Director General of Income Tax (Inv), Air Intelligence Unit, Chennai – 34 v. Apparasu Ravi

J U D G M E N TF.M.IBRAHIM KALIFULLA, J.The Income Tax department is the appellant. The challenge is tothe order of the learned Single Judge dated 13.04.2010, passed inW.P.No.921 of 2010.2. By the impugned order, the learned Single Judge set aside theorder of the second appellant dated 10.12.2009, passed under Section132B of the Income Tax Act and consequently directed the fourthappellant to return the gold jewellery weighing 9957/430 grams seizedfrom the respondent at the gate of Anna International Airport,Chennai on the night of 13th August, 2009/early morning of 14th August,2009.3. The brief facts which are required to be stated as pleaded bythe appellants are that the respondent travelled from Singapore toChennai on 13.08.2009, with 10 kg of gold. He was intercepted by theAir Intelligence Unit of the Income Tax Department at the Airportafter Customs clearance. When he was asked as to whether he wascarrying any valuable items from Singapore, the respondent informedthat he was carrying 10 kgs of gold jewellery. When he was askedabout the purpose of carrying 10 kgs of gold jewellery from Singaporeto India, the respondent stated that he does not own 10 kgs of gold,that after obtaining boarding pass at Singapore Airport, when he wasready to enter the check-in area to complete the other formalities,an unknown person approached him with a request to carry 10 kgs ofgold jewellery to Chennai. The said person is stated to have offeredRs.8,000/- to the respondent to carry the said gold jewellery toChennai and hand it over to a person at Chennai at the InternationalAirport arrival. According to the respondent, when he asked him asto how he could identify the receiver of the gold jewellery at theChennai Airport, the said unknown person informed him that if hefurnishes the mobile number, the other person will be able toidentify him. The said unknown person also stated to have told himthat if the other person at Chennai reveal the respondent's mobilenumber furnished by him at the Singapore Airport, he should hand overthe 10 kgs of gold to him. The said unknown person is also stated tohave given USD 10950 for the purpose of payment of Customs Duty atChennai Airport and that the sum of Rs.8,000/- would be paid by theperson waiting at the Chennai Airport on receipt of 10 kgs of goldjewellery.4. It is the case of the appellants that when the aboveinformation was gathered from the respondent, in order to hold asearch on him, they obtained necessary sanction from the CompetentAuthority and thereafter held the search on the respondent on14.08.2009. https://hcservices.ecourts.gov.in/hcservices/

5. It is stated that in the course of the search on 14.08.2009,the respondent took the very same stand as regards the 10 kgs of goldjewellery carried by him and he also stated that he would be stayingin India for about two months and that he has not purchased hisreturn ticket till that point of time. He is also stated to haverevealed his place of abode as his ancestral house at No.4/175,Gandhi Nagar, Thirumallaivasal, Sirkali Taluk, Nagai District.6. The appellants thereafter, seized the gold jewellery underSection 132 of the Income Tax Act. After the seizure, the respondentfiled a writ petition in W.P.No.20083 of 2009 for Mandamus to directthe first appellant to forthwith release the gold jewellery weighing9957.43 grams, which he imported after paying the Customs Dutythereon, which was seized from him at Anna International Airport inF.No.ADIT/A.I.U./2009-10.7. The said writ petition was filed by one S.Manikandan son ofK.Subramanian claiming himself to be the Power of Attorney Agent ofthe Respondent. In the affidavit filed in support of the writpetition, the petitioner therein claimed that the respondent had beendoing business in gold jewellery in Singapore and that he had broughtthe jewellery into India as his stock-in-trade of business, whichcannot be seized at all under the amended provisions of Section 131of the Income Tax Act.8. He further claimed that he was coerced by the appellant toadmit as though the gold jewellery brought by him belonged tosomebody else. The respondent also sent a communication dated02.09.2009, stating that the jewels belonged to him and that he was aNon Resident Indian and that the jewels should be returned to him. 9. The said writ petition was disposed of by an order dated20.10.2009, by which, the appellants were directed to complete theenquiry within a period of ten weeks from the date of receipt of acopy of the order and depending upon the out come of