P.R. METRANI versus COMMISSIONER OF INCOME TAX, BANGALORE

Citation: [2006] SUPP. 9 S.C.R. 1 · Decided: 15-11-2006 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

P.R. METRANI 
A 
v. 
COMMISSIONER OF INCOME TAX, BANGALORE 
NOVEMBER 15, 2006 
[ASHOK BHAN AND DAL VEER BHANDARI, JJ.] 
B 
Income Tax Act, 1961; Sections 132: 
Search of premises of assessee-Recovery and seizure of unaccounted 
money, gold biscuits, gold jewellery and documents-Assessing authority C 
ordering certain additions in assessment-Additions in the assessment 
confirmed by the appellate authority holding that presumption under Section 
132 (4A) available for framing the regular assessment-Reversed by the 
Tribunal excepting additions relating to value of the properties-Tribunal 
referring questions of law pertaining to scope of Section 132 (4A) of the D 
Act-High Court answering all the questions in favour of Revenue-On 
appeal, Held: Object of introduction of Section 1 32 is to prevent evasion of 
tax-Since search and seizure is a serious invasion into the privacy of a 
citizen, it has to be construed strictly-8ub-section (4A) of Section 132 
enables an assessing authority to raise a rebuttable presumption that the 
recovered goods/money/material/documents beionged to the person from E 
whose possession these were recovered and the contents of the documents are 
true and in his handwriting-High Court erred in its finding that the 
presumption under Section 4(A) of Section 132 is irrubuttable presumption 
in so far as it relates to passing an order under Section 132(5) of the Act 
and rebuttable presumption for the purpose of framing a regular assessment F 
as it is not provided in the provisions that the presumption could be raised 
for the purpose of regular assessment-Moreover, whenever the Legislative 
intended to continue the presumption, it has provided so-Presumption under 
Section 132(4A) is available only in regard to the proceedings for search 
and seizure and for retention of the assets. seized in terms of Section 132(5) 
and their application under Section 132(B)-However, material seized could G 
be used as a piece of evidence in any other proceeding under the Act-
Hence, the matter remitted to the assessing authority for framing the assessment 
afresh in accordance with law. 
H 
2 
SUPREME COURT REPORTS (2006] SUPP. 9 S.C.R. 
A 
Words and Phrases: 
'Presumption' and 'conclusive proof-Meaning and implication of in 
the context of Section 132 of the income Tax Act, 1961,, 
The question arose for determination in these appeals preferred by the 
B assessee was as to whether the High Court was right in deciding the questions 
as mentioned below, referred to it by the Income Tax Appellate Tribunal at the 
instance of the parties, in favour of the Revenue. 
c 
(A) The questions referred to the High Court at the instance of the 
Revenue were: 
(1) as to whether the Income-tax Appella~e Tribunal was correct in law 
in holding that the presumption under Sub-section (4A) of Section 132 of the 
Income-tax Act, 1961, is only for the limited purpose of passing an order under 
Sub-section (5) of the said section; 
D 
(2) as to whether, on the facts and in the circumstances of the case, the 
Income-tax Appellate Tribunal was right in law in holding that the documents 
seized from the residential premises of the assessee-Hindu undivided family 
were not of the said Hindu undivided family and the entries therein did not 
pertain to it, particularly when the Income-tax Appellate Tribunal itself has 
E accepted that the entries in the said documents culminating in addition of Rs. 
2,62,100 in the assessment for the assessment year 1982-83. 
(B) The questions referred to the High Court at the instance of the 
assessee were: 
F 
(I) Whether, on the facts, the Tribunal was justified in holding that the 
applicant HUF was liable to be taxed in respect of Rs. 2,62,100/- being alleged 
unexplained investment in the property invoking the provisions of Section 69 
of the Act; 
(2) On the facts, whether the Tribunal was justified in holding that the 
G part of the entries in the seized documents could be attributed to the applicant 
HUF when the applicant had denied the knowledge or ownership of the 
document 
Allowing the appeals, the Court 
H 
HELD: 1.1. Sections 132 to 1328 of the Jncome Tax Act embody an 
) 
P.R. METRAN1 v. COMMNR OF INCOME TAX, BANGALORE 
3 
integrated scheme laying down the procedure comprehensively for search and A 
seizure and the power of the authorities making the search and seizure to 
order the confiscation of the assets seized. Section 132 of the Act is a Code 
in itself. It provides for the co

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