TMI Blog1983 (6) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... and seized it. Thereafter the Income-tax Department started proceedings and the Commissioner issued the proceedings under s. 132A(1) of the Act, evidenced by Ex. P-1 dated March 20,1980. They were initiated against Shri K.A. Karim. Shri K. A. Karim gave a statement before the Enforcement Officers to the effect that the cash came into his possession a month before the date of seizure and that it represented the sale proceeds of cashew kernels obtained without issue of bills. The ITO started proceedings under s. 132(5) of the Act. He issued notice to Shri K. A. Karim and also to M/s. Karuna Cashew Company, another firm of cashew exporters, who had paid Rs. 5, 19,500 in cash towards purchase of cashew kernels. The ITO issued notice to the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . P-1 and other proceedings is also asked for. The provisions of ss. 132, 132A and 132B of the I.T. Act, 1961, are assailed as unconstitutional and violative of articles 14 and 19 of the Constitution of India. On behalf of the respondents, a detailed counter-affidavit dated November 4, 1980, has been filed by the 1st respondent and another counter-affidavit dated November 18, 1980, by the 3rd respondent is also filed. The various averments which are made in the original petition are denied in the counter-affidavits filed by the respondents. But on a crucial fact regarding denial of reasonable opportunity to the firm, the petitioner, the counter-affidavit has admitted the averments made by the petitioner in that behalf, but has sought to j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the seizure, make an order, with the previous approval of the Inspecting Assistant Commissioner..." As stated, the petitioner firm claimed before the Ist respondent, the ITO, on July 21, 1980, that the amount seized belonged to it. It is also stated that an affidavit was filed before the officer reiterating its contentions (para. 13 of the O.P.-Ex. P-3). The officer conducted a detailed enquiry. He recorded statements from Shri K. A. Karim, managing partner, K. A. Karim Sons and Shri Karunakaran, managing partner, Karuna Cashew Company. He perused various documents and account books. Account books and other documents were produced by the petitioner also. The petitioner-firm was not aware of the materials gathered by the officer. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially, there was no room for the application of the rules of natural justice. The validity of that limitation is not questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice, one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied) The petitioner laid a claim and it was supported by an affidavit. It produced documents and accounts summoned by the officer. No further explanation was called for. Nor was the examination of the deponent of the affidavit considered necessary by the officer. The petitioner, perhaps, took it that its claim was being accepted. But it was not to be; and could it be so done without proper opportunity and proper procedure being adhered to ? The answer can only be in the negative. It cannot be disputed that the petitioner is adversely affected by Ex. P-5 order and injustice has been caused to it. It is plain that, in such circumstances, the ITO cannot be said to have acted in a just manner or reasonably or fairly. The " audi alteram partem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs. 5,52,000. In such a case, where the very title to the property or the ownership of the amount has to be adjudicated, it is only fair, proper and reasonable, that the person who claims that the amount belongs to him should be given an adequate and effective opportunity to substantiate his claim. The petitioner laid its claim, filed an affidavit and produced documents and accounts. The Revenue gathered materials and examined persons but the petitioner was not informed about them ; nor was an opportunity afforded to the petitioner to put forth its case on such material nor to meet the materials gathered by the Revenue. The procedure so adopted by the ITO, in such circumstances, is unfair, unjust and unreasonable and violates ..... X X X X Extracts X X X X X X X X Extracts X X X X
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