the enquiry, theprayer of the petitioner for release of the gold jewellery can alsobe considered by the appellants. The respondent was directed toextend all his co-operation in completing the enquiry within thestipulated time limit.10. Thereafter, the second appellant passed an order dated10.12.2009, under Section 132B(1) of the Income Tax Act holding thatthe passport entries of the respondent revealed that he stayed inIndia during the period 16.10.2004 to 28.11.2007 more than 365 daysapart from 60 days stay in the relevant previous year as stipulatedunder Section 6(1)(c) of the Income Tax Act and that therefore, hewas a resident in India and hence his total income was taxable inIndia. https://hcservices.ecourts.gov.in/hcservices/

11. According to the second appellant, as the respondent was aresident of India within the meaning of Section 6(1)(c) of the IncomeTax Act, a formal notice under Section 153A(1)(a) of the Act was alsoissued to him calling upon upon him to file his returns of totalincome for the Assessment Years 2004-05 to 2010-11. The order alsorevealed that a notice dated 02.11.2009, was issued to the respondentextending an opportunity to explain the nature and source ofacquisition of the jewellery/asset seized from him. 12. It is stated that the respondent did not appear for thehearing fixed on 09.12.2009. On the above statement of facts, thesecond respondent held that since the nature of source of acquisitionof jewellery which was valued at Rs.1,37,21,202/- and the source forpurchase of foreign exchange amounting to USD 10950 (Rs.5,03,700/-)not having been satisfactorily explained by the respondent, a sum ofRs.1,42,24,902/- would be deemed to be the income of the assesseefrom the unexplained sources for the Financial Year 2009-10(Assessment Year 2010-11).13. It was further held that since the respondent would be anassessee and has not filed his return of income in India for theAssessment Years 2004-05 to 2010-11, the tax liability is likely tobe more than the amount of seized asset, which according to thesecond appellant worked out to Rs.58,49,217/- and such amount wouldattract penalty leviable at 200% on the tax sought to be evaded underSection 271(1)(c) of the Act in a sum of Rs.1,16,98,434/- in all asum of Rs.1,75,47,651/-.14. The second respondent thereafter, held that since the taxliability was more than the value of the seized asset, the assessedjewellery would be retained towards the tax liability and thejewellery cannot be released pending finalisation of the assessmentand recovery of the entire tax or completion of the assessment. 15. It was further observed that the exemption provided underthe Customs Act for acquiring gold jewellery cannot be taken forgranted in all circumstances for claiming immunity when it comes tothe question of Income Tax Act.16. As against the said order of the second appellant, therespondent preferred the present writ petition in W.P.No.921 of 2010.The second appellant has filed a counter affidavit resisting theclaim of the respondent for return of jewellery. 17. By the order impugned in this appeal, the learned SingleJudge held that the respondent stayed in India for 96 days during theprevious year viz., 2009-10 relevant to the Assessment Year 2010-11. https://hcservices.ecourts.gov.in/hcservices/

18. The learned Single Judge also held that admittedly, therespondent was in India for more than 365 days between 17.10.2004 and28.11.2007 and thereafter from 13.08.2009 onwards on different datesfor 96 days. The learned Single Judge also repelled the contentionof the appellants that the stay in India in the previous year shouldbe counted only in respect of a voluntary stay and that therespondent had never been in India prior to 13.08.2009 and the 60days stay in India was only on account of the proceedings initiatedby the appellants.19. The learned Judge however held that the respondent's casewas covered by Explanation (b) to Section 6(1)(c) of the Act andsince the respondent did not stay in India in the previous year viz.,2009-10 for 182 days, the appellants had no jurisdiction to treat therespondent as a 'resident' for the purpose of passing orders underSection 132B of the Act.20. The learned Judge therefore held that the impugned orderdated 10.12.2009, was invalid and consequently directed the fourthappellant to return the gold jewellery weighing 9957/430 grams seizedfrom the respondent at the gate of Anna International Airport,Chennai on the night of 13th August, 2009/early morning of 14th August,2009.21. Assailing the order of the learned Single Judge,Mr.J.Narayanasamy, learned Standing Counsel for