,353/- on December 30, 1981 was contrary to law and the same be
returned to the respondents.
On
December 25, 1981 one Vinod Kumar Jaiswal, while he was travelling from Mirzapur
to Calcutta by the Kalka Mail, was detained at Moghal Sarai Railway Station by
the Government Railway Police and an attached case containing a sum of Rs. 4,63,000/-
was sized from him on the suspicion that the money was stolen property or had
been obtained through some other offence. A case under Section 411 I.P.C.
read
with Section 41 and 102 Cr.P.C. was registered against him. An intimation about
the seizure of money was sent to the Income Tax Authorities at Varanasi on December 26, 1981.
On
December 29, 1981 the Inspecting Assistant Commissioner, Varanasi sent an
intimation about it to the Commissioner about the fact of possession of the
aforesaid amount by Vinod Kumar Jaiswal and also that he did not have any
papers and documents regarding ownership or possession of the amount and that
no person in the name of Vinod Kumar Jaiswal was borne on the General Index
Register of Income tax Office at Mirzapur. The Commissioner issued a warrant of
authorisation under Section 132-A(1) of the act on the basis of which the
Income Tax Office sent a letter of requisition to the Station Officer Incharge
Government Railway Police, Moghal Sarai requiring the Station Office to hand
over the seized sum of money to him (Income Tax Officer) who had been authorised
by a warrant of authorisation to receive it. The Inspecting Assistant
Commissioner, Varanasi, in exercise of his power under Section 132 of the Act, authorised
search of the residential premises of Rajendra Kumar Pandey, respondent No.2, a
partner of M/s Vindhya Metal Corporation, Imamganj, Mirzapur, respondent no.1.
The Income tax Inspector visited the premises respondent No.1 on December 29,
1981 and found entered in the books of account that the aforesaid amount of Rs.
4,63,000/- had been handed over the Vinod Kumar jaiswal, who was the nephew of Santosh
Kumar Gupta (Jaiswal), respondent No.3, for being carried to Calcutta tin
connection with the business of the said firm.
On December 30, 1981 the search party which searched the
premises of respondent No.1 carried away the sum of Rs. 17, 353/- found as
total balance and the books of account. After completing the investigation the
Railway Police submitted the final report investigation the Railway Police
submitted the final report on January 21, 1982 wherein it was stated that the
money found in possession of Vinod Kumar Jaiswal did not represent stolen
property or property acquired from any offence and the said sum belonged to
respondent No.1, Prior to that, an application before the Judicial Magistrate
(Railway), Varanasi praying the amount which belonged to the respondents and
was being carried by Vinod Kumar, who was serving as a Munim with respondent
No.1, be released to the applicant or in favour of Vinod Kumar. on January 4, 1982 the Income Tax Officer
requisitioned the said amount and on January 13, 1982 he filed an objection to the
application submitted by Rajendra Kumar Pandey. The Judicial Magistrate, by his
order dated February 3,
1982, rejected the
said objection of the Income Tax Department and directed the return of money to
Rajendra Kumar Pandey. The said order of the Magistrate was assailed by the
Income Tax Department by filing a revision before the Allahabad High Court
which was allowed by the High Court by order dated April 19, 1982 and the
Income Tax Department was permitted to take possession of the sum of Rs.
4,63,000/-.
In
these circumstances, the Writ Petition, which has given rise to this appeal,
was filed by the respondent before the Allahabad High Court wherein they
assailed the validity of the warrant of authorisation issued by the
Commissioner under Section 132-A(1) of the Act on the ground that condition
precedent for the exercise of the powers under the said provision was not
satisfied. Before the High Court an affidavit was filed by Shri Hira Singh,
Commissioner of Income Tax, who had issued the warrant of authorisation. After
examining the file containing the order passed by the Commissioner, the High
Court has observed that the information on the basis of which the Commissioner
had issued the warrant of authorisation was as follows :- (a) a sum of Rs.
4,63,000/- had been seized by the Government Railway Police from the possession
of one Vinod Kumar Jaiswal, resident of Imamganj, Durga Devi, Mirzapur;
(b) at
the time to the seizure by the Railway Police, no papers or documents in regard
to the ownership or possession of the amount were in possession of Vinod Kumar Jaiswal,
and (c) no person by the name of Vinod Kumar Jaiswal was borne on the General
Index Register of Income- tax assessee of the Income-tax Office at Mirzapur.
The
High Court, after considering the material on which reliance was placed by the
Commissioner, has held that on the information in possession of the
Commissioner no reasonable person could have entertained a belief that the
amount in possession of Vinod Kumar Jaiswal represented income which would not
have been disclosed by him for purpose of the Acts. The High Court has observed
:- "Vinod Kumar Jaiswal, according to the information in possession of the
Commissioner, was not borne on the General Index Register of Income-tax assessee
of the Income- Tax Offices at Mirzapur to which place he belonged. Obviously,
therefore, there was not occasion for him to have disclosed the amount as his
income in any assessment proceedings under the Act. Without anything more than
what was actually there before the Commissioner, how could it have been assumed
that he would not have disclosed it for purposes of any proceedings under the Act.
There was nothing before the Commissioner to suggest that it was, in fact,
wholly or in part, income of any person connected with Vinod Kumar Jaiswal so
as to induce a belief that, if called upon, Vinod Kumar Jaiswal would not have
disclosed it for the purpose of the Act. The mere fact this amount and did not
have any documents with him regarding its ownership or possession could not be
treated as appears to have been done by the Commissioner as information relatable
to a conclusion that it represented income which would not have been disclosed
by Vinod Kumar Jaiswal of purpose of the Act. Mere unexplained possession of
the amount, without anything more, could hardly be said to constitute
information which could be treated as sufficient by the reasonable person,
leading to an inference that it was income which would not have been disclosed
by the person in possession for purpose of the Acts" We have heard the
learned counsel for the appellant in support of the appeal and we have perused
the impugned judgment of the High Court. Having considered the facts and
circumstances of the case, we do not find any ground to interfere with the
impugned judgment of the High Court. The appeal is, therefore, dismissed. No
order as to costs.
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