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TMI Blog2010 (12) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... e. When he was asked as to whether he was arrying any valuable items from Singapore, the respondent informed that he was carrying 10 kgs. of gold jewellery. When he was asked about the purpose of carrying 10 kgs. of gold jewellery from Singapore to India, the respondent stated that he does not own 10 kgs. of gold, that after obtaining boarding pass at Singapore airport, when he was ready to enter the check-in area to complete the other formalities, an unknown person approached him with a request to carry 10 kgs. of gold jewellery to Chennai. The said person is stated to have offered Rs. 8,000 to the respondent to carry the said gold jewellery to Chennai and hand it over to a person at Chennai at the International airport arrival. According to the respondent, when he asked him as to how he could identify the receiver of the gold jewellery at the Chennai airport, the said unknown person informed him that if he furnishes the mobile number, the other person will be able to identify him. The said unknown person also stated to have told him that if the other person at Chennai reveal the respondent's mobile number furnished by him at the Singapore airport, he should hand over the 10 kgs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants were directed to complete the enquiry within a period of ten weeks from the date of receipt of a copy of the order and depending upon the outcome of the enquiry, the prayer of the petitioner for release of the gold jewellery can also be considered by the appellants. The respondent was directed to extend all his co-operation in completing the enquiry within the stipulated time-limit. 10. Thereafter, the second appellant passed an order dated December 10, 2009, under section 132B(1) of the Income-tax Act holding that the pass-port entries of the respondent revealed that he stayed in India during the period October 16, 2004 to November 28, 2007 more than 365 days apart from 60 days stay in the relevant previous year as stipulated under section 6(1)(c) of the Income-tax Act and that therefore, he was a resident in India and hence his total income was taxable in India. 11. According to the second appellant, as the respondent was a resident of India within the meaning of section 6(1)(c) of the Income-tax Act, a formal notice under section 153A(1)(a) of the Act was also issued to him calling upon him to file his returns of total income for the assessment years 2004-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia for more than 365 days between October 17, 2004 and November 28, 2007, and thereafter from August 13, 2009 onwards on different dates for 96 days. The learned single judge also repelled the contention of the appellants that the stay in India in the previous year should be counted only in respect of a voluntary stay and that the respondent had never been in India prior to August 13, 2009 and the 60 days stay in India was only on account of the proceedings initiated by the appellants. 19. The learned judge however held that the respondent's case was covered by Explanation (b) to section 6(1)(c) of the Act and since the respondent did not stay in India in the previous year viz., 2009-10 for 182 days, the appellants had no jurisdiction to treat the respondent as a "resident" for the purpose of passing orders under section 132B of the Act. 20. The learned judge therefore held that the impugned order dated December 10, 2009, was invalid and consequently directed the fourth appellant to return the gold jewellery weighing 9957.43 grams seized from the respondent at the gate of Anna International Airport, Chennai on the night of August 13, 2009/early morning of August 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal duration of stay on such visits does not exceed thirty days and such passenger has not availed of the exemption under this notification at any time of such short visits." 25. The learned senior counsel for the respondent would further contend that the respondent was an "eligible passenger" since prior to his visit on August 13, 2009 to India, he stayed abroad for nearly 3 years and therefore he was entitled to bring 10 kg of gold when he visited India on August 13, 2009. 26. The learned senior counsel by referring to yet other directions issued by the Government of India dated March 2, 1995 and April 22, 1992 to the effect that it is not necessary for a passenger to own the gold in order to become eligible to import and that any incoming passenger can import the gold as long as he satisfied the conditions of stay abroad and those relating to payment of duty in foreign exchange and the maximum quantity permitted, as well as that there was no condition that the source of earning from which the gold was purchased be verified. It was therefore contended that the directions therefore made it clear that it would be beyond the jurisdiction of the customs officials to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayanasamy, learned standing counsel con-tended that the decision relied upon by the respondent varies in facts and therefore the same cannot be applied to the case on hand. 35. The learned standing counsel also contended that mere compliance with the notification issued under the Customs Act will have no bearing on the action taken under the provisions of the Income-tax Act. 36. According to the learned standing counsel going by the version of the respondent himself, there were contradictions as regards the ownership of the gold brought by him and therefore in the present juncture the seizure effected by the impugned order dated December 10, 2009, should not be interfered with. The learned standing counsel contended that if seizure of gold is released as directed by the learned single judge, having regard to the fact that the respondent had secured two passports and also taken steps to secure a third passport, the balance of convenience is also not in favour of the release of the gold jewellery seized and that he can very well await the assessment proceedings and depending upon the outcome, the appellant can be allowed to decide the disposal of the gold jewellery s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the person known to him (unknown to me) at the International Airport arrival hall in Chennai airport. I asked him how I will identify the receiver of the gold jewellery at Chennai airport, for which he replied that his man in Chennai will easily identify me and ask my mobile number. When his persons reveals my mobile number which I gave him at Singapore airport, I have to hand over the 10 kgs. of gold jewellery. In addition he has given USD10950 for the purpose of customs duty to be paid at Chennai airport. Further he stated that Rs.8,000 will be paid by his person waiting at Chennai airport on receipt of the 10 kgs. of gold jewellery at the time of handing over of gold jewellery." 