(1.) IN this petition under Art. 226 of the Constitution, the petitioner wants this Court to quash and set aside the order dt. 6th Aug., 1990, passed by the CIT under S. 132(5) of the IT Act (hereinafter referred to as "the Act") and also the order dt. 7th March, 1991, passed by the CIT under S. 132 (12) of the Act.
(2.) ON 9th April, 1990, during combing operations by the police inspector of Ellisbridge Police Station, Ahmedabad, the residential premises of the petitioner were searched. The police found in the house of the petitioner Rs. 41,80,000. The petitioner stated before the police that it was his income from satta betting business. The police inspector, therefore, seized the same under S. 102 of the Criminal Procedure Code. Pursuant to the information received, the Director of Income tax (Investigation) authorised the requisitioning officer to require the police inspector to deliver the seized cash to the requisitioning officer. On 10th April, 1990, the Director of Income tax (Investigation) also issued an authorisation under S. 132 in respect of Locker No. 810 in Panchratna Safe Deposit Vault Private Limited, Ahmedabad, standing in the name of the petitioner. The locker was sealed on that date and, during the search made on 11th April, 1990, cash of Rs. 1,01,400 and a diary were found therefrom. They were seized by the authorised officers. The petitioner's statement was also recorded on that day under S. 132(4) of the Act. Thereafter, on 16th April, 1990, the petitioner was given a notice under S. 132(5) r/w r. 112A for explaining the nature of possession and the source of acquisition of the said cash. During the course of the proceedings under S. 132(5), the petitioner's statement was recorded on 23rd July, 1990. The Asstt. CIT, respondent No. 1, then passed an order on 6th Aug., 1990, under S. 132 (5), estimating the petitioner's income at Rs. 43,62,705, calculated the tax on that income at Rs. 23,31,664 and determined the amount of penalty imposable under S. 271(1)(c) at Rs. 23,31,664. As the total tax liability of the petitioner exceeded the cash that was seized from the petitioner, the first respondent ordered the seized cash to be retained in his custody. Aggrieved by that order, the petitioner made an application under S. 132(11) to the CIT who, by his order dt. 7th March, 1991, upheld the order of the Assessing Officer and rejected the application. As stated above, the petitioner has filed this petition challenging both the said orders.
(3.) THE relevant sections to be considered in this case are S. 132, S. 132A and S. 271. Sec. 132 provides for search and seizure. Sub s. (1) confers powers on certain officers to authorise the officers referred to in that sub section to enter and search premises and search any person and to seize the books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search and to take necessary incidental steps. Sub ss. (1A), (2) and (3) are not necessary for our purpose and they need not be referred to. Sub s. (4) empowers the authorised officer to examine on oath any person who is found to be in possession or control of such books or articles during the course of search and seizure. Any statement made by such person during such examination can be used in evidence in any proceeding under the Act. Sub s. (4A) creates a presumption in respect of the books of account, etc., found in the possession or control of any person in the course of a search. The presumptions that may be raised are that such books of account or articles belong to such person, that the contents of such books of account and other documents are true and that the signature and every other part of such books of account or other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by or to be in the handwriting of any particular person, are in that person's handwriting and in the case of a document stamped, executed or attested, that it was duly stamped or executed or attested by the person by whom it purports to have been so executed or attested. Sub s. (5), which is important for our purpose, reads as under :