Citation Codes

Equivalent Citations

citation codes

Case Number

Criminal Revn. No. 571 of 1965

Judges

Hon'ble Mr. Justice Khaleel Ahmed

Acts

SECTION 132 INCOME TAX ACT
Section 132(1) of the Income Tax Act, 1961,
Section 132(3) of the Income Tax Act, 1961,
SECTION 132 A INCOME TAX ACT
sub-section (1)(i) of Section 132
Income Tax (Amendment) Act, 1965,
search;(iv) Sub-section (1)
Income Tax Act, 1965

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This revision application was brought by the Inspecting Assistant Commissioner of Income Tax, Cuttack, challenging the order dated 31-5-1965 of Shri C.R. Panda, Special Magistrate (Additional District Magistrate, Judicial), Puri, which substantially dismissed an earlier petition for the safe custody of seized property.

On 6-5-1965 the Special Police Establishment (Economic Offences Wing), Calcutta, conducted a search at the house of Hadibandhu Das in Cuttack and seized cash (recorded as Rs. 92,549.36) and gold in various forms (the opinion records the weight as 44.39 tolas in one passage and 44.09 tolas in the copy of the Income Tax order, and gold ornaments weighing 182.3.6 tolas). On 8-5-1965 Hadibandhu Das petitioned the Special Magistrate under Section 523 of the Code of Criminal Procedure for release of the seized properties; by order dated 11-5-1965 the Court directed the prosecution to release the cash (except small coins). That order became final and no revision was filed against it.

On 19-5-1965 the Income Tax Officer (authorised under Section 132(1) of the Income Tax Act) filed a separate application before the Special Magistrate attaching an order purportedly issued under Section 132(3) of the Income Tax Act directing that the cash and gold not be removed or dealt with except with the officer's permission. The Special Magistrate heard objections raised on behalf of Hadibandhu Das and substantially dismissed the Income Tax Officer's application; the present proceeding is a revision against that dismissal.

Legal Issues Presented

Whether an authorised officer under Section 132 of the Income Tax Act could validly invoke and act under Section 132(3) where there was no entry and search by that authorised officer under Section 132(1)(i) (i.e., whether the Section 132(3) order was procedurally available in the absence of a Section 132(1) search by the authorised officer).
Whether the Special Magistrate had any power to grant relief in respect of the cash after the Court had already dealt with and released that cash by the order dated 11-5-1965 under Section 523 of the Code of Criminal Procedure, such that by the time the Income Tax application was filed on 19-5-1965 the Court was functus officio in relation to the cash.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's analysis focused on the statutory text of Section 132 of the Income Tax Act and on the procedural history of the seized property in the criminal proceedings:

The court examined Section 132(1) and explained its structure: clause (i) authorises entry and search of a building or place where the authorised officer has reason to believe that certain documents, money, bullion, jewellery or other valuable articles are kept; clause (iii) then permits seizure of such items "as a result of such search." The court emphasised that seizure under clause (iii) follows entry and search under clause (i).
The court explained the purpose of Section 132(3): it is a special provision to be used where it is not practicable to seize an article at the time of search. In that situation the authorised officer may serve an order on the owner or person in immediate possession directing that the property shall not be removed or dealt with except with the officer's prior permission, and the officer may take steps necessary to ensure compliance.
Applying these provisions to the facts, the court found it undisputed that there was no entry or search by the authorised officer under Section 132(1)(i). Instead, the cash and gold had been seized by the Police in the course of separate searches conducted as part of the criminal proceedings and were in the custody of the trial court. Thus, the prerequisite factual situation envisaged by Section 132(1)(i) — the authorised officer's search in a place — did not exist here.
The court further noted that regarding the cash, the trial court had already exercised its power under Section 523 CrPC and by order dated 11-5-1965 had directed release of the cash (except small coins) to Hadibandhu Das; no revision was filed against that order and it had become final. Consequently, by the time the Income Tax application invoking Section 132(3) was made on 19-5-1965 there was nothing left for the Special Magistrate to adjudicate with respect to the cash and the Special Magistrate had become functus officio as to that subject-matter.
Given (a) the absence of any Section 132(1)(i) search by the authorised officer and (b) the prior final court order releasing the cash, the court concluded that no relief could be granted to the Income Tax Officer in the Special Magistrate's Court. The court noted that if the application was not maintainable before the Special Magistrate, there was a fortiori no ground for a revision in the present Court.

