TMI Blog1996 (8) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 9,80,000/- from Amrawati, Maharashtra where they had gone to purchase goods but said transaction could not be finalised. When they reached Shahpura on the aforesaid date in early hours, the vehicle in which petitioners No. 2 and 3 were travelling was intercepted by the police authorities and the cash of ₹ 9,80,000/- was seized under Section 102 Cr.P.C. on the ground of suspicion. 3. Explanations given by petitioners No. 2 and 3 were not accepted by the police authorities and they informed the Income Tax Department. On the information of the police, the Income Tax authority namely Assistant Director of Income Tax (Investigation), Kota issued notices under Section 131(1A) of the Income Tax Act to the petitioners and recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, with the consent of the learned Counsel for the parties I propose to decided the case finally at admission stage. 8. I have heard the learned Counsel for the parties at length and critically perused the materials available on record. 9. It is streneously urged before me by learned Counsel for the petitioners Shri Vineet Kothari that the warrant of authorisation under Section 132A of the Income Tax Act issued by respondent No. 2 on 7.5.96, is illegal and without jurisdiction and respondent No. 2 cannot be said to have reason to believe much less reasonable belief as required under Section 132A of the Income Tax Act on the basis of information made available to him to the effect that the cash of ₹ 9,80,000/- was undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in exercise of extra-ordinary jurisdiction this Court can examine whether the act of issuance of an authorisation under Section 132A is arbitrary or malafide or whether the subjective satisfaction which is recorded is such that it indicates lack of application of mind of the appropriate authority. According to me the reason to believe must be based on definable material or materials and if the information or the reason to believe has no nexus with the belief or there is no definable materials or tangible information for formation of such belief then in such a case action taken under Section 132A of the Income Tax Act would be treated as illegal. 12. In the present case on behalf of answering respondents the original record regarding in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the aforesaid section the respondent No. 2 has afforded an opportunity of hearing to the petitioners, therefore, it amounts violation of principle of natural justice. 15. I am not impressed with the aforesaid argument of the learned Counsel for the petitioners inasmuch as in an emergent condition respondent No. 2 has to exercise his power under Section 132A of the Income Tax Act which is based on his subjective satisfaction is not final but it results in initiation of proceedings leaving room for giving an opportunity of hearing to the petitioners before an order adversely affecting to the petitioners is actually passed. Thus, in my considered opinion, opportunity of hearing is excluded before issuing warrant of authorisation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g order on 9.7.96. The relevant portion of the order dated 9.7.96 is reproduced below: xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx XXX XXX XXX XXX XXX XXX The learned Counsel for the respondents is further called upon to explain that out of total amount, only 60% tax is recoverable then why remaining amount should not be refunded to the petitioners. 18. Irrespective of several opportunities aforeded to the answering respondents to explain as to under what circumstances they are entitled to keep in their possession the total amount of ₹ 9,80,000/- while at the most within the meaning of Section 113 of the Income Tax Act they are entitled to charge tax on the aforesaid amount @ 60% only but they fail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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