On March 12, 2017 while conducting a vehicle inspection at a check post, excise officials found that the second respondent was carrying cash of Rs.50 lakhs without any proper supporting documents. The amount was seized and produced before the Magistrate. The Income-tax authorities issued summons to the second respondent under section 131 of the Act, calling upon him to explain the source of the amount. After conducting an enquiry the Income-tax authorities found that the second respondent failed to explain the source of the cash properly and decided to initiate proceedings against him. A notice of requisition was issued but the police authorities informed the Department that the cash was in the custody of the Magistrate. The second respondent and the Department filed applications before the court for release of the cash. The application submitted by the second respondent was allowed in part and the release of 70 per cent. of the amount was ordered in favour of the second respondent upon furnishing a bank guarantee or security of immovable property for the amount. On a petition challenging the common order, the court held that for getting the amount released in favour of the second respondent, from whose custody the amounts were seized the only stipulation was that he had to convince the authorities as to the source of income and to pay the amount of taxes assessed on the income in accordance with the provisions of the Act. On the other hand, if the amount was released to the second respondent, it was likely to cause difficulties in initiating proceedings under section 132A and the further proceedings thereon. Therefore, the balance of convenience was in favour of the Department which was not taken into consideration by the Magistrate. The question of balance of convenience arose because proceedings under section 451 of the Code related to the interim custody of the asset alone and were not intended for taking a decision on the question of the title or right of the parties over the articles. Therefore, the relevant consideration was who was the proper person with whom the amount could be entrusted. The second respondent had failed to explain the source of the income to the satisfaction of the Income-tax authorities. In such circumstances, the proper course which should have been adopted by the Magistrate was to order the release of the amount to the Department so as to enable the parties to undergo the procedure contemplated under section 132A, 132B or 153A of the Act as the case may be. Though the amount was seized from the second respondent, by virtue of the provisions of the Income-tax Act, he was bound to disclose the source thereof before the authorities and to pay the tax, as per the rates applicable. Apparently no such exercise was done in this case, proceedings under section 132A or 153A were necessitated. Even if the amount was released to the Department, it was possible for the second respondent to make a claim of the amount, by following the procedure prescribed in the Act. But if the amount were released to the second respondent, it may cause difficulties in implementing the provisions of the Income-tax Act. In such circumstances, the order passed by the Magistrate had to be set aside.