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PETITIONER: COMMISSIONER OF INCOME TAX,ALLAHABAD & ORS.

       Vs.

RESPONDENT: MS. VINDHYA METAL CORPORATION & ORS.

DATE OF JUDGMENT:       05/03/1997

BENCH: S.C. AGRAWAL, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T      This appeal  is directed  against the  judgment of  the Allahabad High  Court dated  May 4, 1983 whereby Civil Misc. Writ Petition  No. 99  of 1992  filed by the respondents was allowed and  the authorisation  made by  the Commissioner of Income Tax (for short ’the Commissioner’) under Section 132- A of  the Income  Tax Act,  1961 (hereinafter referred to as ’the Act’)  and the  proceedings in consequence thereof were quashed. It  was also directed that action of the appellants in seizing  of books and documents as well as the sum of Rs. 17,353/- on  December 30,  1981 was  contrary to law and the same be returned to the respondents.      On December  25, 1981 one Vinod Kumar Jaiswal, while he was travelling  from Mirzapur to Calcutta by the Kalka Mail, was  detained   at  Moghal  Sarai  Railway  Station  by  the Government Railway  Police and an attached case containing a sum of  Rs. 4,63,000/-  was sized  from him on the suspicion that the  money was  stolen property  or had  been  obtained through some  other offence. A case under Section 411 I.P.C. read with  Section 41 and 102 Cr.P.C. was registered against him. An  intimation about  the seizure  of money was sent to the Income Tax Authorities at Varanasi on December 26, 1981. On December  29, 1981 the Inspecting Assistant Commissioner, Varanasi sent  an intimation  about it  to the  Commissioner about the  fact of  possession of  the aforesaid  amount  by Vinod Kumar Jaiswal and also that he did not have any papers and documents  regarding  ownership  or  possession  of  the amount and that no person in the name of Vinod Kumar Jaiswal was borne on the General Index Register of Income tax Office at  Mirzapur.   The  Commissioner   issued  a   warrant   of authorisation under Section 132-A(1) of the act on the basis of which  the Income Tax Office sent a letter of requisition to the  Station Officer  Incharge Government Railway Police, Moghal Sarai  requiring the  Station Office to hand over the seized sum of money to him (Income Tax Officer) who had been authorised by  a warrant of authorisation to receive it. The Inspecting Assistant  Commissioner, Varanasi, in exercise of his power under Section 132 of the Act, authorised search of the  residential   premises  of   Rajendra   Kumar   Pandey, respondent No.2, a partner of M/s Vindhya Metal Corporation,

