High Court of KeralaSingle Judge2024-03-11Writ petition dismissed in limine; notices unde...

Muhammed C K v. Assistant Commissioner of Income Tax, Central Circle-2, Kozhikode; Principal Commissioner of Income Tax, Central, Kochi

Case / Petition Number:WP(C) No. 9269 of 2024

Neutral Citation::null

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Gopinath P.
Judgment Date: 2024-03-11
Court Decision / Holding: Writ petition dismissed in limine; Exts. P1 to P4 notices under Section 148 issued; however, the facts fall under the first proviso to Section 148A, so the 148A procedure need not be complied with before issuing the notices.
Final Disposition: Writ petition dismissed in limine; notices under Section 148 sustained under the first proviso to Section 148A.

Parties to the Case

Appellants / Petitioners

Muhammed C K

Respondents

Assistant Commissioner of Income Tax, Central Circle-2, Aayakar Bhavan, North Block, Mananchira, Kozhikode, PIN – 673 001
Principal Commissioner of Income Tax Central, Central Revenue Building, Is Press Road, Kochi, PIN – 682 018

Legal Representation & Advocates

Counsels for Petitioners

• Bejoy Joseph P.J.
• M. Ramesh Chander (Sr.)
• P. Raghunathan
• Bonny Benny
• Govind G. Nair
• Balu Tom

Counsels for Respondents

• Navaneeth N. Nath-SC

Case Synopsis & Summary

Muhammed C K filed WP(C) No. 9269 of 2024 challenging four notices issued under Section 148 of the Income-tax Act, 1961 for the assessment years 2020-2021 to 2023-2024. The petitioner contends that Exts. P1 to P4 were issued without following the procedure mandated by Section 148A, which requires an inquiry and an opportunity to the assessee before a notice under Section 148 is issued. He further submits that the references to Section 132A in the notices were not applicable, and that invoking Section 132A to requisition assets is an improper way to bypass the 148A safeguards. The facts reveal that cash was recovered by police from two individuals and produced before the Judicial First Class Magistrate, Nilambur; the Income Tax Department filed an application under Section 451 Cr.P.C for release of the money. The department maintains that Section 132A had been invoked and that, following the Nilambur proceedings and a High Court judgment (R. Ravirajan and Others v. State of Kerala, 2023 (4) KLJ 423), a Court-produced item cannot be requisitioned under Section 132A. The Court ultimately held that while Exts. P1–P4 were issued without 148A compliance, the facts fall under the 1st proviso to Section 148A, which dispenses with the formal 148A procedure in such cases. Consequently, the writ petition was dismissed in limine, with the notices under Section 148 remaining valid under the proviso. The decision reflects a nuanced balance between statutory safeguards and exceptional circumstances where assets are in court custody.

Provisions of Law Cited

Section 148 of the Income-tax Act, 1961Section 148A of the Income-tax Act, 1961Section 132A of the Income-tax Act, 1961First proviso to Section 148A of the Income-tax Act, 1961Section 451 Cr.P.C. (Code of Criminal Procedure)

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioner contends that Exts. P1 to P4 notices under Section 148 of the Income-tax Act, 1961 were issued without complying with the mandatory inquiry and opportunity requirements under Section 148A. He submits that Section 148A requires an inquiry and opportunity prior to issuance of a notice, and that the 1st proviso to Section 148A dispenses with 148A procedure only when a search under Section 132 or a requisition under Section 132A is initiated after 01-04-2021. In the present case, cash recovered by police from two individuals was produced before the Judicial First Class Magistrate, Nilambur; IT Department filed an application under Section 451 Cr.P.C for release. The petitioner asserts that the sequence cannot be treated as a case covered by Section 132A, and therefore 148A procedure must be followed. He relies on Ravirajan to contend that Section 132A cannot be used to requisition assets in the custody of a Court, thereby invoking the need for 148A safeguards. Counsel urged that the department cannot bypass 148A by invoking 132A.

