A.P. Misra, J. - (1.) HEARD learned counsel for the parties. In view of the exchange of affidavits both the writ petitions are being disposed of by means of a common order in accordance with the rules of the court. Writ Petition No. 993 is by the persons who are said to be travelling along with the petitioners, Mahesh Kumar and others of Writ Petition No. 994 of 1992, against whom the warrant of authorisation was issued.
(2.) THE petitioners in Writ Petition No. 993 of 1992 have sought for quashing the entire search and seizure operation carried on by the officers of the Income-tax Department, and further directing the respondents to release all the cash seized from the vehicle on September 2, 1992, as mentioned in the panchnama (annexure II to the petition) and also not to proceed further against the petitioners under Section 132 of the Income-tax Act, 1961. In Writ Petition No. 994 of 1992, the petitioners have sought for quashing the entire search and seizure dated September 2, 1992, as the same was done without fulfilling the condition precedent for the exercise of power under Section 132A of the Income-tax Act, 1961, and further directing the authorities to release the cash seized on September 2, 1992, and further not proceeding against the petitioners under Section 132(5) of the Act. The petitioners have sought for quashing the search and seizure made by the respondent-income-tax authorities on September 2, 1992. According to the petitioners, there was no warrant of authorisation with the search party for conducting search and seizure of the money at least to the extent of Rs. 2,47,750, which belongs to petitioners Nos. 1 and 2. The case of the petitioners is that out of the total seizure of money which was initially done according to the petitioners by the police authorities a day earlier, a part of the money belongs to petitioners Nos. 1 and 2 and, therefore, the petitioners seek refund of the said money by the income-tax authorities as the said money does not belong to the person in whose favour the warrant of authorisation was issued by the respondent authorities. The case set up by the petitioners is that petitioners Nos. 1 and 2 decided jointly to purchase a truck from Gwalior. For this purpose, the said two persons along with Sri Mahesh Kumar collected jointly Rs. 4,17,750 and went to Gwalior to purchase the same and since the said purchase could not materialise, all of them were returning to Orai/Jalaun on September 1, 1992, when the aforesaid money was jointly kept in one brief case and a gunny bag, which again, according to the petitioners, was in the custody of petitioners Nos. 1 and 2 and Mahesh Kumar. The petitioners have further specified the amount which belongs to each of the petitioners and Mahesh Kumar out of the seized amount. It is not necessary for us to go into other details of the facts stated in the petition for the purpose of disposal of this writ petition. The petitioners have raised two grounds of attack in the said seizure. Firstly, there was no authorisation for the said seizure as against petitioners Nos. 1 and 2 for which reliance has been placed in the cases of Jagmohan Mahajan v. CIt [1976] 103 ItR 579 (P and H) and Manmohan Krishan Mahajan v. CIt [1977] 107 ItR 420 (P and H), and, secondly, since the seizure was made by the police personnel and, therefore, the seizure by the income-tax authorities under Section 132 of the Income-tax Act, 1961, would be illegal in view of the decision in ItO v. Bafna Textiles [1987] 164 ItR 281 (SC) and CIt v. Tarsem Kumar [1986] 161 ItR 505 (SC). So far as the second point and the later two decisions are concerned, they are transactions prior to the bringing in of Section 132A of the Income-tax Act by means of an amendment. Therefore, the said decisions would be inapplicable. The question of seizure, whether it was a seizure by the police authorities or by the income-tax authorities and who was in possession of the same, are all questions in the realm of facts, which cannot appropriately; be gone into in the present proceedings under Article 226 of the Constitution of India. Therefore, we decline to go into the disputed question of fact raised in this petition regarding the question as to from whose possession the said money was seized and who was the owner thereof. In this case, we do find, which is not in dispute even by the petitioners, that there is a warrant of authorisation in the names of Mahesh Kumar and petitioner No. 3 and not in the names of petitioners Nos. 1 and 2. Once there was a valid authorisation, the question whether, in the absence of any authorisation for making the search and seizure from petitioners Nos. 1 and 2 specially in a case admitted by the petitioners that the money was jointly in possession of all, would again be a question in the realm of evidence, which cannot appropriately be gone into in proceedings under Article 226 of the Constitution. Therefore, we leave the matter open and the matter is to be tested in proceedings under Section 132(5) of the Act.
(3.) THE further contention on behalf of the petitioners is that the search and seizure made by the respondent-authorities is illegal as there was no material existing on the records before issuance of the warrant of authorisation in the present case. This fact has been vehemently urged on behalf of learned counsel for the petitioners. Reliance has been placed on Manju Tandon v. T.N. Kapoor, Dy. Superintendent of Police [1978] 115 ITR 473 (All), in which it was held (headnote) ; "Accordingly, what has to be seen in the present case is as to whether the action of the Commissioner in authorising an officer of the Income-tax Department to requisition the ornaments from the possession of the officer of the CBI and the subsequent proceedings following thereon were without jurisdiction or whether the officers of the Income-tax Department had committed some error of law or fact in the exercise of their jurisdiction under the Income-tax Act. . . . Under Section 132A, the jurisdiction of the Commissioner to authorise an officer to requisition assets which have been taken into custody by an officer or authority under any other law and thereafter proceed to deal with the assets in the manner provided in Sections 132 and 132B arises only where the Commissioner has, in consequence of information in his possession, reason to believe that such assets represent either wholly or partly income or property which has not been or would not be disclosed for the purpose of the Income-tax Act by any person from whose possession or control such assets had been taken into custody by the officer or authority from whom it was requisitioned. It is always open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purposes of the section." Next, reliance was placed on Ganga Prasad Maheshwari v. CIT [1983] 139 ITR 1045 (All) in which it was held (headnote) : "'Reason to believe' has been considered to be the most salutary safeguard on the exercise of power by the officer concerned. It is made up of two words 'reason' and 'to believe'. The word 'reason' means cause or justification and the word 'believe' means to accept as true or have faith in it. Before the officer has faith or accepts a fact to exist there must be a justification for it. The belief may not be open to scrutiny as it is the final conclusion arrived at by the officer concerned as a result of mental exercise made by him on the information received. But the reason due to which the decision is reached can always be examined. When it is said that the reason to believe is not open to scrutiny, what is meant is that the satisfaction arrived at by the officer concerned is immune from challenge. . . . The mere fact that an authorisation has been issued in Form No. 45 does not amount to having a reason to believe that the person against whom it was being issued was in possession of jewellery or bullion which represented his undisclosed income. If the mere issue of an authorisation warrant in Form No. 45 is sufficient, then the entire purpose of Sections 132 and 132A and the provision for the formation of an opinion in consequence of the information would become redundant. Form No. 45 is a follow-up action as a result of the formation of an opinion in the circumstances enumerated. It is the formation of the opinion and not the issuing of Form No. 45, which is fundamental." ;