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TMI Blog2025 (5) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... for allowing the application preferred by the petitioner - Income Tax Department to requisition muddamal cash amount of Rs. 35,28,000/-. 3. The brief facts leading to filing of the present petition are as under, 3.1 The respondent no.2 herein has lodged FIR being C.R. No.11209041220120/2022 with Pranjit Police Station, Sabarkantha for the offences under Sections 454 and 380 of the Indian Penal Code on 02.02.2022 alleging inter alia about the theft of golden chain worth of Rs. 70,000/-, silver ring worth of Rs. 20,000/- totalling to Rs. 90,000/-. 3.2 On 27.02.2022, after registration of the aforesaid FIR, the respondent no.2 had paid visit at the police station concerned and informed about stealing of his passport and cash worth of Rs. 1,40,00,000/- 3.3 Pursuant to registration of the aforesaid FIR, the investigation was put into motion and the accused persons were arrested and accordingly, search and seizure was made by drawing necessary panchnama. 3.4 During the course of investigation, the police has recovered Rs. 60,29,000/- and Swift Car worth of Rs. 1,75,000/- purchased from the stolen rupees out of total Rs. 1,40,00,000/- as also golden and silver ornaments. 3.5 Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a for the respondent nos.1 and 3 and learned advocate, Mr. Amit Chaudhary for the respondent no.2. 5. Learned advocate, Mr. Varun Patel appearing for the petitioner has referred to the facts of the case and submitted that on the strength of the registration of the FIR lodged by the respondent no.2 herein with regard to theft of silver and golden ornaments worth of Rs. 90,000/-, the investigation was put into motion, however subsequently, the respondent no.2 herein had come with a case of theft of passport and cash amount of Rs. 1,40,00,000/- and during the course of investigation, the police has recovered Rs. 60,29,000/- and Swift Car worth of Rs. 1,75,000/- purchased from the stolen rupees. He further submitted that thereafter, the Police Officer of Prantij Police Station wrote a letter to the petitioner - department for carrying out inquiry with regard to the cash lying in the house of the respondent no.2 herein and pursuant thereto, necessary inquiry was carried out by calling the respondent no.2 and in the said interrogation, the respondent no.2 has failed to explain the source of Rs. 35,28,000/- out of total amount of Rs. 1,40,00,000/- and thus the said amount remained unexpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actions permitted under the law. He submitted that however as stated above, criminal misc. application was filed for some clarification, which was allowed by the Coordinate Bench and directed to deposit entire amount in P.D. Account and the said practice is required to be adopted in other cases also. He submitted that at the time of preferring an application before the learned Judge concerned, earlier order dated 18.01.2018 was placed on record and pointed out that the petitioner - department is facing serious problem to keep the said amount in fixed deposit in the name of the original complainant and because of passing order as stated above, it is practically impossible on the part of the department to keep the amount in fixed deposit in the name of the respondent no.2, therefore, present application is preferred. He further submitted that however as stated above, by impugned order, though the petitioner - department is permitted to take all actions permissible under the law with a direction to make fixed deposit of Rs. 35,28,000/- in the name of the respondent no.2 with any Nationalized Bank, which is against the order passed by the Coordinate Bench of this Court. It is, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to rely upon the decision of the Coordinate Bench of this Court in case of Vipul Chavda (supra) upon which reliance has been placed by learned advocate for the petitioner, wherein the Coordinate Bench of this Court has considered the maintainability of the petition before this Court, the provision of the Income Tax Act as also decisions of the Hon'ble Supreme Court as well as other High Courts and allowed the Income Tax Department to undertake all actions available under the law. Relevant paragraphs of the said decisions are produced hereunder, "11. I am not impressed by the preliminary objection raised on behalf of the respondent No.2 as regards the maintainability of this application under Article 227 of the Constitution of India on the ground that the impugned order is revisable and, therefore, a revision application should have been filed. It is always open for this Court, in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India, to look into the legality and validity of an order passed by the Magistrate. In such circumstances, I overrule the preliminary objection. I would like to examine the matter on merits rather than rejecting this applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 time being in force, or (b) any books of account or other documents will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not or would not produce or cause to be produced, such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or (c) 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, 1922, or this Act by any person from whose possession or control such assets hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason 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 the time being in force, the request can be made and such authority or officer shall deliver the books of account, other documents and assets to the requisitioning officer either forthwith or if the authority is of the opinion that it is no longer necessary to retain in his custody. 3. It is pertinent to note that the Court while denying the request of the Incometax Department on the ground that no summons so far has been issued nor any search was commenced, failed to notice the provision of section 132A(1)(c), which permits requisition on the officer having reason to believe that any asset represent either wholly or partly income or property which has not been disclosed for the purpose of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to complete the proceedings initiated by the Incometax 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 Rs. 30 lakh to the complainant on his furnishing surety and directed the police to retain the amount of Rs. 12 lakh in its custody. The Department was also directed to complete the proceedings within 15 days under intimation to the Court if any income-tax liability was accruing to the Department and to pass necessary order. It was directed that in the event of any tax liability accruing to the Department, the respondent would pay the same immediately under the intimation of the Court. Warrant of authorisation was served upon the police and it was though informed of the Revision Application being pending before the Court, the police handed over the currency notes to the complainant, relying upon the order passed by the trial Court. 