# Income- Tax Officer Ward, Mau Revisionist v. Nazre Alam & Ors

- **Citation:** (2016) 3 ILRA 819
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-03-04
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/income-tax-officer-ward-mau-revisionist-v-nazre-alam-ors-43608
- **Pages:** 6

## Headnote

Director of Income Tax issued warrant of authorisation under Section 132A(1) of Income Tax Act -
Cash requisitioned and delivered to authorised Income Tax Officer - Proceedings under Sections
132A and 132(5) initiated -

Held, once requisition is made and assets are delivered, such delivery amounts to deemed seizure
under the Income Tax Act - Assets thereafter governed exclusively by provisions of the Act.

B. Application filed before Magistrate for release of seized money under Section 194 of Motor Vehicles
Act / Sections 451-457 Cr.P.C. - Income Tax Department not impleaded.

Held, after requisition under Section 132A, Magistrate has no jurisdiction to entertain application for
release - Criminal Court cannot enquire into ownership or nature of assets once special statute is set
in motion.

C. Sessions Judge directing release of money on ground that police could not transfer seized cash
without permission under Section 457 Cr.P.C.

Held, Income Tax Act being a special enactment overrides general provisions of Cr.P.C. - No prior
permission of Magistrate required for delivery of assets pursuant to requisition under Section 132A -
Order of Sessions Judge legally unsustainable-Power to retain or release requisitioned assets vests
solely in Income Tax authorities under Sections 132A, 132(5) and 132B - Criminal Courts lack
jurisdiction once statutory requisition is effected.

In Result - Criminal Revision allowed - Impugned order set aside.

Case Law Discussed:
820 INDIAN LAW REPORTS ALLAHABAD SERIES

## Text

3 All. Income- Tax Officer Ward, Mau Vs Nazre Alam & Ors.
819

40. Let a copy of this order be certified to the learned trial court for information and
necessary action.
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REVISIONAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 04.03.2016

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.

Criminal Revision No.- 1338 of 1995

Income- Tax Officer Ward, Mau ...Revisionist
Versus
Nazre Alam & Ors. ...Opposite Parties

Counsel for the Revisionist:
R. R. Agarwal

Counsel for the Opposite Parties:
Govt. Advocate

A. Cash amounting to Rs. 1,85,000/- seized by police during routine vehicle checking - Police, on
finding explanation of person in possession to be doubtful, intimated Income Tax Department -
Director of Income Tax issued warrant of authorisation under Section 132A(1) of Income Tax Act -
Cash requisitioned and delivered to authorised Income Tax Officer - Proceedings under Sections
132A and 132(5) initiated -

Held, once requisition is made and assets are delivered, such delivery amounts to deemed seizure
under the Income Tax Act - Assets thereafter governed exclusively by provisions of the Act.

B. Application filed before Magistrate for release of seized money under Section 194 of Motor Vehicles
Act / Sections 451-457 Cr.P.C. - Income Tax Department not impleaded.

Held, after requisition under Section 132A, Magistrate has no jurisdiction to entertain application for
release - Criminal Court cannot enquire into ownership or nature of assets once special statute is set
in motion.

C. Sessions Judge directing release of money on ground that police could not transfer seized cash
without permission under Section 457 Cr.P.C.

Held, Income Tax Act being a special enactment overrides general provisions of Cr.P.C. - No prior
permission of Magistrate required for delivery of assets pursuant to requisition under Section 132A -
Order of Sessions Judge legally unsustainable-Power to retain or release requisitioned assets vests
solely in Income Tax authorities under Sections 132A, 132(5) and 132B - Criminal Courts lack
jurisdiction once statutory requisition is effected.

In Result - Criminal Revision allowed - Impugned order set aside.

Case Law Discussed:
820 INDIAN LAW REPORTS ALLAHABAD SERIES
1. Union of India Vs. Judicial Magistrate (Eastern Railway), Mughal Sarai and another, 1983 (140) ITR
553

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. Heard learned counsel for the parties.

2. On 1.12.1994 while making a routine checking of vehicles by the police authorities
of Police Station Dohrighat, district Mau, a sum of Rs. 1,85,000/- was found in possession
of one Nazre Alam, who was travelling by Yamha Motor Cycle No. UP-50 A/1534. On
inquiry, he stated that money belonged to his maternal uncle Gurfan son of Hafiz Sultan,
who had given to him for delivering the same to Sri Wazir Ahmed, resident of Nai Bazar,
Chauri Chaura. The statement of opposite party 1 was found incorrect, on inquiry made by
Station Officer, Dohrighat and it was found that Wazir Ahmed was not residing at Chauri
Chaura, rather he is residing in Saudi Arabia.

