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TMI Blog1972 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohammed Hanif, Mohammad sharif, Abdul Aziz, Istiaque Beg and Ishaque Mohammad, while they were in a motor car No. GJB-5330 in the city of Indore. The police suspected that the currency notes were connected with the commission of some cognisable offence. After seizing this money, the police reported the matter to the Magistrate concerned for suitable orders with regard to the custody, production and disposal of this amount. Subsequently on February 10, 1970, a report was made by the police to the Magistrate that the money was no more required by them in connection with any offence. They also reported that the Income-tax Officer, namely, the non-applicants, Satischandra and Deshmukh, under the authority of warrant of authorisation from the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not seize it without any orders from him. A direction was accordingly issued to the Income-tax Officers to deposit the money in court. Against this order, a revision application was made to the Sessions Judge, who was of the view that the provisions of the Income-tax Act were special provisions in this matter and that the Income-tax Officers, though they committed a technical error in not obtaining orders from the Magistrate, did not commit any illegality so as to make them liable for the refund of the money. He has, accordingly, made this reference to this court for setting aside of this order passed by the learned Magistrate. In this court, the learned counsel appearing for the Income-tax Officers supported the reference. Learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to further orders from him. In ordinary circumstances, the Magistrate did have the jurisdiction to pass final orders with regard to the disposal or delivery of possession of the said currency notes. He, in these circumstances, directed the police to hold the money with them pending further orders from him. The Magistrate must have presumed that the police will investigate into the matter and prosecute those from whose possession currency notes were seized in case any offence is made out against them. It is also evident that it was on the information given by the police to the Income-tax Officers that the Commissioner of Income-tax, Nagpur, acting under section 132 of the Income-tax Act, issued a warrant of authorisation to search and seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do so only with the permission of the Magistrate and not independently of any permission from him. It has already been stated above that under the Income-tax Act, the Income-tax Officer had authority to make an application to the court under whose custody there was money belonging to the as for payment to him, vide sub-section (4) of section 226 of the Income-tax Act. If this procedure had been followed there would be no difficulty for the Income-tax Officers to obtain the money for the purpose of the satisfaction of the taxability of the non-applicants, Mohammed Hanif and others. It appears that the Income-tax Officers approached the police directly and seized the money. Now the question is as to what orders are now to be passed in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mohammad Hanif and others, could not, without committing any illegality, obtain the entire amount from the Magistrate's Court. One does not know what might happen if the money is directed to be re-deposited in the Magistrate's Court. In an event the possibility of the entire amount being taken away by the non-applicants without discharging their tax liability, cannot completely be ruled out. Under these circumstances, if there has been substantial compliance of the provisions of the Income-tax Act and no serious illegality has been committed, the insistence on the part of the learned Magistrate for the deposit of the aforesaid amount in his court only for the purpose of observing a formality is, in my opinion, not called for. If the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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