2. This Court allowed the application of the tax authority on the ground that the question of huge currency notes was involved and if proceedings of inquiry under section 132A of the Act were initiated, the truth would come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire 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 of the Income-tax Department for further process in terms of Incometax Act, including for assessment under section 153, if found necessary. While so holding, reliance is placed on the decision of this Court in the case of Deputy Director of Income-tax (Investigation) v. State of Gujarat (supra). 11.2 The Court also held that there is no rival claims with respect to such currency notes or other valuable assets. While holding that the learned Sessions Judge committed error in interfering with the order passed by the learned Magistrate, it further directed that in the case of rival claims, if ultimately the Income-tax Department does not require the currency notes for its purpose, the same would have to be placed at the disposal of the learned Magistrate for passing appropriate orders under section 452 of the Code of Criminal Procedure. 12. Chapter XXXIV of the CrPC under the heading of Disposal of Property provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 so as to prevent the evidence being lost, altered or destroyed. The Court should see that photographs of such articles are attested or countersigned by the complainant, accused as well as by the person to whom the custody is handed over. Still however, it would be the function of the Court under Section 451, Cr. P.C. to impose any other appropriate condition. 14. In case, where such articles are not handed over either to the complainant or to the person from whom such articles are seized or to its claimants, then the Court may direct that such articles be kept in bank lockeRs. Similarly, if articles are required to kept in police custody, it would be open to the SHO after preparing proper panchnama to keep such articles in a bank locker. In any case, such articles should be produced before the Magistrate within a week of their seizure. If required, the Court may direct that such articles be handed over back to the Investigating Officer for further investigation and ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration is as to whether the cash of Rs. 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 save some of the respondents who have enormous following, being religious heads, this huge amount of Rs. 8.10 crore was arranged for bribing the Investigating Agency. It is nowhere coming on record that any trap was organised that the Court may require the detailed number of series of currency notes, which also in any case at the time of panchnama, the police ought to have done. Even if it is not done, it would not be difficult to so do it and the amount cannot continue to lie with the Investigating Officer. The Court in the alternative also could have thought of placing it in the Fixed Deposit or the bank locker with any Nationalised Bank for the purpose of safety and security of the currency notes. There is no purpose worth the name that would be served if the amount continues to lie with the Investigating Officer. This being a law on the interim custody during the pendency of the trial, the vital question that is addressed by this Court is the one raised by the applicant-Department being the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 the authority should exercise his powers under Section 132A, must be decided by the authority and not by the High Court. The concerned authority under Section 132A alone is entrusted with the powers to administer it. If from the material disclosed it may be prima facie said that he had reason to believe that any of those conditions existed, it is not open to the High Court, exercising powers under Article 226 of the Constitution, to set aside the warrant of authorization on a reappraisal of the evidence. [22] This Court in the decision rendered in the case of Deputy Director of Income Tax (Investigation) (Supra) observed in para 14, 15 and 16 as under: 14. This Court is now required to see whether the applicant was entitled for custody of muddamal seized by the police for completion of proceedings initiated by the Department or not. Section 132 of the Act would be relevant in this respect. Section 132 stipulates that, on a requisition being made under sub-section (1), the officer or authority referred to in Clause (a) or C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, this Court, vide order dated 24th April 2014 passed in Special Criminal Application No.2499 of 2013, observed in para 6 as under: 6 Having heard learned counsels for the parties, considering the provisions of Sections 132A(2), 132B and 153A of the Income Tax Act, 196 1 and the case relied by the learned Senior Advocate for the applicant Department, I am of the view that the impugned order is contrary to the provisions of the Income Tax Act, 196 1 and currency notes seized by the police during the search and seizure in exercise of powers under Prohibition of Gambling Act, deserves to be handed over to the Income Tax Department. Accordingly, order dated 28.06.2013 passed by the learned Metropolitan Magistrate, Court No.22, Ahmedabad in Misc. Application No.108 of 2013 is hereby quashed and set aside and the Incharge Police Officer of Ellisbridge Police Station, Ahmedabad shall hand over muddamal being currency notes of Rs. 4,78,356/- and Rs. 36,30,990/- to the concerned officer of the petitioner department. [25] Thus, in view of the decisions rendered by this Court in the aforesaid cases, the respondent No.1 herein Income Tax Department is entitled to get the custody of Muddama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to undertake all actions permitted under the law, however, he shall deposit the entire amount of Rs. 13 lac in the P.D. Account in accordance with the provisions and Rules of the Income Tax Act within a period of four weeks from the date of the receipt of this order." 12. Thus from the above, it transpires that earlier it was ordered that the department is entitled to retain the cash till final conclusion of the proceedings under the provision of the Income Tax Act but subsequently, it was modified and ordered that the department shall be free to undertake all actions permitted under the law and shall deposit the entire in the P.D. Account in accordance with the provisions and Rules of the Income Tax. 13. Now coming back to the facts of the case, it is found out that the respondent no.2 herein, who is the first informant, has lodged an FIR before the police station for the theft committed by the accused in his house for the golden and silver ornaments worth of Rs. 90,000/-, however subsequently, the respondent no.2 informed about the theft of his passport and cash worth of Rs. 1,40,00,000/- and accordingly, the investigation was carried out and during the investigation, the po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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