Holding and Implications

Core Holding: THE REVISION APPLICATION IS DISMISSED.

Direct consequences:

The order of the Special Magistrate dated 31-5-1965 (which substantially dismissed the Income Tax Officer's petition for custody/protection of the seized cash and gold) stands.
No relief was granted to the Income Tax Officer in respect of the properties seized in the criminal proceedings; in particular, the cash had already been released by the Court under Section 523 CrPC and that release was final at the time of the Income Tax application.

Broader implications: The opinion does not purport to lay down any new precedent; it applies the statutory scheme of Section 132 to the factual sequence and emphasises the procedural prerequisites for invoking Section 132(3). The decision is limited to the facts before the court and the court expressly notes the absence of a Section 132(1)(i) search by the authorised officer and the finality of the earlier CrPC order.

Disposition: Petition dismissed.

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Union Of India, Through Asst. Commr., Income-Tax, Cuttack Range v. Hadibandhu Das And Others Opposite Parties.

1. This application in revision has been brought by the Inspecting Assistant Commissioner of Income Tax, Cuttack, and is directed against the order dated 31-5-1965 passed by Shri C.R Panda. Special Magistrate (Additional District Magistrate. Judicial), Puri, substantially dismissing the petition made before him on behalf of the petitioner, for the safe custody of currency of Rs. 92549.36 P. and gold bars and ingots weighing 44.39 tolas and gold ornaments weighing 182.3.6 which were seized in connection with some criminal case pending before him for disposal. It appears that in connection with that criminal case a search was effected in the house of one Hadibandhu Das at Cuttack on 6-5-65 by the Special Police Establishment, Economic Offences Wing. Calcutta, and in the course of that search the aforesaid cash including some coins, gold bars, ingots and ornaments were seized Two days thereafter, on 8-5-1965 petition was filed on behalf of Hadibandhu Das before the learned Special Magistrate under Section 523 of the Cr PC for the release of the properties seized in the course of the search. This application was disposed by the order dated 11-5-1965. Thereunder the prosecution was inter alia directed to release his cash, except the small coins within a fixed date. That order has now become final and it is the admitted case of the parties that there was no revision filed against it.

2. Subsequently, however, on 19-5-1965 there was a petition filed on behalf of the petitioner for some suitable orders. That petition read as follows:

“In the court of the Additional District Magistrate (Judicial) and Special Magistrate, Puri

S.P.E Case No. 3 of 1965 (Bombay)

Republic of India v. Hadibandhu Das.

Application filing of — Prayer for consideration and necessary action in view of Honourable Court's order in the above case dated 11-5-1965.

My client. Shri E.V Rao Naidu, Inspecting Assistant Commissioner of Income Tax, Cuttack Range. Cuttack, duly authorised by the Commissioner of Income Tax, Bihar and Orissa. Patna, under Section 132(1) of the Income Tax Act, 1961, as amended by the Income Tax (Amendment) Act, 1965, has passed an order under Sec. 132(3) of the said Act in pur suance of the powers vested in him as such in the matter of cash and currency of Rs. 92549.36 (Rupees ninetv-two thousand five hundred forty-nine and thirty-six paise only) and gold bars and ingots weighing 182.3.6 tolas for purposes of Income Tax and a copy of the order is herewith submitted for the kind consideration of the Court. It is prayed that the Hon'ble Court be pleased to take cognizance of this situation and pass suitable orders for the safety upkeep of the properties in question and for this act of your honour's kindness the petitioners, as in duty bound, shall ever pray.

R.C Misra,

By the Advocate 19-5-1965.

3. Along with that application there was also attached a copy of the order said to have been passed under Section 132(3) of the Income Tax Act, 1961, as amended by the Income Tax Act, 1965 That order read as follows:—

“Whereas it has come to my knowledge that cash and currency of the value of Rs. 92549.36 (Rupees ninety-two thousand five hundred and forty-nine and thirty-six paise only) and gold bars and ingots weighing 44.09 tolas and gold ornaments weighing 182.3.6 tolas have been found in the house near Mangalabagh Police Station. Cuttack, of Hadibandhu Das of Cuttack, and it has been seized by the Special Police Establishment Officers in a raid conducted by them on 6-5-1965 and

Whereas the said cash and currency of Rs. 92,549.36 and gold bars and ingots weighing 44.09 tolas and gold ornaments weighing 182.3.6 tolas as per their inventory furnished has been lodged in the State Bank of India, Bhubaneswar.

whereas I am the authorised officer duly authorised by the Commissioner of Income Tax Bihar & Orissa, Patna, under Section 132(1) of the said Act.

