UOI v. State of Kerala (2022) 285 Taxman 677 / 443 ITR 117 (Ker.)(HC)

S. 153A : Assessment-Search or requisition-Excise Officials while conducting vehicle inspection at check post, found that assessee was carrying cash of Rs. 50 lakhs without any proper supporting documents-F.I.R. was registered and amount was also seized and deposited with Court of Judicial Magistrate First Class-Inspector of Police, Income-tax authorities had issued summons to assessee under section 131, seeking to explain source of said amount-Proceedings were inisiated by the revenue Authorities-Petition was filed to hand over the cash seized to the tax officials-Petition was allowed [S. 132A, 132B, Criminal Procedure Code, 1973 S. 451]

Excise Officials while conducting vehicle inspection at check post, found that assessee was carrying cash of Rs. 50 lakhs without any proper supporting documents. F.I.R. was registered and amount was also seized and deposited with Court of Judicial Magistrate First Class.Upon getting information from Inspector of Police, Income-tax authorities had issued summons to assessee under section 131, seeking to explain source of said amount. However, assessee failed to explain source of same properly, hence proceedings were initiated against him.  Pursuant to a criminal miscellaneous petition before Magistrate, seized amount had been released in favour of assessee. The revenue also filed criminal miscellaneous petition befor Magistrate Court under section 451 of the Cr.PC, which was dismissed. The revenue filed petition before High court. Court held that   as per the provisions of Income-tax Act, assessee was bound to disclose source of seized amount before authorities and to pay tax, as per rates applicable, however, since no such exercise was done in this case, at instance of assessee, proceedings under section 132A or 153A were necessitated. Court held that  where assessee was having in his possession, huge amount of cash, in violation of provisions of Income-tax Act and also failed to explain source of said cash, proper course to be adopted by Magistrate in whose custody said seized amount was deposited would have been to release said amount to revenue authorities so as to enable parties to undergo procedure contemplated under section 132A, 132B or 153A.Accordingly the  petition was  allowed and amounts shall be released to revenue for completing proceedings under section 132B or 153A of the Act.

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