MP High Court Grants Custody Of Looted Property Recovered By Police To Income Tax Department As The Same Was Not Disclosed By Complainant

The Madhya Pradesh High Court, Gwalior Bench recently dismissed an application moved by a Complainant in a dacoity case, seeking custody of the recovered stolen cash to the tune of Rs. 45 Lakhs. The Court held that since the said amount was not disclosed before the Income Tax Department (IT Department) prior to the incident, the same was liable to be handed over to the IT Department for assessment. Justice Anand Pathak 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 case of the Applicant was 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 ("Act of 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. The IT Department asserted that the Applicant was trying to avoid the tax liability under the garb of agriculture income and therefore, it prayed for dismissal of the application. Considering the submissions of the IT Department, the Court noted that the Applicant did not produced any material to account for the property that was recovered from the accused persons- From 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. The Court then referred to the decision of the Kerala High Court in Union of India, Income Tax Department, represented by the Deputy Director of Income Tax, (Investigation), Income Tax Office, Kozhikode v. State of Kerala, wherein the High Court, while dealing with a similar set of facts had considered the impact of Section 132A as well as Section 132B and concluded that handing over the amount to Income Tax Department would be the proper course of action. Perusing the provisions under Section 132A of the Act of 1961 in the context of the factual matrix of the case, the Court observed- Perusal of Section 132 A reveals that Income Tax Authority under the Act 1961 has power to make requisition for taking over possession or control of such assets (cash amount in present case) from any officer or authority under any other law for the time being in force, if the said income or property has not been disclosed for the purposes of the Income Tax Act. 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 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. With the aforesaid observations, the Court dismissed the Application and further directed the...

MP High Court Grants Custody Of Looted Property Recovered By Police To Income Tax Department As The Same Was Not Disclosed By Complainant

Zeeshan Thomas

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Zeeshan Thomas

MP High Court Grants Custody Of Looted Property Recovered By Police To Income Tax Department As The Same Was Not Disclosed By Complainant

Zeeshan Thomas

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Zeeshan Thomas

This is a premium content
Available exclusively to
Our subscribers