3. Consequently, police authorities wrote a letter to Income Tax Officer, Mau informing
seizure of money and three loose papers from the possession of opposite party-1.

4. Thereupon, Income Tax Department proceeded under the provisions of Income Tax
Act 1961 (hereinafter referred as Act 1961). Warrant of authorization under section 132-A
(1) of Act 1961 was issued authorizing Assistant Director, Income Tax (Investigation),
Gorakhpur, Income-Tax Officer (C.I.B.), Gorakhpur and Income Tax Officer, Mau for
requisition of Rs.1,85,000/- from Station Officer, Dohrighat who had seized money from
possession of ?
 opposite party 1. In pursuance of warrant of authorization issued by
Director, Income Tax (Investigation) Kanpur, the aforesaid money was requisitioned by
Income Tax Officer (C.I.B.) Gorakhpur from Station Officer Dohrighat and thereafter, a
draft demand was drawn in favour of Commissioner, Income Tax, Allahabad P.D. Account
from Punjab National Bank Dohrighat.

5. The opposite party 1 filed application before Addl. Chief Judicial Magistrate
requesting for release of aforesaid money. It was rejected vide order dated 28.1.1995.

6. Thereafter, opposite party 1 and 2 preferred Criminal appeal before District and
Sessions Judge, Mau. Appeal was registered as Criminal Appeal No. 3 of 1995. District and
Sessions Judge, Mau allowed appeal, set aside order passed by Addl. Chief Judicial
Magistrate, Mau dated 28.1.1995 and directed Station Officer, Dohrighat to return money to
appellants 1 and 2.

7. Respondents 1 and 2 had not impleaded Income Tax Department either before the
Additional Chief Judicial Magistrate when they filed application for release of the money,
registered as Case No.41 of 1995 nor impleaded the said department in Criminal Appeal No.
3 of 1995, which was allowed by Sessions Judge, Mau vide impugned judgement dated
29.7.1995. Only State was impleaded as opposite party and Government Advocate appointed
by the State of U.P. to represent State appears to have been heard by the courts below.
3 All. Income- Tax Officer Ward, Mau Vs Nazre Alam & Ors.
821
Release application was filed under section 194 of Motor Vehicle Act 1988. Session court
considered the matter observing that accused was taken in custody by police under the
Provisions of Motor Vehicle Act and when made search of the person of accused under
section 51 Cr.P.C., recovered Rs.1,85,000/-. It is also observed that a warrant under section
132-A of Act, 1961 requisitioning the money seized by police, it was incumbent upon police
to first seek permission of Judicial Magistrate under section 457 Cr.P.C. to transfer money
otherwise the police was not competent to do it. With regard to proceeding of Income Tax
department no document was produced by the police authorities before court below.

8. Learned counsel appearing for revisionist contended that section 457 Cr.P.C. has
wrongly being relied by Session Judge for reason that Act 1961 is a special Act and shall
override otherwise provisions of Cr.P.C. Once requisition has been made by Income Tax
authority under section 132A, Magistrate is not entitled to go on for an inquiry into nature of
assets and ownership etc.. In support he placed reliance on a decision of this Court in Union
of India Vs. Judicial Magistrate (Eastern Railway), Mughal Sarai and another, 1983 (140)
ITR 553.

