Law:

Section:

Section 132A of the Income-tax Act, 1961 - Search and Seizure - Requisition of books of account, etc. - Whether every asset which is capable of being seized under section 132A cannot be subjected to rigour of section 132/132A and it is only when assessee fails to explain its source, then formation of belief stands made out in favour of revenue resulting in attracting rigour of section 132A - Held, yes - Police party seized currency notes from possession of employee of assessee-company and informed Income-tax department about said seizure - Thereafter, summons under section 131 were issued to assessee - Pursuant to those summons, assessee filed its books of account, and certificates issued by bank certifying withdrawal of amount in question prior to date of seizure - Chief Commissioner, however, issued authorization under section 132A and impounded books of account of assessee - Whether, on facts, authorization issued under section 132A was to be quashed - Held, yes FACTS The police party seized box full of currency notes from the possession of the employee of the assessee-company and informed the Income-tax department about said seizure. Thereafter, summons were issued under section 131 to the assessee. The assessee filed the books of account and the certificate issued by the bank and deposed that the entire money which was seized was already accounted for by the assessee in its books of account; that it was also reflected in the cash book, that it was in fact withdrawn by the assessee from its cash credit loan account maintained for running its business with the bank by two cheques; that the bank for the safety purpose provided a box to the assessee for carrying the currency notes; that the amounts in question were needed for the business purpose for making payments and, hence, small currency notes were also exchanged from the bank. The Director of Income-tax, however, issued a requisition order under section 132A. Pursuant to the said order, the seized amount was accordingly, handed over to the Chief Commissioner. Thereafter, the assessee filed an application before the Chief Commissioner praying for release of the seized amount. The Chief Commissioner,…

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