TMI Blog2018 (2) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby allowed. The order passed by the J. M. F. C, Kathor below Exh. 3 is hereby quashed and set aside. It is declared that the department is entitled to retain the cash till the final conclusion of the proceedings under the Income Tax Act. The Investigating Officer is permitted to handover the Muddamal currency notes amounting to ₹ 13,00,000/- (Thirteen Lakh) to the applicant-Deputy Director of Income Tax (Investigation), Unit-II, Surat at the earliest. It is clarified that prior to handing over the Muddamal currency notes, the Investigating Officer shall get the videography of the currency notes done as provided in the decision in the case of Sunderbhai Ambalal Soni vs. State of Gujarat, [2002 (10) TMI 773 - SUPREME COURT], and if necessary, to carry out the Panchnama with the serial numbers of the currency notes, if not already done. A copy of the Panchnama or the videography be placed before the court concerned and the same shall be furnished to the Income Tax Department so also to the respondent No. 2-original first informant. The applicant-department shall be free to undertake all actions permitted under the law, however, he shall make the Fixed Deposit of the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigating Officer one Shri M. B. Tomar, In-charge Police Inspector, Kamrej Police Station, Surat addressed a letter dated 11. 01. 2017 to the Deputy Director of Income Tax (Inv. )-II, Surat in this regard. It appears that two applications came to be filed in the court of the J. M. F. C, Kathor being Exhibits-3 and 6 respectively under the provisions of sections 451/457 of the Cr. P. C. These two applications were filed for interim release and possession of the currency seized by the police. Exh. 3 came to be filed by the Income Tax Department, whereas Exh. 6 came to be filed by the original first informant, i. e,. the respondent No. 2 herein. 2. The J. M. F. C, Kathor, by a common order, rejected both the applications. The department thought fit to challenge the order passed by the J. M. F. C directly before this Court without filing any revision application before the Sessions Court, whereas on the other hand, the first informant thought fit to file a revision application before the sessions court. The revision application before the Sessions Court is pending as on date. 3. Mr. M. R. Bhatt, the learned senior counsel appearing for the applicant submitted that having regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agistrate is revisable and, therefore, the applicant should be relegated to the remedy of filing a revision application before the Sessions Court. According to Mr. Vyas, his client has also filed a revision application before the Sessions Court and, therefore, both the revision applications could have been heard together. 7. Mr. Vyas, independent of his first submission, contended that it is too early for the department to say that the cash is unaccounted. The first informant could be said to be the victim. He was robbed of a huge amount in cash. It is always open for the department to initiate the proceedings, if the case, according to the department, is one of an unaccounted cash. However, according to Mr. Vyas, keeping in mind the object and spirit of sections 451 and 457 of the Code, it is the owner of the Muddamal who can be said to be entitled to possession, pending the criminal proceedings. In such circumstances, referred to above, according to Mr. Vyas, there being no merit in this application, the same be rejected. 8. Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of Lalit Bisnoi vs. State of Gujarat , Criminal Revision Application No. 77 of 2015 , decided on 31st July, 2015, a Coordinate Bench of this Court dealt with an identical issue and has held as under; 8. It would be profitable to reproduce section 132A of the Act, which reads as under : 132A : Powers to requisition books of account, etc. ( 1) Where the Director General or Director or the Chief Commissioner or Commissioner, in consequence of information in his possession, has reason to believe that- ( a) any person to whom a summons under subsection (1) of section 37 of the Indian Income-tax Act, 1922, or under sub-section (1) of sec. 131 of this Act, or a notice under subjection (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents, as required by such summons or notice and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this section and as if for the words the authorised officer occurring in any of the aforesaid sub-sections (4A) to (14), the words the requisitioning officer were substituted. 9. The provision of section 132A provides for the authority prescribed in the said provision in consequence of information in his possession has reason to believe that any person has omitted or failed to produce such books of account or other documents as required by the summons issued under sub-section (1) of section 37 or sub-section (1) of section 131 or sub-section (4) of section 22 or sub-section (1) of section 142 of the Act. 1. It further requires the officer or authority to deliver such books of account, other documents or assets to the requisitioning officer. 2. Section 132A(1)(c) provides that in consequence of the information in his possession, if the officer has reason to believe that any assets represent either wholly or partly income or property which has not been or would not have been disclosed for the purpose of Income-tax Act, 1922, by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rency notes and informs the Income-tax Department, the requisition has to be made. The Court has also held that the inquiry under section 451 of the Code of Criminal Procedure and one under section 132A of the Act are quite different. There are limited powers under section 451 of the Code of Criminal Procedure, whereas under section 132A of the Act, a specific provision is made for such purpose. Before the High Court, the case was of stealing of cash of ₹ 42. 50 lakh and the employee of the concerned complainant was arrested from whom such amount of ₹ 42. 