The Madhya Pradesh High Court, Gwalior Bench has recently allowed the income tax department to take custody of recovered stolen cash to the tune of Rs. 45 Lakhs from the police as the same was not disclosed by the assessee prior to the incident.
The Court was essentially dealing with an application under Section 482 CrPC filed by the Applicant, challenging the order passed by the lower court, whereby his application under Section 457 CrPC was rejected.
The applicant contended that he was a victim of dacoity to the tune of Rs. 1,24,00,000. The accused persons were later arrested and the police recovered Rs.53,16,000 cash, along with some silver ornaments. The Applicant/complainant moved an application under Section 457 CrPC, seeking interim custody of his share in the looted property i.e., Rs. 45,16,000, but the same was rejected by the lower court on an objection filed by the IT Department.
The IT Department submitted before the Court that the disclosure of any assets which ought to be disclosed but have not been disclosed, comes under the purview of Section 132A(1)(c) of the Income Tax Act, 1961, and therefore they rightly intervened in the matter. It was argued that the cash amount recovered was never disclosed by the Applicant and other Complainants before them.
Considering the submissions of the IT Department, Justice Anand Pathak noted that the Applicant did not produced any material to account for the property that was recovered from the accused personsFrom the allegations of the Income Tax Department and in the fact situation, no document has been produced by the petitioner to demonstrate that Income Tax Return discloses his income of such magnitude at any point of time to the Income Tax Authority.
“Before this Court, one letter dated 15.07.2021 written by one Chartered Accountant on behalf of petitioner and addressed to the Income Tax Authority as well as to the court below in which details have been mentioned and apparently intimation has been given but scope of Section 132 A (1) (c) of the Act 1961 appears to be wide enough to include the present controversy.”
“Understandably so, when it is evident that amount in question was seized from the possession of accused persons allegedly belonging to petitioner but never disclosed by petitioner to Income Tax Authority, therefore, department has the remedy available under Section 132 A (1) (c). This procedure is followed by Section 132 B which elaborates the manner of dealing after requisitioned under Section 132 A of the Act 1961. The power under Section 132 A appears to be distinct vis-a-vis Section 132 (Search and seizure),: the Court said.
“The Court further held that in the present case, for effective implementation of the provisions of the Act of 1961, it would be apposite to hand over the amount to the IT Department. Here also, it appears that if the amount is not handed over to the Income Tax Department and is released to the petitioner, then it may hamper effective implementation of relevant provision of Income Tax Act and therefore, in the fact situation it is apposite that amount be deposited with the Income Tax authority and proceedings before the competent authority of the Income Tax Department be concluded within the time stipulated as per the relevant provisions of the Income Tax Act. Time is running fast against the department for assessment. Therefore, it is expected that the Income Tax Department shall complete the assessment proceedings within the time stipulated,” the Court said.
With the aforesaid observations, the Court dismissed the Application and further directed the lower court to immediately release the amount in favour of the IT Department.
Jahar Singh Gurjar VS The State of M.P. & Another
CITATION: 2022 TAXSCAN (HC) 113
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