Contentions of Respondents

Respondent contends that the facts show that upon information about seizures, a requisition under Section 132A was issued; cash seized from the individuals was produced in court, and a Section 451 Cr.P.C application was filed. Relying on Ravirajan (2023 (4) KLJ 423), the department submits that once an item is produced before a criminal court, Section 132A cannot be used to requisition it, and the 1st proviso to Section 148A applies, thereby exempting the department from strict adherence to 148A procedures before issuing Exts. P1–P4. The court is urged to hold that though 148A procedures were not followed, the facts fit within the proviso, making the notices legally sustainable; consequently, the writ petition should be dismissed.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
R. Ravirajan and Others v. State of Kerala	2023 (4) KLJ 423	Positive	Cited to support the proposition that once an item is produced before a Court, it cannot be subjected to requisition under Section 132A, thereby justifying the application of the first proviso to Section 148A in this case.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE GOPINATH P.`** ``` MONDAY, THE 11[TH] DAY OF MARCH 2024 / 21ST PHALGUNA, 1945 ``` ## **`WP(C) NO. 9269 OF 2024`** ## **`PETITIONER:`** ``` MUHAMMED C K, AGED 39 YEARS CHETTUKKUZHIYIL, KARANTHUR, KUNNAMANGALAM AMSOM, KOZHIKKODE, REPRESENTED BY POWER OF ATTORNEY HOLDER, MUHAMMED FAIQUE, AGED 35 YEARS, S/O MUHAMMED BASHEER P. K, RESIDING AT PAZHANKARA HOUSE, KODUVALLY P.O, PUTHUR, KOZHIKKODE, PIN – 673 572. ``` ## **`BY ADVS.`** ``` BEJOY JOSEPH P.J. M.RAMESH CHANDER (SR.) P.RAGHUNATHAN BONNY BENNY GOVIND G. NAIR BALU TOM ``` ## **`RESPONDENTS:`** - **`1 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA, KOZHIKODE, PIN – 673 001.`** - **`2 PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL, CENTRAL REVENUE BUILDING, IS PRESS ROAD, KOCHI, PIN – 682 018.`** ## **`BY ADV. NAVANEETH N. NATH-SC`** ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C)No.9269 of 2024 2 ## **`‘` C.R.’** ## **J U D G M E N T** Petitioner has approached this Court challenging Exts.P1 to P4 notices issued under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as the ‘1961 Act’) for the assessment years 2020-2021 to 2023-2024. The specific ground raised before this Court is that a reading of Exts.P1 to P4 will indicate that the procedure contemplated by Section 148A of the 1961 Act has not been followed before issuing the impugned notices. It is the case of the petitioner that the reference to Section 132 A of the 1961 Act in the impugned notices is only to get over the formalities contemplated by Section 148A of the 1961 Act, and the facts and circumstances of the case indicate that Section 132A of the 1961 Act is not applicable. 2. Sri. P. Raghunathan, the learned counsel appearing for the petitioner, would vehemently contend that Section 148 A of the 1961 Act contemplates the conduct of an inquiry providing opportunity to the assessee before issue of notice under Section 148 A of the 1961 Act. It is submitted that by WP(C)No.9269 of 2024 3 virtue of the 1[st] proviso to Section 148 A of the 1961 Act, the procedure is dispensed with only in case a search is initiated under Section 132 of the 1961 Act or the books of account, other documents or any assets are requisitioned under Section 132 A of the 1961 Act in the case of an assessee on or after 01-04-2021. It is submitted that in the facts of the present case, certain amounts of cash were recovered from one Muhammed Salih and one Sabeer Ali. It is submitted that the said cash was seized by the Police, and the same was produced before the Judicial First Class Magistrate Court, Nilambur, in Crime No.100 of 2022, registered by the Police. It is submitted that thereafter, the Income-tax Department filed an application under Section 451 Cr.P.C before the Judicial First Class Magistrate Court to release the money to the department. It is submitted that this Court, by Ext.P6 order, has found that the money in question ought to be released to the petitioners and others who had approached this Court. It is submitted that, therefore, it cannot be said that this is a case covered by the provisions of Section 132A of the 1961 Act, as the money in question was never requisitioned as contemplated by the provisions of Section 132A of the 1961 Act. It is submitted that WP(C)No.9269 of 2024 4 in such circumstances, any notice under Section 148 of the 1961 Act, without following the procedure contemplated by Section 148 A of the 1961 Act, would have to be declared illegal and unsustainable in law. 3. Sri. Navaneeth N. Nath, the learned Standing Counsel appearing for the Income Tax Department, would submit that the contention taken on behalf of the petitioner is contrary to the