Dept. has power to take possession over assets which were never disclosed to tax authority: HC

Case Details: Jahar Singh Gurjar v. State of M.P. - [2022] 138 taxmann.com 483 (Madhya Pradesh)

Judiciary and Counsel Details

• • Anand Pathak, J.
  • Santosh Agrawal, Ld. Counsel, Neelesh Singh Tomar , Ld. Public Prosecutor & D.P.S. Bhadoriya, Ld. Counsel for the Appearing parties.

Facts of the Case

In the instant case, a dacoity was committed by some persons at the house of the assessee. The accused persons were arrested and a certain sum was recovered from their possession. The assessee filed an application under section 457 of Cr. P.C. seeking interim custody of said sum. However, said applicable was rejected.

Later, he filed a petition under section 482 of Cr P.C. before the High Court and submitted that since said sum belongs to him and dacoity had been committed from his residence, the amount should be handed over to him as interim custody till the pendency of the trial.

The income-tax department had opposed the prayer of the assessee and contended that the disclosure of any assets ought to be disclosed before the dept. but have not been disclosed, comes under the purview of section 132A(1)(c). Thus, the prayer of the assessee was to be dismissed.

High Court Held

The High Court held that as per the provisions of section 132A, the Income-tax Authority has the power to make requisition for taking over possession or control of such assets from any officer or authority under any other law for time being in force, which has not been disclosed for purposes of Income-tax Act.

It was evident that the amount in question was seized from the possession of accused persons allegedly belonging to the assessee but never disclosed to Income Tax Authority, therefore, the department has the remedy available under section 132A(1)(c).

Further, it appeared that if the amount was not handed over to the Income Tax Department and was released to the assessee then it could hamper the effective implementation of the relevant provision of the Income Tax Act.

Therefore, it was appropriate 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.

List of Cases Referred to

• • Union of India v. State of Kerala [2022] 136 taxmann.com 150 (Ker.) (para 9).