the appellantscontended that going by the facts revealed, it was brought out thatthe respondent who initially claimed, prior to the seizure, that 10kg of gold jewellery brought by him into India along with USD 10950did not belong to him and that subsequently, he took a contradictorystand that the gold jewellery belonged to him, which he brought forhis daughter's wedding as well as to start gold jewellery businessand having regard to the purpose of stay of the respondent during theprevious years between 2004-2007 and the number of days stay in Indiain the relevant previous year viz., 2009-10, he was covered bySection 6(1)(c) of the Act and consequently liable to payment of taxin India.22. The learned Standing Counsel would further contend that thesearch and seizure effected under Section 132B of the Act ought notto have been interfered with by the learned Single Judge.23. According to the learned Standing Counsel the respondentshould therefore undergo the assessment proceedings and dependingupon the out come of the assessment to be made, the return ofjewellery can be decided. https://hcservices.ecourts.gov.in/hcservices/

24. As against the above submissions, Mr.B.Kumar, learned SeniorCounsel appearing for the respondent submitted that under theNotification No.31/2003, dated 01.03.2003, issued under theprovisions of the Customs Act, exemption was granted in publicinterest for import of gold bars or gold in any form, at the rateprescribed under the said Notification subject however to thecondition that duty should be paid in convertible foreign currencyand the quantity of gold imported in any form should not exceed tenkilograms per eligible passenger. The said Notification alsoprovided for such import either by carrying it by the eligiblepassenger at the time of his arrival in India or by import within 15days of such arrival in India. The eligible passenger has beenexplained in the very same Notification by stating that "a passengerof Indian origin or a passenger holding a valid passport, issuedunder the Passports Act, 1967, who is coming to India after a periodof not less than six months of stay abroad and even short visits, ifany, made by the eligible passenger during the aforesaid period ofsix months shall be ignored if the total duration of stay on suchvisits does not exceed thirty days and such passenger has not availedof the exemption under this Notification at any time of such shortvisits."25. The learned senior counsel for the respondent would furthercontend that the respondent was an 'eligible passenger' since priorto his visit on 13.08.2009 to India, he stayed in abroad for nearly 3years and therefore he was entitled to bring 10 kg of gold when hevisited India on 13.08.2009.26. The learned senior counsel by referring to yet otherdirections issued by the Government of India dated 02.03.1995 and22.04.1992 to the effect that it is not necessary for a passenger toown the gold in order to become eligible to import and that anyincoming passenger can import the gold as long as he satisfied theconditions of stay abroad and those relating to payment of duty inforeign exchange and the maximum quantity permitted, as well as thatthere was no condition that the source of earning from which thegold was purchased be verified. It was therefore contended that thedirections therefore made it clear that it would be beyond thejurisdiction of the Customs officials to go into this aspect.27. The learned senior counsel for the respondent also referredto a further Notification issued under Section 3 of the ForeignExchange Management Act, 1999 by which many constraints in dealingwith the money by NRI came to be relaxed.28. The learned senior counsel then contended that in order tosatisfy the stipulations contained in Section 6(1)(c) to that therespondent was a 'resident' in India, the appellants were bound tosatisfy the twin requirement that he stayed in India for 365 days https://hcservices.ecourts.gov.in/hcservices/ within four years preceding the previous year and that by virtue ofthe explanation (b) to Section 6(1), he should have stayed in Indiain that previous year for 182 days.29. The learned senior counsel therefore submitted that theIncome Tax authorities cannot place an interpretation under Section 6(1)(c) to bring out the situation which the Government of Indiawanted to avoid and thereby create a friction. According to thelearned senior counsel Section 6(1)(c) must be dissimilated whichwill not create a friction.30. The learned senior counsel contended that if the search andseizure could not have been made on the date of seizure for non-compliance of Section 6(1)(c), it cannot be given an extension bytaking into account the subsequent event of the respondent's stayafter the seizure.31. According to the learned senior counsel there was violationof the right to property which is Constitutionally protected underArticle 300(A) in the absence of any statutory provisions. 