Law: Income Tax Act, 1961

Section: 132,132A

Income-tax----Search and seizure---Commissioner---Power to issue warrant of authorisation---Person found in possession of big sum of money with no proof of ownership---Person in possession not an assessee on files of I.T.O.---Material not sufficient for reasonable belief that sum represented income that would not be disclosed---Issue of warrant of authorisation not valid---Indian Income Tax Act, 1961, Ss. 132 & 132-A. One V, a resident of Mirzapur, was detained while travelling to Calcutta by train and cash of Rs.4,63,000 was seized from him on the suspicion that the money was stolen property or had been obtained through some other offence lie was charged under section 411 of the Indian Penal Code. Intimation of the seizure of the money was sent to the Commissioner of Income-tax by the Inspecting Assistant Commissioner alongwith the information that V had no papers regarding ownership or possession of the money, and that V was not an assessee on the files of the Income-tax Office at Mirzapur. The Commissioner issued a warrant o: authorisation under section 132-A(1) of the Income Tax Act, 1961, for the Income-tax Officer concerned to receive the money from the railway police. A search was conducted under section 132 of the Act on the premises of the respondent firm, during which the books of the firm were found to contain an entry that the sum of Rs.4,63,000 had been handed over to V, who was serving as munim of the firm, for being carried to Calcutta in connection with the business of the firm,. A sum of Rs.17,353 being the cash balance, and the books of account were seized from the respondent-firm. The railway police reported that the money found in the possession of V did not represent stolen property or property acquired from any offence, and that the sum belonged to the respondent firm. The respondent firm filed an application for return of the money carried by V. The magistrate ordered return, but on a revision petition by the Income-tax Department, the High Court permitted the Income-tax Department to take possession of it. The respondent firm filed a writ petition questioning the validity of the warrant of authorisation issued by the Commissioner…

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