TMI Blog2019 (6) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... s accompanied with the recommendation for release of cash by the Income Tax Department, any attempt made by Ms. Sinha to justify either the requisitioning of the cash in question by respondent no.6 vide his letter dated 4.4.2019 at Annexure F/9 or in taking recourse to the provisions of Section 132 or to hold on to the money is absolutely without jurisdiction and without sanction of law because the guidelines nowhere empowers either the Income Tax Department to requisition the cash seized in an exercise conducted under the guidelines of the Election Commission of India nor does guidelines provide that any cash seized in the process is to be deposited with the Income Tax Department. The seizure itself was without sanction of law and which is apparent from the fact that no F.I.R. or complaint was instituted as provided under Clause 4 of the Guidelines nor the case was submitted to the court of competent jurisdiction within 24 hours nor the Committee so constituted under the Guidelines took any decision to order seizure of the cash, in absence of any F.I.R./ complaint instituted in terms of Clause 16(i). The illegality is perpetuated because the guidelines do not empower the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Prasad, Adv., Mr. Om Prakash Kumar, Adv. For the Income-tax Deptt. : Ms. Archana Sinha, Sr.S.C., Mr. Alok Kumar, Jr. S.C. ORAL JUDGMENT MR. JUSTICE JYOTI SARAN This writ petition filed under Article 226 of the Constitution of India raises question on the seizure of cash amounting to ₹ 26,90,000/- carried out by the Flying Squad led by respondent no.8, Executive Magistrate, Muzaffarpur and alongside seeks a direction to the respondent authorities especially the Income Tax Officer, QRT (respondent no.6) to release the seized cash which was deposited in the District Treasury at Muzaffarpur but has since been transferred to the Income Tax Department. The petitioner is a proprietorship firm engaged in wholesale trading of ready-made garments having its place of business in Zila Parishad market at Muzaffarpur. The petitioner is registered under the Goods and Service Tax Act, 2017 and is an assessee under the Income Tax Act, 1961 (hereinafter referred to as the Act ). The complaint of the petitioner is that on 26.3.2019 a Flying Squad under the leadership of respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax (Investigation) vide Annexures 8 series but all attempts have gone in vain and it is in these circumstances that the petitioner approached this Court questioning the entire exercise on its legality as well as lack of foundation for conducting seizure. The writ petition also tries to explain the collection of the amount in question but in view of the developments which have taken place subsequently, we do not consider it necessary to discuss the same for the present. This matter was taken up on a motion made on 1.5.2019 and this Court taking note of the grievance raised put the raiding team as well as the Income Tax department on notice seeking their response on the issue. The writ petition was next taken up on 8.5.2019 and when on noting that the exercise was carried out under the guidelines so issued by the Election Commission of India, the Court added the Election Commission of India as respondent no.9 and after serving notice on the retained counsel for the Commission, the matter was posted for 10th May, 2019. When the matter was taken up on 10.5.2019 Mr. Gautam Kejriwal, learned counsel appearing for the petitioner com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased. He submits that pursuant to the order of this Court the matter was examined and the Committee consisting of the Deputy Development Commissioner, Muzaffapur, the Nodal Officer and the Treasury Officer have concluded that the seized cash had no connection with the election and thus, the Income Tax Department has been asked for release of the cash. Copy of the order bearing Memo No. 197 dated 13.5.2019 is at Annexure J/9 to the affidavit of the Election Commission of India. On a pointed query as to how in absence of any stipulations present in the guidelines for deposit of the cash with the Income Tax Department, the money got transferred to the Income Tax Department, Mr. Siddhartha Prasad referred to a letter of the Income Tax Officer, IAP cum Officer QRT for Elections, 2019, Muzaffarpur, who vide letter dated 4.4.2019 addressed to the District Magistrate, Muzaffarpur requisitioned the cash amounting to ₹ 26,90,000/- seized from the petitioner, from the custody of the Treasury Officer for its deposit in the PD account of Principal Commissioner of Income Tax, Muzaffarpur under warrant of Authorization issued under section 132A of the Income Tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lines of the Election Commission of India and the seizure was not a consequence of a raid made by the Income Tax authorities under section 132 of the Income Tax Act, 1961 nor any order could be passed in purported exercise of jurisdiction under section 226(3) of the Act to requisition the money in absence of a duly constituted proceeding. In a last ditch effort Ms. Sinha appearing for the Income Tax Department by filing a supplementary counter affidavit which enclosed an extract of guidelines justified the requisition of seized cash as being an exercise under the said guidelines. Unfortunately the guidelines enclosed at Annexure A to the said affidavit though referred as the guidelines issued by the Election Commission actually is an extract of manual on Election Expenditure Monitoring issued by the Director General of Income Tax (Investigation), Bengalore. We have heard learned counsel for the parties and have perused the records and we are in no confusion to hold that in view of the conclusion drawn by the three-men Committee constituted under the guidelines of the Election Commission of India, a copy of which is enclosed at Annexure A/9 to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in succumbing to the dictates of the Income Tax Department to transfer the seized cash vide Annexure 5 to the writ petition on 11.4.2019 is dehors the guidelines and even the requisition made by respondent no.6 through his letter dated 4.4.2019 addressed to the District Magistrate, Muzaffarpur at Annexure F/9 vide order dated 11.4.2019 at Annexure 5 is wholly illegal and without sanction of law. What we find surprising is that even when the Committee constituted has accepted vide Annexure J/9 that the seizure was wrong, the Income Tax Department has proceeded to exercise jurisdiction over the cash seized as if the seizure made by the Flying Squad under the guidelines of the Election Commission of India was in fact in furtherance of exercise under section 132 of the Income Tax Act and the Flying Squad was acting as their agency. We find it rather strange that Ms. Sinha while espousing the cause of the Income Tax Department has completely failed to appreciate that neither the seizure was under section 132 of the Act nor the pre-requisite to an exercise of search and seizure under section 132 of the Act were satisfied nor the requisition satisfies the provisions of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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