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Imamganj,  Mirzapur,   respondent  no.1.   The  Income   tax Inspector visited  the premises  respondent No.1 on December 29, 1981  and found entered in the books of account that the aforesaid amount  of Rs. 4,63,000/- had been handed over the Vinod Kumar  jaiswal, who  was the  nephew of  Santosh Kumar Gupta (Jaiswal),  respondent  No.3,  for  being  carried  to Calcutta tin  connection with the business of the said firm. On December  30, 1981  the search  party which  searched the premises of  respondent No.1 carried away the sum of Rs. 17, 353/- found as total balance and the books of account. After completing the  investigation the  Railway Police  submitted the final  report investigation the Railway Police submitted the final  report on  January 21, 1982 wherein it was stated that the  money found  in possession  of Vinod Kumar Jaiswal did not  represent stolen property or property acquired from any offence  and the  said sum  belonged to respondent No.1, Prior to that, an application before the Judicial Magistrate (Railway), Varanasi  praying the   amount  which belonged to the respondents  and was  being carried  by Vinod Kumar, who was serving  as a Munim with respondent No.1, be released to the applicant  or in  favour of  Vinod Kumar. on  January 4, 1982 the  Income Tax  Officer requisitioned  the said amount and on  January 13,  1982  he  filed  an  objection  to  the application submitted by Rajendra Kumar Pandey. The Judicial Magistrate, by  his order  dated February  3, 1982, rejected the said objection of the Income Tax Department and directed the return of money to Rajendra Kumar Pandey. The said order of the  Magistrate was assailed by the Income Tax Department by filing  a revision  before the Allahabad High Court which was allowed  by the High Court by order dated April 19, 1982 and  the   Income  Tax  Department  was  permitted  to  take possession of the sum of Rs. 4,63,000/-.      In these  circumstances, the  Writ Petition,  which has given rise  to this  appeal, was  filed  by  the  respondent before the  Allahabad High  Court wherein  they assailed the validity of  the warrant  of  authorisation  issued  by  the Commissioner under Section 132-A(1) of the Act on the ground that condition  precedent for  the exercise  of  the  powers under the  said provision was not satisfied. Before the High Court  an   affidavit  was   filed  by   Shri  Hira   Singh, Commissioner of  Income Tax,  who had  issued the warrant of authorisation. After examining the file containing the order passed by the Commissioner, the High Court has observed that the information  on the  basis of which the Commissioner had issued the warrant of authorisation was as follows :-      (a)  a sum  of Rs.  4,63,000/-  had      been  seized   by  the   Government      Railway Police  from the possession      of   one   Vinod   Kumar   Jaiswal,      resident of  Imamganj, Durga  Devi,      Mirzapur;      (b)  at the  time to the seizure by      the Railway  Police, no  papers  or      documents   in    regard   to   the      ownership  or   possession  of  the      amount were  in possession of Vinod      Kumar Jaiswal, and      (c)  no person by the name of Vinod      Kumar  Jaiswal  was  borne  on  the      General Index  Register of  Income-      tax  assessee   of  the  Income-tax      Office at Mirzapur.      The High Court, after considering the material on which reliance was  placed by  the Commissioner,  has held that on the  information   in  possession  of  the  Commissioner  no

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reasonable person  could have  entertained a belief that the amount in  possession of  Vinod  Kumar  Jaiswal  represented income which  would not  have  been  disclosed  by  him  for purpose of the Acts. The High Court has observed :-      "Vinod Kumar  Jaiswal, according to      the information  in  possession  of      the Commissioner,  was not borne on      the  General   Index  Register   of      Income-tax assessee  of the Income-      Tax Offices  at Mirzapur  to  which      place   he   belonged.   Obviously,      therefore, there  was not  occasion      for  him   to  have  disclosed  the      amount  as   his  income   in   any      assessment  proceedings  under  the      Act.  Without  anything  more  than      what was  actually there before the      Commissioner,  how  could  it  have      been assumed that he would not have      disclosed it  for purposes  of  any      proceedings under  the  Act.  There      was nothing before the Commissioner      to suggest  that it  was, in  fact,      wholly or  in part,  income of  any      person connected  with Vinod  Kumar      Jaiswal so  as to  induce a  belief      that, if  called upon,  Vinod Kumar      Jaiswal would not have disclosed it      for the  purpose of  the  Act.  The      mere fact  this amount  and did not      have   any   documents   with   him      regarding    its    ownership    or      possession could  not be treated as      appears to  have been  done by  the      Commissioner     as     information      relatable to  a conclusion  that it      represented income  which would not      have been  disclosed by Vinod Kumar      Jaiswal of purpose of the Act. Mere      unexplained   possession   of   the      amount,  without   anything   more,      could hardly be said to  constitute      information which  could be treated      as  sufficient  by  the  reasonable      person,  leading  to  an  inference      that it  was income which would not      have been  disclosed by  the person      in possession  for purpose  of  the      Acts"      We have  heard the learned counsel for the appellant in support of  the appeal  and we  have  perused  the  impugned judgment of  the High Court. Having considered the facts and circumstances of  the case,  we do  not find  any ground  to interfere with  the impugned judgment of the High Court. The appeal is, therefore, dismissed. No order as to costs.