P M KUNHABDULLA HAJI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE original petition is filed for the issue of a writ of certiorari to quash Ex. P-20 order dated October 15, 1985, passed by the first respondent under Section 132(5) of the Income-tax Act, 1961. THEre is also a prayer for the issue of an appropriate writ or direction to declare that the amount of Rs. 1,50,000 seized on July 4, 1982, belongs to the petitioner and to direct respondents Nos. 1 and 2 to forbear from giving effect to exhibit P-20 and directing the respondents to return the amount of Rs. 1,50,000 with interest due thereon to the petitioner.

(2.) ON July 4, 1982, the officers of the Special Customs Preventive Unit, Kanhangad, apprehended the third respondent--Shri K. K. Abdulkareem --and Shri K. Hamza and recovered a sum of Rs. 40,000 and Rs. 1,10,000 from them, respectively. They were proceeding to Kuttiangadi from Kanhangad by bus. No prima facie case under the Customs Regulations was disclosed. The Enforcement Directorate made over the case to the Income-tax Department for investigation. The money was taken over by the Department under Section 132A(1) of the Income-tax Act on June 27, 1985. The first respondent--Income-tax Officer--issued notices to the third respondent--Shri K.K. Abdulkareem--Shri K. Hamza and Shri P. M. Hasan (Ashraf Fabrics, Kanhangad) (uncle of the petitioner) calling for explanation regarding the nature of possession and source of acquisition of the monies. They furnished their explanations. Apart from the above three persons, the petitioner--P.M. Kunhabdulla Haji--also gave a statement before the first respondent. After considering the various explanations and the statements of the parties, the first respondent held that the possession and ownership of the total sum of Rs. 1,50,000 vested with Shri K.K. Abdulkareem and the source of acquisition and nature of possession of money seized have to be considered in his hands. After considering the statements of Shri Abdulkareem, Shri K. Hamza, Shri P, M. Hassan (uncle of the petitioner) and P. M. Kunhabdulla Haji (petitioner herein) and the relationship between the parties and the nature of possession of the money seized from K. K. Abdulkareem (3rd respondent herein) and his friend, Shri K. Hamza, it was found that the explanations offered by the third respondent and Hamza are not satisfactory and that the amount should be treated as only part of his undisclosed income. Since the amount was seized on July 4, 1982, on the basis of the materials on record, a summary assessment was made for the financial year 1982-83, This order (exhibit P-20) dated October 15, 1985, passed under Section 132(5) of the Income-tax Act is in challenge in this original petition. I heard counsel for the petitioner, Mr. S. A. Nagendran. It is the petitioner's case that the amount seized from the third respondent--Abdulkareem--and Shri K. Hamza belongs to him. Briefly stated, the plea of the petitioner is that he had given a loan to M/s. Ashraf Fabrics, Kanhangad, in 1980. While the petitioner was in India, M/s. Ashraf Fabrics returned the balance of the loan Rs. 1,50,000, on June 14, 1982. It was kept in the house of the petitioner in Kanhangad. The petitioner instructed his wife, Smt. Beefathumma, to give the said amount to Shri O.P. Ibrahimkutty, Fish Merchant, Payangadi. Thereafter, he left India for Sharjah on June 16, 1982. The petitioner's wife entrusted the amount of Rs. 1,50,000 to her brother. Shri Abdulkareem, to hand over the amount to Shri O. P. Ibrahimkutty on July 4, 1982. The third respondent along with his friend, Shri K. Hamza, proceeded to Payangadi by bus to hand over the amount to Ibrahimkutty and on the way the amount was seized by the Special Customs Preventive Unit. The amount really belongs to the petitioner. It has been so stated before the first respondent by all concerned. Even so, holding that there are contradictions in the various statements furnished by the parties, the first respondent held that the money seized belongs to the third respondent. This is patently illegal. Exhibit P-20 order suffers from serious infirmity and deserves to be annulled. So runs the argument of petitioner's counsel.

(3.) THE original petition should fail on a more fundamental ground. Section 132(11) read with Section 132(12) of the Income-tax Act provides an equally efficacious alternate remedy to the petitioner to make an application before the Commissioner of Income-tax stating his objections and requesting for appropriate relief. Sections 132(11) and 132(12) of the Income-tax Act are as follows :