DIRECTOR OF INSPECTION OF INCOME TAX (INVESTIGATION) NEW DELHI AND ANOTHER versus POORAN MAL & SONS & ANOTHER

Citation: [1975] 2 S.C.R. 104 · Decided: 20-09-1974 · Supreme Court of India · Bench: P. JAGANMOHAN REDDY · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

104 
DIRECTOR OF INSPECTION OF INCOME TAX 
(INVESTIGATION) NEW DELHI AND ANOTHER 
v. 
POORAN MAL & SONS & ANOTHER 
September 20, 1974 
[P. JAGANMOHAN REDDY AND A, ALAGIRISWAMI, JJ.J 
I11<·ume-Tax AU, 1961, Si•ction 132(5):._Altachment of Ji/ver bars in 1he 
banks-Writ proceedings ending in a consent order--Frtsh enquiry by the 
Income-Tax 0/fi<'er-Respondents c/w//enging (he order as or.e passed beyond 
the period of ninety days-Respondents deriving benefit under sec, 132(5), 
if 
could waive the bencfii.r. 
lllcome-Tax Acr, 1961, Sub-sectiom (5), (II) and (12) of Sc£'1ion 132-· 
Income-Tax Officer tleciding to whom property seized' belongs-Initial order 
and ,,µbsequent order in comequem:e of direcrion.I' from High Co11rt-lf should 
he within 11i11ety days. 
lllcome-Tax Act, 1961, Section 132(3 )-Order a11avlti11g the sifrer bars in 
ti,. banks-Income Tax Officer deciding to whdm they belong--01der, if can 
be que•li011ed under sec. 132(5)-When ca11 Hixh Court order return of thr 
.~ilrf'r frar.t. 
On an authorisation issued by the Director of Inspection, Pooran Mal's 
residence and business premises in Delhi were searched in October 1971. His 
premises in Bombay were also searched. On a search made in the Branch 
offices of Lumi Commercial Bank and the Punjab National Bank 84 silver 
bars in the former bank were attached under sec. 132(3) of the Income-Tax Act, 
1961, and similarly 30 silver bars in the other bank were attached. 
In 
Poor<m Mal v. Director of Inspection [1974) I S.C.C. 345, the Supreme .Court 
upheld the constitutional validity of sec. 132 and the search and seizure were 
also held to be legal. Thereafter, respondent 1, the f1rm, of which Pooran 
Mal was a partner and respondent 2, another part11er of the same firm filed 
writ :Petition No. 829 of 1972 challenging the order of the Income-Tax bffioer 
dated 12-1-1972. This Writ Petition was disposed of on 6.4-1972 on the 
basis of the consent of the parties. The order recited that the parties are 
agreed that the impugned order be quashed artd that the Department be per· 
mitted to look into the matter afresh after giving an opportunity to the 
petitioner to place bis case before the Department in respect of the contention 
that the property belongs to the firm and not to Pooran. Mal individually. 
After enquiry, the Income-Tax Officer passed an order on S-6-1972 holding 
that the silver bars belonged to Pooran Mal, the individual and not the !st 
respondent firm. 
Respondents 1 and 2 thereafter filed Civil Writ Petition No. 
595 of 1972 contending that the silver bars belonged to the !st respondent 
firm and that the order of the Income-Tax Officer holding that they represented 
the undisclosed income of. Pooran Mal individual was illegal. It was also 
contended that the Income-Tax 'Officer had no jurisdiction to pass the impugned 
order· beyond. the period prescribed in sec. 132(5). The second contention 
found favour with the learned Judges of the 'High Court. 
In this appeal it was contended by the appellants : 
(i) Section 132(5) is 
for tbe benefit of the person concerned and it is competent for him to waive 
this benefit. The respondents waive<1 the benefit by the consent order and by 
appearing before the Income-Tax Officer and leading evidence; and (ii) The 
period· of ·time applies only to the initial order and not to any subsequent 
?rder ll:iat may be dire.ctcd und,er sec. 13202) or by a Court in writ prOClCed-
mgs. 
HELD : 
(I ) The period of limitation is one intended for the benefit of 
the person whose property bas been seiz.ed. It is open to him to waive it 
To hold that the period of nim~ty days which is mentioned in sec. 132(5) is 
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DIRECTOR INCOM?TAX V. POORAN 
105 
an, .immutable one would cause more injury to the citizen than tu the Revenue. 
lt.· 1s, therefore, open to the aggricvc,cl pcnoxi, as happened in th.is case, to 
ai:r.ec to a fresh d1spost1l cf the case by the Income-Tax Officer and thereby 
yia~ve. t~e period of limitation. It 
i~; not a case of the parties conferrinJ 
Juns.d1ct1on on the Inc~me· Tax Offieer by consent. Ii is a case where tbe 
pa~t1~ ~greed .to a particular mode of exercise by the Income-Tax Officer of a 
JUrtsd1chon which he cannot be said to have lost or in respect of which be hits 
become funct11s officio. Though it 
i~ true that on passing an order under 
sec. 132(5) the Income-tax Officer can be said to have become func1113 officio. 
it 1.s the co

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