42. Thereafter, based on the said information, necessary permission was sought for warrant of authorisation under section 132 of the Income-tax Act to make a search on the respondent. Necessary authorisation was secured from the fourth appellant and was issued to the first appellant. Based on the said authorisation, search was conducted on the respondent under section 132 of the Income-tax Act, which resulted in seizure of the gold jewellery worth Rs. 1,37,21,202. The search and seizure was eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proof for the said amount for being reflected in the cash book, which the petitioner claimed to have done by getting copies of cash book and ledger faxed by the Delhi office to respondent No. 4 showing that the money was reflected in the cash book. Thereafter, other proceedings were taken with reference to the said seizure effected on the said petitioner. A challenge was made and the Division Bench of the Delhi High Court in the background of the above facts held that the search and seizure under section 132 to be made, the manner in which the documents and the money seized were in violation of the condition precedent for authorising an action under section 132. The Division Bench also pointed out as to what can be construed as information preceding such search and how the expression "reason to believe" mentioned in section 132(1) to be construed. 48. The Division Bench has held as under as regards "information" and "reason to believe" in the following words (page 309 of 242 ITR) : "`Information', in consequence of which the Director-General or the Chief Commissioner, etc., as the case may be, has to form his belief is not only to be authentic but capabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate property or person, to prevent violation of privacy of a citizen. In Balwant Singh v. R. D. Shah, Director of Inspection [1969] 71 ITR 550 (Delhi), a Division Bench of this court, while reiterating that the High Court cannot test the adequacy or the grounds leading to the satisfaction recorded, under section 132 of the Act, observed that if the grounds on which the belief is founded are non-existent or are irrelevant or are such on which no reasonable person can come to that belief, the exercise of the power under the said section would be bad ; short of that, the court cannot interfere with the belief bona fide arrived at by the Director of Inspection. But the court could examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and a search warrant could not be issued merely with a view to making a roving or fishing enquiry. The expression `reason to believe' has been explained in various decisions by the apex court and High Courts while dealing with sections 132 and 148 of the Act. It has been held that the words `reason to believe' means that a reasonable man, under the circumstances, would form a be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty cannot proceed based on mere rumour or a gossip or a hunch. In the case on hand, the concrete information was furnished by the respondent himself which was exclusively known to him was revealed to the first appellant. Therefore it will have to be found out whether based on the said information he had sufficient reason to believe for initiating an action under section 132. 52. In that respect in that very decision it is pointed out that the opinion which has to be formed by the officers is subjective and the jurisdiction of the court to interfere is very limited and that the court will not act as an appellate authority and examine meticulously the information in order to decide for itself as to whether action under section 132 was called for. 53. The only other aspect which the court can examine would be whether the reason to believe was tangible in law and if the information or the reason had no nexus with the belief or there was no material or tangible information for the formation of the belief, only then an action taken under section 132 would be regarded as bad in law. 54. Applying the above well laid down principles, when we examine the case on hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., 2009-10, the respondent stayed in India for 96 days. 60. The only other contention on behalf of the respondent was that he would be governed by Explanation (b) to section 6(1)(c) and therefore stay in India in that previous year should be 182 days and not 60 days. The said contention of the respondent found in favour with the learned single judge and consequently the learned judge held that the search and seizure made under section 132 lacked jurisdiction. 61. Therefore the issue depends upon the interpretation of Explanation (b) to section 6(1)(c). The said Explanation reads as under : "Explanation.-. . . (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being out-side India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words `sixty days', occurring therein, the words `one hundred and eighty-two days' had been substituted." 62. While trying to find out whether the respondent would be governed by the said Explanation, it will be necessary to refer to certain entries found i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singapore and Malaysia and that on expiry of such visit pass, the respondent came back to India being an Indian citizen. 66 . In this context, it will be quite necessary to make a reference to the stress laid by the learned standing counsel for the appellants on the letter dated October 9, 2009, issued by the Passport officer of Tiruchirappalli, which discloses that the respondent was originally possessing a passport bearing No. A6521094, which was renewed bearing No. G5949508 by mentioning his name as Ravi Apparasu. The said letter dated October 9, 2009, also revealed a startling fact that the respondent secured another passport bearing No.T682235, issued on March 7, 1995, which expired on March 6, 2005, mentioning his father's name as Vaithilingam and his wife's name as Ponni and certain other details relating to his address, name of his mother etc. 67. In one of his statements, the respondent revealed his wife's name as Pushpalatha, who is stated to be living in Singapore. The learned senior counsel appearing for the respondent fairly submitted before us that the respondent got a second wife who is living in India. 68. Another startling fact was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 10 kgs. gold seized from him. The contention about coercion etc., does not impress on us, inasmuch as, we find that the respondent in his letter dated September 2, 2009, addressed to the first appellant, the whole content was written by him in English pointing out all the legal implications relating to section 132 of the Income-tax Act. Therefore, the statement that he was not conversant with English, etc., were purely an afterthought. 73. Moreover, when he appeared for an enquiry before the first appellant in the proceedings initiated under section 132B of the Act, he categorically admitted that he had not obtained any licence for doing any business in Singapore, that he came to India with such large quantities of gold to start a jewellery business but yet he was not even aware of the carat value of the jewellery brought by him, while as per his original statement, the whole jewellery brought by him belonged to somebody else. 74. Therefore, it is not known whether the jewels really belonged to the respondent or to somebody else and therefore the relevance of the gold jewellery cannot be made in the present juncture. If really the respondent is interested in get ..... X X X X Extracts X X X X X X X X Extracts X X X X
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