PANCHUGURUMURTHY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two writ petitions may be dealt with together, since they relate to almost the same subject - matter, though in respect of two different writ petitions with different reliefs pertaining to the different stages of action.

(2.) WRIT petition No. 21200 of 1993 has been filed for a writ of mandamus directing the respondents to return the cash of Rs. 2,29,579, the jewellery and diamonds together with interest at 15% per annum. The petitioner claims that he was employed in the Andhra Express Service Pvt. Ltd., having its registered office at Bombay -400 002, that he was working as a courier for carrying parcels between Hyderabad and Madras on behalf of the company, that he had carried parcels from Hyderabad to Madras on 3rd Nov., 1986, and the police intercepted him and searched the packets, which were claimed to have been entrusted to the petitioner for carrying and, ultimately they were found to contain cash of Rs. 2,29,579 and some other valuables in other parcels. It is also stated that these parcels were handed over to the petitioner on behalf of his employers and they do not belong to the petitioner. The statement was said to have been recorded on 4th Nov., 1986, and the money and other articles were said to have been taken possession of by the respondent from the Station House Officer, Flower Bazaar, Police Station, Madras -1, under S. 132A of the IT Act. It is also stated that the respondent has passed an order on 25th Feb., 1987, under S. 132(5) of the Act determining the total tax payable at Rs. 3,620.70. It is also stated that the regular assessment of the petitioner was completed on 30th March, 1990, accepting the return of income made by the petitioner under S. 143(3) of the Act. In the light of the final orders passed, the petitioner claimed that he is entitled to the return of the money and the jewellery as well as the diamonds seized from him and, consequently, he moved this Court with this writ petition, since, according to the petitioner, the representation made before the CIT on 26th April, 1993, did not evoke any response.

(3.) THE respondents have filed a counter -affidavit as earlier noticed in Writ Petition No. 21200 of 1993. It is stated therein that the actual date of interception by the Police attached to the Flower Bazaar Police Station (C.I.) was on 30th Oct., 1986, and not on 3rd Nov., 1986, as claimed by the petitioner, that he was found to be in possession of cash of Rs. 2,25,579 and 100 gms. of jewellery and 10 cs. of diamonds for which possession, no convincing explanation was given to the police authorities, who registered a case, that he was remanded to judicial custody and confined to the Central Jail and it is only on receipt of information from the station house officer concerned, that a warrant of authorisation under S. 132A of the Act was obtained for securing the articles and cash in question and that a statement was also obtained from the petitioner on 4th Nov., 1986. It is stated that the statement ran counter to the explanation/statement which he had already deposed before the police authorities and that the materials on record would lead to the inescapable conclusion that the petitioner is giving conflicting statements to mislead the IT Department and also to deliberately refrain from identifying the ostensible owner of the assets found from him. It is also claimed that an enquiry was initiated under r. 112A of the IT Rules rw S. 132(5) of the Act to identify and locate the owner of the assets and in spite of three or four letters, there was no co - operation from the employer of the petitioner and likewise some of the addressees to whom certain jewellery and diamonds were said to have been consigned had deposed before the authorities that they had never indented for the transportation of the jewellery and diamonds and they had no interest in these assets. The order under S. 132(5) of the Act was said to have been passed in a summary manner within the statutory time provided therefor on 25th Feb., 1987, holding the petitioner to be in possession of unexplained cash, jewellery and diamonds, and that they were ordered to be retained. Reference is also made to the statement said to have been given by the petitioner even on 18th Feb., 1987, that he was never the owner of the assets and that he was only an employee of the courier company with no source at all to own such assets, though he has come before this Court for the jewellery in his favour. The period of regular assessment for 1987 - 88 was getting barred by time on 30th March, 1990, and on which date the petitioner has chosen to file a return of income admitting just his salary as income and on the same date hearing of the case was done when the petitioner's representative furnished a xerox copy of the ledger of the petitioner's employer at Bombay in an attempt to explain the availability of cash and that this move was said to be part of the scheme of manipulation for the purpose of such assessment. The information available about the suspicious nature regarding the possession of these articles has also been disclosed in the counter -affidavit. In the light of the fact that the assessment under s. 143(3) of the Act made on 30th March, 1990, warranted the reopening, invoking powers under s. 148 of the Act, it is claimed that the notice was served on the petitioner after obtaining approval from the appropriate authority. On such basis, it is claimed that it is not open to the petitioner to claim return of the assets seized pending finalisation of the reassessment proceedings.