facts. It is submitted that on getting information that certain amounts had been seized by the Police from the aforesaid Muhammed Salih and Sabeer Ali, a requisition under Section 132A of the 1961 Act had been issued by the Income Tax Department to the Station House Officer, Nilambur Police Station. It is submitted that on being informed that the amounts seized from the aforesaid persons had been produced before the Judicial First Class Magistrate Court, Nilambur, the Income Tax Department filed an application under Section 451 Cr.P.C, as going by the judgment of this Court in **R. Ravirajan and Others v. State of Kerala;** 2023 (4) KLJ 423, the provisions of Section 132A of the 1961 Act cannot be applied to requisition something in the custody of a Court. It is submitted that the filing of an application under WP(C)No.9269 of 2024 5 Section 451 Cr.P.C. cannot, therefore, be said to be fatal to the issuance of notices under Section 148 of the 1961 Act without following the procedure under Section 148A of the 1961 Act, as the provisions of Section 132A of the 1961 Act were actually invoked in the facts and circumstances of this case. Having heard the learned counsel for the petitioner and the learned Standing Counsel appearing for the Income Tax Department, I am of the view that the petitioner has not made out any case for interference with Exts.P1 to P4 notices issued under Section 148 of the 1961 Act. Exts.P1 to P4 notices have indeed been issued without following the procedure contemplated by Section 148A of the 1961 Act. However, in the facts and circumstances of this case, that does not result in a situation where this Court has to hold that Exts.P1 to P4 notices are illegal, as it is clear from the facts of this case that the situation is covered by the 1[st] proviso to Section 148 A of the 1961 Act, which contemplates that the procedure under Section 148 A of the 1961 Act is not applicable in a case covered by the provisions of Section 132A of 1961 Act. The contention of the learned counsel for the petitioner that since the Income Tax Department had filed an application under WP(C)No.9269 of 2024 6 Section 451 Cr.P.C, this cannot be treated as a case covered by Section 132A of the 1961 Act cannot be accepted. According to the learned Standing Counsel for the Income Tax Department, the department had requisitioned the amount from the Station House Officer, Nilambur Police Station, and it was only after being informed that the amount had been produced in Court that an application under Section 451 Cr.P.C was filed. It is clear from the judgment of this Court in **R. Ravirajan and Others (Supra)** that when an item or cash, as in this case, is produced before a Criminal Court, then it is not open to the Income Tax Department to issue a notice under Section 132A of the 1961 Act to the Court in question. Once the item is produced before the Court in connection with any criminal case registered by the Police or any other law enforcement agency, an application for release of the same or for giving custody of the same to the Income Tax Department can only be in accordance with the provisions of the Code of Criminal Procedure and specifically Section 451 Cr.P.C. thereof. That does not take away the fact that the department had initiated proceedings under Section 132 A of the 1961 Act to requisition the amount from the Station House Officer, Nilambur Police WP(C)No.9269 of 2024 7 Station. Therefore, I have no option but to hold that this is a case covered by the 1[st] proviso to Section 148A of the 1961 Act. Therefore, the procedure contemplated by the provisions of Section 148 A of the 1961 Act need not be complied with before issuing Exts.P1 to P4 notices under Section 148 of the 1961 Act. No other point has been raised. The writ petition fails, and it stands dismissed in limine. **Sd/GOPINATH P. JUDGE** ats WP(C)No.9269 of 2024 8 ## **`APPENDIX OF WP(C) 9269/2024`** ## **`PETITIONER’S EXHIBITS`** ``` Exhibit P1PHOTOSTAT COPY OF THE NOTICE NO. ITBA/AST/S/148_1/2023-24/1061280383(1) DATED 21.02.2024 ``` ``` Exhibit P2PHOTOSTAT COPY OF THE NOTICE NO. ITBA/AST/S/148_1/2023-24/1061280385(1) DATED. 21.02.2024 ``` ``` Exhibit P3PHOTOSTAT COPY OF THE NOTICE NO. ITBA/AST/S/148_1/2023-24/1061280386(1) DATED 21.02.2024 ``` ``` Exhibit P4PHOTOSTAT COPY OF THE NOTICE NO. ITBA/AST/S/148_1/2023-24/1061280388(1) DATED 21.02.2024 ``` ``` Exhibit P5PHOTOSTAT COPY OF ORDER OF THE JUDICIAL MAGISTRATE OF FIRST CLASS NILAMBUR DATED 03.08.2022 Exhibit P6PHOTOSTAT OF THE ORDER OF HON'BLE HIGH COURT IN CRL.M.C. NO. 5605/2022 DATED 21.12.2023 Exhibit P7PHOTOSTAT COPY OF THE MEMORANDUM DATED 12.01.2024 ISSUED BY THE JUDICIAL FIRST CLASS MAGISTRATE NILAMBUR Exhibit P8PHOTOSTAT COPY OF THE MEMORANDUM DATED 30.01.2024 ISSUED BY THE JUDICIAL FIRST CLASS MAGISTRATE NILAMBUR ```