Assistant Director Of Income Tax,(Investigation),Unit-I (4),Chennai - 600 034 v. Sri.a.khader Mohideen2.The Sub-Inspector Of Police, Central Crime Branch, Egmore, Chennai - 600 008

IN THE HIGH COURT OF JUDICATURE AT MADRAS Assistant Director of Income Tax,(Investigation),Unit-I (4),Chennai - 600 034. ...Petitioner Vs. 1.Sri.A.Khader Mohideen2.The Sub-Inspector of Police, Central Crime Branch, Egmore, Chennai - 600 008.... Respondents PRAYER : Criminal Revision is filed under Sections 397 and 401 ofCr.P.C., to call for the records relating to the order passed inCrl.M.P.No.167 of 2004 in X Cr.No.899 of 2003, dated 22.03.2004 onthe file of Additional Chief Metropolitan Magistrate, Egmore,Chennai, dated 22.03.2004 and set-aside the impugned order passedby the Additional Chief Metropolitan Magistrate, Egmore, Chennaiin Crl.M.P.No.167 of 2004 in X Cr.No.899 of 2003, dated 22.03.2004and order the return of Rs.5,30,000/- given to respondent-1 tothe petitioner. On 17.10.2003, when the accused was travelling on hismotorcycle with a sum of Rs.8,07,050/- in cash, the Sub Inspectorof Police, City Crime Branch intercepted him near Gandhi IrvinBridge, Egmore and registered a case against him for offencesunder Sections 41(2) read with 102 Cr.P.C, on suspicion that themoney was stolen property or it had been obtained through somehttps://hcservices.ecourts.gov.in/hcservices/ other offence. The Sub Inspector of Police seized the said cashand produced the same before the Court and on his requisition, thesaid amount has been deposited in the Corporation Bank.Subsequently, the Sub Inspector of Police, who took up theinvestigation has filed a final report dated 19.01.2004 statingthat the case was referred as "further action dropped" and thefinal report was accepted by the Court. 2. At this juncture, the petitioner/accused has filedCrl.M.P.No.167 of 2004, stating that the said amount was kept byhim for business purpose and during investigation police detectednothing against him. During the course of inquiry, the learnedMagistrate suo-moto ordered issuance of notice to the Income TaxDepartment to ascertain their views about the cash seized from thepetitioner. The Income Tax Department has filed a counter andopposed the claim of the petitioner in Crl.M.P.No.167 of 2004 andalso another petition in Crl.M.P.No.854 of 2004 for the return ofthe cash. 3. On considering the averments of both parties and onhearing the arguments of the learned counsels on either side, thelearned Magistrate on considering that the counsel for thepetitioner had agreed for retention of 30% of the seized amount tobe paid to Income Tax, ordered that 30% of the seized amount is tobe paid to the Income Tax Department subject to the outcome of thefinal assessment. The seized amount of Rs.8,07,050/- has beendeposited in Corporation Bank, Egmore, by the learned MagistrateCourt on 31.10.2003. 4. Therefore, the learned Magistrate partly allowed theclaim in Crl.M.P.No.167 of 2004 and a sum of Rs.5,30,000/- wasordered to be returned to the petitioner on his executing a bondof Rs.6,00,000/- with one security for like sum on condition thathe shall return the amount to the Court as and when required. Thelearned Magistrate further directed the petitioner to file anaffidavit/undertaking that he shall redeposit the amount on thedirection of the Court. 5. Likewise, the learned Magistrate partly allowed theclaim in Crl.M.P.No.854 of 2004 filed by the Income Tax Departmentand ordered that a sum of Rs.2,92,373/- was to be returned to theIncome Tax Department, which was the balance after deduction ofRs.5,30,000/- from the total amount. 6. Aggrieved by the said order, the Income TaxDepartment, has filed the above revision. 7. The highly competent senior Special Public Prosecutorargued that ordering to return only part of the seized amount iscontrary to law and facts of the case. As per Section 132A of thehttps://hcservices.ecourts.gov.in/hcservices/ 5. Likewise, the learned Magistrate partly allowed theclaim in Crl.M.P.No.854 of 2004 filed by the Income Tax Departmentand ordered that a sum of Rs.2,92,373/- was to be returned to theIncome Tax Department, which was the balance after deduction ofRs.5,30,000/- from the total amount. 6. Aggrieved by the said order, the Income TaxDepartment, has filed the above revision. 7. The highly competent senior Special Public Prosecutorargued that ordering to return only part of the seized amount iscontrary to law and facts of the case. As per Section 132A of thehttps://hcservices.ecourts.gov.in/hcservices/ Income Tax Act, 1961, the Income Tax Department is empowered toenquire into the unexplained cash seized from the first respondentand had assessed the same in accordance with the relevantprovisions of the Income Tax Act, 1961. Further, the return ofcash of Rs.5,30,000/- to the accused is illegal. Actually, theunexplained cash seized from the accused ought to have beenreturned to the Income Tax Department. The highly competentcounsel has pointed out a question of law that the secondrespondent, viz., the Sub Inspector of Police, attached to theCentral Crime Branch had conducted an investigation on the saidoffence and finally filed a report stating that the case wasreferred as "further action dropped". Subsequently, the learnedMagistrate has no jurisdiction to pass any order on the said case,especially the return of cash to the accused. Actually, the IncomeTax Authorities are vested with the powers of investigationregarding unexplained cash seized from the accused, as such, theIncome Tax Department is entitled to receive the entire seizedamount. The learned Magistrate has failed to understand thepurpose for which Section 132 A of the Income Tax Act, 1961, isintroduced in the Statute book which relates to the pre-assessmentstage, but the reason given by the learned Magistrate that theDepartment is not entitled to seize the amount, seized by thePolice as the Tax is yet to be determined, is contrary to Section132A of the Income Tax Act. The accused stated that the allegedloan given by the sister-in-law of the assessee did not reflect inthe return filed by the assessee and the brother of the assesseehas no sufficient means to advance loan to the accused. Further,the accused, his brother and his wife have not maintained anybooks of accounts. 