SHAJAHAN Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE same question arises in the three cases. What is under challenge in these cases are orders issued to the bankers of the petitioners, Federal Bank, Punalur, restraining the bank from removing, parting with, or otherwise dealing with the money in the savings bank account of the petitioners, by the Income-tax Officer (authorised officer under Section 132), A-Ward, Quilon, issued under Section 132(3) of the Income-tax Act, 1961. I will extract in full the order challenged in O.P. No. 2453/75 marked as exhibit P-1 in that case :

(2.) THE contention taken up by the petitioners is that Section 132(3) does not confer any power on the authorised officer, that is, the first respondent, to issue a prohibitory order in the nature of exhibit P-I. THE reading of the said provision, it is said, would indicate that the proceedings envisaged therein must relate to money, etc., which has not been disclosed for the purpose of the Income-tax Act and which it is not practicable to be seized by invoking the provisions contained in Sub-section (1) of Section 132 for any reason whatsoever, one of which may be because it is in the immediate physical possession or control of a third person. Though the bank account may be one of the documents that will be scrutinized by the assessing authority while making a regular assessment, it cannot be said that the money found in a running account maintained by a businessman with a bank represents money which is in the possession or custody of such person, but which has not been disclosed for the purpose of the Act. Money deposited with the bank, even if it may not have been disclosed for the purpose of the Act, cannot be equated with physically concealed money.

(3.) RULE 112A. Inquiry under Section 132.--(1) Where any money, bullion, jewellery or other valuable article or thing (hereinafter referred to as assets) are seized, the Income-tax Officer shall within fifteen days of the seizure issue to the person in respect of whom enquiry under Sub-section (5) of Section 132 is to be made requiring him on the date to be specified therein (not being earlier than fifteen days from the date of service of such notice) either to attend at the office of the Income-tax Officer to explain or to produce or cause to be there produced evidence on which such person may rely for explaining the nature of the possession and the source of the acquisition of the assets.