9. From record it transpires that police on a routine checking of vehicles on 1.12.1994
found a sum of Rs.1,85,000/- with Nazre Alam opposite party 1, who was travelling by
Yamha Motor Cycle No.UP-50A/1534. He explained that money belonged to his maternal
uncle Gurfan, who had given to him for delivering to one Wazir Ahmed, friend of Gurfan.
Statement of Nazre Alam opposite party 1 was found correct on inquiry made by Station
Officer, Dohrighat. Sri Wazir Ahmed was not found residing at Chauri Chaura the address
disclosed by opposite party 1 but is residing abroad i.e. Saudi Arabia. Police consequently
informed about aforesaid assets and some loose document found from the possession of
opposite party 1 to Income Tax Officer, Mau vide letter dated 3.12.1994. Income Tax Officer
in his turn sent a letter to Assistant Director, Income Tax, Gorakhpur requesting for
immediate action in matter. Director, Income Tax issued warrant of authorisation under
Section 132-A (1) of Act 1961 on 12.12.1994 authorising Sri S.N. Srivastava, Assistant
Director of Income Tax (Investigation) Gorakhpur, Sri Janardan Tripathi, Income Tax
Officer (C.I.B.), Gorakhpur and Sri Bharat, Income Tax Officer, Mau as 'Authorised
Officers' to requisition Rs. 1,85,000/- from Police Station, Dohrighat. Consquently, on
13.12.1994 Sri Janardan Tripathi, Income Tax Officer (C.I.B.) Gorakhpur requisitioned
Rs.1,85,000/- from Police Station, Dohrighat, who prepared a Demand draft in favour of
Commissioner, Income Tax, Allahabad P.D. Account from Punjab National Bank Dohrighat
and remitted assets which was seized by the Income Tax Department on 1.12.1994. On
15.12.1994 Additional Director, Income Tax, Gorakhpur enquired from Income Tax Officer,
Mau about issuance of notice under Rule 112-A of Income Tax Rules read with Section 132
of Act 1961. A notice under rule 112 was issued on 19.12.1994 to opposite party 1, served
on 26.12.1994. Date fixed for inquiry was 28.12.1994. Opposite party 1 sought adjournment
which was granted fixing 3.1.1995. Opposite party 1 vide letter dated 3.1.1995 informed
Income Tax Officer that money belonged to his maternal uncle and not to him. On 23rd
March, 2015 a notice under section 132(5) of Act was issued. On 30th March, 1995
statement of opposite party 1 was recorded. Another notice was issued on 5.4.1995 fixing
10.4.1995. No reply was given by opposite party 1 to notice dated 5.4.1995, hence Income
822 INDIAN LAW REPORTS ALLAHABAD SERIES
Tax Officer, Mau passed order under section 132(5) read with Rules 111 and 112 of Income
Tax Rules, 1962 for seizure of money requisitioned from Station Officer, Dohrighat on
13.12.1994. This order under section 132(5) was served on opposite party 1 on 10.4.1995.
Order under section 132(5) was passed by Income Tax Officer after taking prior permission
of Deputy Commissioner, Income Tax, Gorakhpur. Income Tax Officer created a liability of
Rs.1,98,966/-, which included tax interest and penalty for the year 1995-96 as the amount
seized under section 132(5) was less than total tax liability. An objection against order under
section 132(5) was filed by opposite party 1 under section 132(11).

10. In the meantime, it appears that opposite party 1 and 2 filed an application under
section 194 of Motor Vehicles Act before Additional Chief Judicial Magistrate, Mau
requesting for release of assets/money i.e. Rs. 1,85,000/- seized from possession of opposite
party 1. Application was rejected by Additional Chief Judicial Magistrate vide order dated
28.1.1995 holding that assets having been requisitioned and seized by Income Tax Officer,
Magistrate has no jurisdiction and this order was set aside by Sessions Judge, Mau by
impugned judgement dated 29.7.1995. Section 132A(1)(c), 2 and 3 relevant for this purpose
reads as under:

"132A. (1) Where the [Principal Director General or] Director General or
[Principal Director or] Director] or the [Principal Chief Commissioner or] Chief
Commissioner or [Principal Commissioner or] Commissioner], in consequence of
information in his possession, has reason to believe that-

(a). . . . . . .. . .

(b) . .. . . . . . . .

(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
(11 of 1922), or this 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, then, the [Principal Director General or] Director General or [Principal Director or]
Director] or the [Principal Chief Commissioner or] Chief Commissioner or [ Principal
Commissioner or] Commissioner] may authorize any [Additional Director, Additional
Commissioner,][Joint Director], [Joint Commissioner], [Assistant Director [or Deputy
Director]], [ Assistant Commissioner [ or Deputy Commissioner] or Income Tax Officer]
(hereafter in this section and in sub-section (2) of section 278D referred to as the
requisitioning officer) to require the officer or authority referred to in clause (a) or clause (b)
or clause (c), as the case may be, to deliver such books of account, other documents or assets
to the requisitioning officer.

(2) On a requisition being made under sub-section (1), the officer or authority
referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section
shall deliver the books of account, other documents or assets to the requisitioning officer
3 All. Income- Tax Officer Ward, Mau Vs Nazre Alam & Ors.
823
either forthwith or when such officer or authority is of the opinion that it is no longer
necessary to retain the same in his or its custody.

