P MURUGESAN Vs. DIRECTOR OF INCOME TAX

JUDGEMENT

(1.) BY consent of both sides, the writ petition is taken up for final disposal.

(2.) PRAYER in the writ petition is to issue a writ of mandamus directing the respondents to release/return the amount of Rs.1,00,00,000/- (Rupees One Crore) seized from the petitioner on 25.11.2006 and Rs.4,00,000/- (Rupees Four Lakhs) seized on 28.11.2006.

(3.) THE respondents filed counter affidavit by stating that on 25.11.2006 information was received from the Area Intelligence Unit, New Delhi, that the petitioner who was travelling in IC 540, was in possession of huge cash and therefore he was intercepted at Chennai Airport. A sworn statement was recorded from him by the Intelligence Officer, Area Intelligence, Chennai, under section 131 of the Income Tax Act, 1961. THE petitioner stated that he was carrying an amount of Rs.1.05 crores in cash which was withdrawn from the corpus fund of Sri Ponnaiah Ramajeyathammal Educational and Charitable Trust and the said sum was received as donation from the public, which includes fees collected from the students of educational institutions. When the petitioner was questioned as to whether he carried the cash from Chennai to New Delhi on 23.11.2006 by Jet Airways, he stated that he carried the cash in two bags, one hand baggage and another checked in baggage. A report was obtained from Jet Airways and it was found therefrom that the petitioner carried only a hand baggage and no checked in baggage was carried by him. It is further stated that the cash found was mostly in the denomination of Rs.1000 and Rs.500 bundles, which carry the seal of banks at North India like New Delhi, Ajmeer, etc. THE statement given by the petitioner was not cogent and self contradictory. In the sworn statement recorded under section 131 at the time of interception, petitioner stated that the said cash was unaccounted. Based on the entire statements and contradictions including the admission, an authorisation for search and seizure was issued. Consequently, the residence of the petitioner/Chairman and Trust office premises were surveyed/searched and various books and accounts and documents were impounded. It was found that the Trust did not maintain regular books of accounts for the moneys received from the parents/alleged public. THEre was intermingling of funds between the Trust and the Trustees and diversion of funds from the Trust to individual accounts. On the basis of the above materials and findings substantial legal issue arose as to how the public charitable trust funds were kept unaccounted, diverted to the trustees for their personal use, which are to be determined during regular assessment.