P. Nagabhushanam V. Union of India and Income Tax Department

WP(C)/19073/2024

AI Insights

The case involves P. Nagabhushanam, a real-estate agent, who filed a writ petition against the Union of India and the Income Tax Department, challenging the retention of Rs. 45,00,000 seized from his employee. The money, initially seized by the Railway police and produced before the Chief Judicial Magistrate Court, Thiruvananthapuram, was claimed to be collected from various customers on behalf of the petitioner. The petitioner argued that the Income Tax Department improperly issued a warrant of authorization under Section 132A of the Income Tax Act, 1961, for the seizure. The court had previously set aside an order releasing the money to the petitioner, directing a reconsideration after hearing the Income Tax Department. The petitioner was directed to file an application under Section 132B for the release of the currency, which the court would decide after an opportunity of hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 817358 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 31-07-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax, Allahabad and Others V. Vindhya Metal Corporation and Others [1997 (5) SCC 321], J.R. Malhotra and Another V. Additional Sessions Judge, Jullundur and Others [1976 (1) SCC 430], Ravirajan R. V. State of Kerala [2023 KHC 619]
• Laws Referred To: Income Tax Act, 1961, Cr.P.C.
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: NAVANEETH NATH; SUSIE VARGHESE; JOSE JOSEPH
• Assessee Lawyers: S PRASHANTH; N L RAJ R B GOVIND; V P B GAYATHRI R
• Keywords: Income Tax Department; Real estate agent; Warrant of Authorisation; Money seizure; Custody of currency
• Section: 132A; 132B; 482; 451

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. WEDNESDAY, THE 31ST DAY OF JULY 2024 / 9TH SRAVANA, 1946 WP(C) NO. 19073 OF 2024 PETITIONER/S: P.NAGABHUSHANAM,AGED 59 YEARS NO 1149 ,1150, 13TH MAIN ROAD, JUDICIAL LAYOUT, GKVK POST, BANGLORE, PIN - 560065 BY ADVS. S.JAYANT PRASANTH N.L. ABHIREMYA RAJ R B GOVIND V.P. SHAHANAZ B. GAYATHRI R. RESPONDENT/S: 1 UNION OF INDIA,REPRESENTED BY ITS SECRETARY, DEPARTMENT OF REVENUE UNDER MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI, PIN - 110001 2 INCOME TAX DEPARTMENT, REPRESENTED BY THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), AAYAKAR BHAVAN, KAWDIAR, THIRUVANANTHAPURAM, PIN - 695003 BY ADVS. NAVANEETH.N.NATH, CGC SUSIE B VARGHESE JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA SRI.NAVANEETH N NATH (CGC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 19073 OF 2024 2 JUDGMENT The petitioner has approached this Court, being aggrieved by the fact that certain amount of money totalling to Rs.45,00,000/- (Rupees Forty five lakhs only) was seized from an employee of the petitioner has been requisitioned by the Income Tax Department under Section 132A of the Income Tax Act, 1961 and the said amount is being illegally retained by the Department. 2. It is the case of the petitioner that, he is a real-estate agent and the amount which was seized from the employee of the petitioner by the Railway police and produced before the Chief Judicial Magistrate Court, Thiruvananthapuram was, in fact, the amounts which had been collected from the various customers on behalf of the petitioner. It is the case of the petitioner that there was no occasion for the the Income Tax Department (the Commissioner of Income Tax) to issue any warrant of authorisation under Section 132A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). It is submitted that, when the petitioner had earlier approached the Chief Judicial Magistrate Court, Thiruvananthapuram by filing a petition under Section 451 Cr.P.C., the amount was directed to be released to WP(C) NO. 19073 OF 2024 3 the petitioner and thereafter, on a petition being filed by the Income Tax Department under Section 482 Cr.P.C before this Court, the said order was set aside and the claim of the petitioner was directed to be reconsidered by the Chief Judicial Magistrate Court, Thiruvananthapuram after hearing the Income Tax Department also. It is submitted that, thereafter, orders were passed by the Chief Judicial Magistrate Court, Thiruvananthapuram, permitting the Income Tax Department to take possession of the currency, which was deposited in court. It is submitted that the conditions precedent for issuing a warrant of authorisation under Section 132A of the Act are not attracted in this case. Learned counsel also places considerable reliance on the judgments of the Supreme Court in Commissioner of Income Tax, Allahabad and Others V. Vindhya Metal Corporation and Others [1997 (5) SCC 321 and J.R. Malhotra and Another V. Additional Sessions Judge, Jullundur and Others [1976 (1) SCC 430], in support of his contention. Learned counsel also places reliance on the judgment of the learned Single Judge of this Court in Ravirajan R. V. State of Kerala [2023 KHC 619], to substantiate his case. WP(C) NO. 19073 OF 2024 4 3. Learned Standing Counsel appearing for the Income Tax Department would submit that, at least, at the first instance, it is for the petitioner to file an application under Section 132B of the Act, for release of the currency, which is now in the custody of the authorities and it is only thereafter, he can approach this Court by filing a writ petition under Article 226 of the Constitution of India. It is submitted that, if such an application is filed, the matter can be considered by the competent authority, after affording an opportunity of hearing to the petitioner. 4. Learned counsel appearing for the petitioner would submit that the petitioner will make an application under Section 132B of the Act, before the competent authority and that application may be decided without further delay, considering the fact that the cash has been in the custody of the authorities for nearly four years. It is submitted that the contention taken in the writ petition may be left open to be raised again, if the decision of the competent authority is against the petitioner. 5. Having heard the learned counsel appearing for the petitioner and the learned Standing Counsel appearing for the Income Tax Department, this writ petition will stand disposed of, directing the Deputy Commissioner of Income Tax, Central Circle, WP(C) NO. 19073 OF 2024 5 Trivandum to consider and decide any application that may be filed by the petitioner under Section 132B of the Act, provided such application is filed before that officer within ten days from the date of receipt of a certified copy of this judgment. If the petitioner files an application as aforesaid, the same shall be considered and disposed of by the Deputy Commissioner of Income Tax, Central Circle, Trivandum, within one month from the date on which such an application is received by him, after affording an opportunity of hearing to the petitioner. All legal contentions taken by the petitioner (including the contention that the warrant of authorisation under Section 132A of the Act was improperly issued in the facts and circumstances of this case) are left open for consideration, if necessary, at a later stage. Sd/- GOPINATH P. JUDGE ajt WP(C) NO. 19073 OF 2024 6 APPENDIX OF WP(C) 19073/2024 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE ORDER 05-03-2021 IN CRL MP NO 422/2020 OF CHIEF JUDICIAL MAGISTRATE COURT, THIRUVANANTHAPURAM Exhibit P2 A TRUE COPY OF THE ORDER IN CRLMC NO 1551 OF 2021 DATED 26-06-2023 Exhibit P3 A TRUE COPY OF THE JUDGMENT IN CRL MC NO 2030 OF 2020 DATED 26-06-2023 Exhibit P4 A TRUE COPY COUNTER OBJECTIONS/PETITION FILED UNDER 132 A ON BEHALF OF THE 2ND RESPONDENT AS CRL MP NO 2052 OF 2023 Exhibit P5 A TRUE COPY OF THE COMMON ORDER OF CHIEF JUDICIAL MAGISTRATE COURT, THIRUVANANTHAPURAM IN CMP NO 422/2020 AND CMP NO 2052 OF 2023 DATED 03-08-2023 "