8. The very competent counsel appearing for the revisionpetitioner further contended that the learned Magistrate erred insplitting the seized amount and returning a part of the amount tothe Department and a part of the amount to the first respondentherein. Actually, the police officer has to hand over the seizedamount to the Income Tax Department. Hence, the highly competentsenior Special Public Prosecutor, Mr.K.Ramasamy entreats the Courtto set-aside the trial Court's order. 9. The very competent counsel for the first respondentvehemently argued that the seized amount has to be restored to thefirst respondent herein, who is an income tax assessee. Thecomplainant i.e., Sub Inspector of Police had seized the amountand registered the case under Crime No.899 of 2003. subsequently,the investigation had been duly conducted by the complainant andthe said case was "referred as to further action dropped" as such,the criminal case has not been proved in the initial stage.Therefore, the learned Magistrate ought to have rejected the casein X Crime No.899 of 2003, in limine, considering the presentcircumstances. Therefore, nothing is surviving on the file of thelearned Magistrate. Therefore, the first respondent is entitled tohttps://hcservices.ecourts.gov.in/hcservices/ receive the entire seized amount without any condition. The actionof the Sub Inspector of Police had disturbed the firstrespondent's reputation, business and place including his time. Ifthe Income Tax Department issued any show cause notice regardingthe unexplained cash, he is prepared to provide suitableexplanation. However, the respondent is put into hardship since afalse case has been foisted against the respondent, subsequently,the Income Tax Department also came into the picture on the suo-moto order of the Magistrate. 10. The learned counsel for the State vehemently arguedthat the Sub Inspector of Police attached to the Crime Branchcontended that the accused had been intercepted on suspicion and asum of Rs.8,07,050/- was found as unexplained money in thepossession of the accused, therefore, a criminal case has beenlevelled against him. Subsequently, the case is referred to thelearned Magistrate, who is the competent authority to decide theissue of ownership of seized money. The highly competent counselfurther contended that it is open to the accused to provide asuitable explanation to the Income Tax Authorities and get returnof his money. The Income Tax Authorities also have to conduct anenquiry and then only could the matter be decided. Now, a part ofseized amount has been handed over to the accused, as interimcustody, with a stringent condition that he has to return themoney to the Court as and when required. Therefore, the entireamount rests permanently under the custody of the Court andhence, the revision is not maintainable against the interim order.Further, no one will be prejudiced on the strength of the interimorder passed by the learned Magistrate. The complainant hasregistered a criminal case against the accused since he had notgiven suitable reply at the time of interrogation, and as such, heis not an innocent person. Even though, the criminal case has beenclosed, the relevant issues have so far not been decided, hence,the case is existing on the file of the learned Magistrate,therefore, the very competent counsel prays to dismiss the aboverevision. 11. On considering the facts and circumstances of thecase and arguments advanced by the learned counsels on all sidesand on perusing the impugned common order of the learnedMagistrate, this Court does not find any lapse in the conclusionsarrived at regarding the return of money in part to the accusedon a stringent condition. This Court's further view is that theseized amount should not be kept idle as "dead investment". Theamount seized from the first respondent herein could be utilizeduntil the veracity of the case has been determined. Hence, theinterim order is maintainable. Therefore, the part amount had beenreleased to the accused on condition that he executes a bond for asum of Rs.6,00,000/- with one surety for likesum on condition thathe shall return the amount to the Court as and when required.https://hcservices.ecourts.gov.in/hcservices/ Therefore, the learned Magistrate's order will not be prejudicialto the interest of the Income Tax Department. 12. In the result, the above revision is dismissed.Consequently, the order passed in Crl.M.P.No.167 of 2004, on thefile of Additional Chief Metropolitan Magistrate, Egmore,Chennai, dated 22.03.2004 is confirmed. Sd/-Asst.Registrar /True Copy/ Sub Asst.Registrar r n sTo 1. The Additional Chief Metropolitan Magistrate, Egmore, Chennai.2. The Sub-Inspector of Police, Central Crime Branch, Egmore, Chennai - 600 008. 3.The Assistant Director of Income Tax,(Investigation),Unit-I (4),Chennai - 600 034. 4.The Public Prosecutor,High Court,Madrass. 5.The Section Officer,Criminal Section, High Court,Madras. +2ccs to Mr.K.Ravi, Advocate Sr 38978 KJI(CO)km/19.8. Crl.R.C.No.1584 of 2004