(3) Where any books of account, other documents or assets have been delivered to
the requisitioning officer, the provisions of sub-sections (4A) to (14) (both inclusive) of
section 132 and section 132B shall, so far as may be, apply as if such books of account,
other documents or assets had been seized under sub-section (1) of section 132 by the
requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or
clause (c), as the case may be, of sub-section (1) of this section and as if for the words "the
authorised officer" occurring in any of the aforesaid sub-sections (4a) to (14), the words "the
requisitioning officer" were substituted.]"

11. Section 132(5) of Act 1961 reads as under:

"5. Where any money, bullion, jewellery or other valuable article or thing
(hereafter in this section and in sections 132A and 132B referred to as the assets) is seized
under sub- section (1) or sub- section (1A), as a result of a search initiated or requisition
made before the 1st day of July, 1995, the Income Tax Officer, after affording a reasonable
opportunity to the person concerned of being heard and making such enquiry as may be
prescribed, shall, within one hundred and twenty days of the seizure, make an order, with the
previous approval of the Joint Commissioner,

(i) estimating the undisclosed income (including the income from the undisclosed
property) in a summary manner to the best of his judgment on the basis of such materials as
are available with him;

(ii) calculating the amount of tax on the income so estimated in accordance with
the provisions of the Indian Income- tax Act, 1922 (11 of 1922 ), or this Act;

(iia) determining the amount of interest payable and the amount of penalty
impossible in accordance with the provisions of the Indian Income- tax Act, 1922 (11 of
1922 ), or this Act, as if the order had been the order of regular assessment;

(iii) specifying the amount that will be required to satisfy any existing liability
under this Act and any one or more of the Acts specified in clause (a) of sub- section (1) of
section 230A in respect of which such person is in default or is deemed to be in default, and
retain in his custody such assets/ or part thereof as are in his opinion sufficient to satisfy the
aggregate of the amounts referred to in clauses (ii), (iia)] and (iii) and forthwith release the
remaining portion, if any, of the assets to the person from whose custody they were seized:

Provided that if, after taking into account the materials available with him, the
Income Tax Officer is of the view that it is not possible to ascertain to which particular
previous year or years such income or any part thereof relates, he may calculate the tax on
such income or part, as the case may be, as if such income or part were the total income
chargeable to tax at the rates in force in the financial year in which the assets were seized
824 INDIAN LAW REPORTS ALLAHABAD SERIES
and may also determine the interest or penalty, if any, payable or impassable accordingly:
Provided further that where a person has paid or made satisfactory arrangements for
payment of all the amounts referred to in clauses (ii), (iia) and (iii) or any part thereof, the
Income Tax Officer may, with the previous approval of the Chief Commissioner or
Commissioner, release the assets or such part thereof as he may deem fit in the
circumstances of the case."

12.It may be stated that Section 132 (5) has specifically been omitted w.e.f. 1.6.2002
but it was existing when proceedings of case in hand were initiated, hence its subsequent
omission would not be affected. On a reading section 132-A (1) (c), 2 and 3 read with
section 132(5) of Act 1961, I am clearly of opinion, if any assets has been seized by Police
Officer, same can be requisitioned by Authorized Person under section 132A and when
amount is remitted and delivered to Authorized Person of Income Tax department, it would
be deemed to be a seizure of assets under sub-section (1) of Section 132A by Requisitioned
Officer and will be governed by other provisions of Act 1961. At the time when application
was filed by opposite party-1 and 2 before Magistrate, Competent authority has already
requisitioned assets under section 132A from Police officials, who had thereafter delivered
the same to competent authority of Income Tax department. So there was no occasion to
seek release of such assets from police and that too without impleading Income Tax
Department. Money so seized can be released by competent authority under provisions of
Act 1961.

13. Thus, I am of the view that no application for release of money before
Magistrate/Session Court under provisions of Cr.P.C. was maintainable. The order passed by
Session Judge, thus, cannot be sustained.

14. Revision is allowed.

15. Impugned order passed by Session Judge, Mau is hereby set aside.
---------
REVISIONAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 16.03.2016

BEFORE

THE HON'BLE AMAR SINGH CHAUHAN, J.

Criminal Revision No. 3453 of 2014

Ram Dulare ...Revisionist
Versus
Raj Kumari ...Opposite Party

Counsel for the Revisionist:
C. P. Srivastava