I hereby invoke the provisions of Section 132(3) of the said Act and serve this order on you that you shall not remove, part with, or otherwise deal with the said cash and currency of Rs. 92549.36 and gold bars and ingots weighing 44.09 tolas and gold ornaments weighing 182,3.6 tolas except with my previous permission.

(Sd) E.V Rao Naidu, Inspecting Assistant Commissioner of Income Tax. Cuttack Range.

(Authorised Officer)

Note: Section 275A of the said Act says:

“Whosoever contravenes any order referred to in sub-section (3) of Section 132 of the said Act shall be punishable with rigorous imprisonment which may extend to two years and shall also be liable to fine.”

(Sd.) E.V Rao Naidu, Inspecting Assistant Commissioner of Income Tax Cuttack Range, (Authorised Officer)

Memo. No. Con 65-66Z267 Dated Cuttack the 19th May, 1965.

To Shri Hadibandhu Das. Manglabagh, Cuttack C/o Superintendent of Jail, Puri, for compliance.

E.V.R Naidu, Inspecting Assistant Commissioner”

4. The learned Special Magistrate on hearing the objection raised on behalf of Hadibandhu Das disposed of that application by the order under revision.

5. Section 132 of the Income Tax Act provides a special procedure for search and seizure to meet situations enumerated in clauses (a)(b) and (c) of its sub-section (1). That sub-section lays down that where the Director of Inspection or the Commissioner, in consequence of information in his possession, has reason to believe that any of the aforesaid situations exist, he may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner Assistant Director of Inspection, or Income Tax Officer (hereinafter referred to as the authorised officer) to

(i) enter and search any building or place where he has reason to believe that such books of account, other documents, money or bullion, jewellery or other valuable article or thing are kept.

(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available:

(iii) seize any such books of account, other documents, money bullion, jewellery, or other valuable articles or thing found as a result of such search;

(iv) Sub-section (1) is followed by a number of other sub-sections. But out of them sub-section (3) alone is relevant here. That sub-section reads as follows:

“(3) The authorised officer may, where it is not practicable to seize any such book of account other document, money or bullion jewellery or other valuable article or thing, serve an order on the owner or the person who is in immediate possession or control thereof, that he shall not remove, pari with, or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.”

6. A careful reading of sub-section (1) makes it unambiguously clear that the stage of seizure as provided in its clause (iii) comes only after entry and search, as provided in clause (i) in other words when the authorised officer has entered into a building or place referred to in clause (i) of sub-section (1) and as a result of such entry has found there any books of account or any of the other articles referred to therein, he is empowered to seize them if considered necessary. But it may so happen that some of the things found on search may be such as may not permit of seizure then and there. It is to meet such a situation that there is a special provision made in sub-section (3) for the service of an order by the authorised officer, if considered necessary on the owner or the person who is in immediate possession or control of those articles, that he shall not remove, part with, or otherwise deal with them except with the previous permission of such officer.

7. In the present case, it is not disputed that there was at no stage any entry or search effected by the authorised officer in any building or place as referred to in sub-section (1)(i) of Section 132 All that appears to have happened by that time was that as a result of some other searches affected in the course of the criminal proceeding the aforesaid properties were seized by the Police and brought into the custody of the Court where the criminal case was pending for trial. Therefore, it cannot be said that there was any such search effected in the present case by the petitioner in exercise of the authority given to him under Section 132 of that Act.

8. Further, it has to be noted that so far as the cash amount lying in custody of the court was concerned, that had already been dealt with and released from custody by the Court, by its order dated 11-5-1965, passed under Section 523 of the Cr PC. There was no revision filed against that order, and therefore by the time the application was made by the petitioner on 19-5-1965 for the relief under Section 132 of the Income Tax Act that order had become final and there was nothing left thereafter to be dealt with in connection with the cash by that court. In that view of the matter the Court of the learned Special Magistrate had by that time in regard to the cash amount become functus officio.

9. For these reasons I have no doubt in my mind that no relief could be given to the petitioner in regard to the application filed by him: and if that application was not maintainable in the Court of the Special Magistrate, much less there can lie any revision against the order in this Court. Accordingly this application is dismissed.

BK/TVN/G.G.M

10. Petition dismissed.

Union Of India, Thro... v. Hadibandhu Das And O...