50 lakh was seized. The intimation was given by the police officer to the Income-tax Department to approach the trial Court to initiate the proceedings. The complainant also moved before the trial Court for getting the currency notes and the Deputy Director of Income-tax submitted an application to hand over the currency notes to complete the proceedings initiated by the Income-tax Department against the respondent. 1. The trial Court had rejected the application filed by the Deputy Director of Income-tax Department and handed over the currency notes of ₹ 30 lakh to the complainant on his furnishing surety ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the order passed by the Magistrate handing over custody of the currency notes to the Income-tax Department. The Appellate Forum also directed the learned Magistrate to hold inquiry in terms of provisions of the CrPC and to pass final order in respect of such muddamal article. The Income-tax Department had pitched its case on the strength of the provision of section 132A of the Act, under which the requisition for currency notes was made by the competent authority. This Court held that under section 132A of the Income-tax Act, the competent authority if has reason to believe inter alia that any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purpose of the Income-tax Act, by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force, may require such authority to deliver such books of account, other documents or assets to the concerned officer. In exercise of such powers, when the order of requisitioning cash currency was passed, the learned Magistrate correctly placed the currency notes at the disposal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in AIR 2003 SC 638 , wherein the Apex Court has held and observed as under : Valueable Articles and Currency Notes : 11. With regard to valuable articles, such as, golden or silver ornaments or articles studded with precious stones, it is submitted that it is of no use to keep such articles in police custody for years till the trial is over. In our view, this submission requires to be accepted. In such cases, Magistrate should pass appropriate orders as contemplated under Section 451, Cr. P. C. at the earliest. 12. For this purpose, if material on record indicates that such articles belong to the complainant at whose house theft, robbery or dacoity has taken place, then seized articles be handed over to the complainant after :- ( 1) preparing detailed proper panchnama of such articles; ( 2) taking photographs of such articles and a bond that such articles would be produced if required at the time of trial; and ( 3) after taking proper security. 13. For this purpose, the Court may follow the procedure of recording such evidence, as it thinks necessary, as provided under Section 451, Cr. P. C. The bond and security should be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuable muddamal article and the currency notes', it is made obligatory upon all the Courts trying the criminal cases to expeditiously and judiciously exercise the powers under section 451 for the custody and disposal of the property. On account of occurrences of theft and misappropriation, so also of irreversible damage to the property, the Apex Court was thoroughly concerned and directed expedient steps to be taken by the concerned Court. It is also further directed that wherever such property is required for the purpose of trial, under which circumstances, the Court can photograph them or video record the muddamal. IT has also required that when valuables are not handed over to the applicant or complainant, the same be directed to be kept in a bank locker. In no circumstances either for identification or investigation it is to be kept with the Investigating Officer. The very procedure is prescribed for currency notes as well. 16. In such a background, the aspect that requires consideration is as to whether the cash of ₹ 8. 10 crore would be necessary to be produced as muddamal of bribe or otherwise at the time of trial. It is the case of the prosecution that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record it appears that the respondent No. 1 herein as a Deputy Director of Income Tax (Investigation), Unit 3, Surat, had filed the application under Section 132A of the Act. The concerned authority of the Income Tax Department authorized the respondent No. 1 to initiate the aforesaid proceedings. In the affidavit filed on bahalf of respondent No. 1, it is specifically stated that based on the information made available and after causing necessary inquiry the competent authority under the Income Tax Act was satisfied about the ingredients of Section 132A of the Act to the effect that the contents of 42 gunny bags relate to transactions not recorded in the books of account. It is further stated in the affidavit by the respondent No. 1 that the authorization under Section 132A of the Act is not under challenge in the present proceedings. Thus, whether there was adequate material for the competent authority to form the required satisfaction either under Section 132 or Section 132A of the Act is not a question which can be agitated by any assessee. This Court in the decision rendered in the case of Sunil Vidhyasagar Gat (Supra) has held that Whether on the information in his possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 07. 10. 2010 rendered in Special Criminal Application No. 1009 of 2010, observed as under: Under Section 132A of the Income Tax Act, the competent authority if has reason to believe inter alia that any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Indian Income Tax Act, by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force, may require such authority to deliver such books of accounts, other documents or assets to the requisitioning officer. In exercise of this power, the order for requisitioning cash currency was passed. Learned Magistrate, therefore, correctly placed the currency notes at the disposal of the Income Tax Department for further process in terms of Income Tax Act including for assessment under Section 153, if so found necessary. [ 24] Similar view is also taken by this Court in Criminal Revision Application No. 333 of 2013. In another case, this Court, vide order dated 24th April 2014 passed in Special Criminal Application No. 2499 of 2013, observed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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