32. The learned senior counsel also contended that the searchand seizure effected by the appellants was in violation of Section132 of the Act, in as much as, there was no prior informationavailable in order to effect seizure and consequently the veryseizure was invalid. 33. The learned senior counsel placed heavy reliance upon thedecision of the Delhi High Court reported in (2000) 242 ITR 302 (AjitJain Vs. Union of India) which was also affirmed by the Hon'bleSupreme Court in the decision reported in (2003) 260 ITR 80 (Union ofIndia Vs. Ajit Jain and Another). The learned senior counsel furthercontended that the estimated tax liability and penalty in the orderdated 10.12.2009, does not fit in to Section 132 of the Income TaxAct, which only refers to ascertaining the liability of tax andinterest.34. By way of reply Mr.J.Narayanasamy, learned standing counselcontended that the decision relied upon by the respondent varies infacts and therefore the same cannot be applied to the case on hand. 35. The learned standing counsel also contended that merecompliance of the Notification issued under the Customs Act will haveno bearing on the action taken under the provisions of the Income TaxAct.36. According to the learned standing counsel going by theversion of the respondent himself, there were contradictions asregards the ownership of the gold brought by him and therefore in thepresent juncture the seizure effected by the impugned order dated https://hcservices.ecourts.gov.in/hcservices/

10.12.2009, should not be interfered with. The learned standingcounsel contended that if seizure of gold is released as directed bythe learned Single Judge, having regard to the fact that therespondent had secured two passports and also taken steps to secure athird passport, the balance of convenience is also not in favour ofthe release of the gold jewellery seized and that he can very wellawait the assessment proceedings and depending upon the out come,the appellant can be allowed to decide the disposal of the goldjewellery seized.37. The learned standing counsel also stated that the appellantsare always prepared to conclude the assessment proceedings at anyearly date even though it has got time till 31.12.2012, to pass theorder of assessment.38. It was lastly contended by the learned standing counsel thatsince the respondent himself came out with two different statementsas regards the ownership, if ultimately some other party claimedownership for the gold jewellery, the same will create seriousimplications and therefore the release of the gold jewellery orderedby the learned Single Judge should not be sustained.39. Having heard the learned standing counsel for the appellantsand the learned senior counsel for the respondents, the issues thatcalls for consideration in this appeal are three fold viz.,(a) Whether the search and seizure made on14.08.2009, was in accordance with the provisionsof the Income Tax Act ?(b) Whether the respondent can be held to bea 'resident' of India falling under Section 6(1)(c) of the Act ? and(c) Whether the order passed under Section132B of the Act dated 10.12.2009 can be sustained,awaiting the conclusion of the assessmentproceedings ?40. Based on the answers to the above questions, the relief tobe granted will have to be decided.41. As far as the first question is concerned, it is necessaryto refer to certain basic facts relating to the search and seizuremade on 14.08.2009, based on the original file placed before theCourt. The file discloses that on 13.08.2009, a sworn statement wasrecorded under Section 131 of the Income Tax Act after issuing asummons to the respondent at 11.00 pm. After recording the formalidentification of the respondent relating to his address, avocation,family set up etc., he was asked as to whether he was carrying anyvaluable items from Singapore to Chennai. The respondent gave thefollowing answer: https://hcservices.ecourts.gov.in/hcservices/ "This 10 kgs gold jewellery is not own to me.After obtaining boarding pass at Singapore Airport, Iwas ready to enter check-in area to complete othercheck-in formalities. An unknown person came andapproached me at the check-in area with a request tocarry 10 kgs of gold jewellery to Chennai. Hefurther instinct me and offered Rs.8000 to carrythese gold jewellery to Chennai and hand it over tothe person known to him (unknown to me) at theInternational Airport arrival hall in ChennaiAirport. I asked him how I will identify thereceiver of the gold jewellery at the ChennaiAirport, for which he replied that his man in Chennaiwill easily identify me and ask my mobile number.When his persons reveals my mobile number which Igave him at Singapore Airport, I have to hand overthe 10 kgs of gold jewellery. In addition he hasgiven US$10950 for the purpose of customs duty to bepaid at Chennai Airport. Further he stated thatRs.8,000 will be paid by his person waiting atChennai Airport on receipt of the 10 kgs of goldjewellery at the time of handing over of goldjewellery."42. Thereafter, based on the said information, necessarypermission was sought for warrant of authorisation under Section 132of the Income Tax Act to make a search on the respondent. Necessaryauthorisation was secured from the fourth appellant and was issued tothe first appellant. Based on the said authorisation, search wasconducted on the respondent under Section 132 of the Income Tax Act,which resulted in seizure of the gold jewellery worthRs.1,37,21,202/-. The search and seizure was effected on 14.08.2009.43. In the first instance, when we examine the initial searchand seizure effected on the respondents, the contention on behalf ofthe respondents was that the same was in violation of Section 132(1)of the Income Tax Act.44. According to the learned senior counsel for the respondentin order to effect the search and seizure on the respondent, thereshould have been prior information about the possession among otheritems jewellery which would not be disclosed for the purpose of theAct to be dealt with as undisclosed income or property and that thereshould have been reason to believe such information in order to holdthe search and seizure.45. In support of the said submissions, the learned seniorcounsel placed reliance upon the decision reported in (2000) 242 ITR302 (Ajit Jain Vs. Union of India) which was also affirmed by the https://hcservices.ecourts.gov.in/hcservices/ Hon'ble Supreme Court in the decision reported in (2003) 260 ITR 80(Union of India Vs. Ajit Jain and Another). 46. The Division Bench decision of the Delhi High Court reportedin (2000) 242 ITR 302 (Ajit Jain Vs. Union of India) was a case wherethe petitioner therein went from Mumbai to Chennai on 09.01.1996,with a sum of Rs.8.60 lakhs, which was duly reflected in thecompany's cash book, in which he was the Managing Director and onreaching Chennai, he stayed in Hotel Chola Sheraton. According tohim the said money was to be deposited with a bank for making a bankdraft for payment of custom duty on 12.01.1996. While he was stayingin the said hotel, a raid was conducted by the officers of the CBI on11.01.1996 and a sum of Rs.8.6 lakhs was recovered from him. On theinformation of the CBI the respondents 4 and 5 therein viz., theDirector of Income Tax (Investigation) and Assistant Director ofIncome Tax (Investigation) arrived in the room and took intopossession of the said amount of Rs.8.5 lakhs. A statement of thepetitioner was recorded on oath by the said respondent 5, wherein inanswering to a question with regard to the source and purpose forwhich the money was kept by him, he stated that the money was out ofthe sale proceeds fully recorded in the books of the company and hewas carrying it because the same was to be deposited with the SIB(Customs). The said petitioner was summoned to appear beforerespondent No.5 on 12.01.1996, with the proof for the said amount forbeing reflected in the cash book, which the petitioner claimed tohave done by getting copies of cash book and ledger faxed by theDelhi office to respondent No.4 showing that the money was reflectedin the cash book.47. Thereafter, other proceedings were taken with reference tothe said seizure effected on the said petitioner. A challenge wasmade and the Division Bench of the Delhi High Court in the backgroundof the above facts held that the search and seizure under Section 132to be made, the manner in which the documents and the money seizedwere in violation of the condition precedent for authorising anaction under Section 132. The Division Bench also pointed out as towhat can be construed as information preceding such search and howthe expression 'reason to believe' mentioned in Section 132(1) to beconstrued.48. The Division Bench has held as under as regards"information" and "reason to believe" in the following words:"....."Information", in consequence of whichthe Director-General or the Chief Commissioner,etc., as the case may be, has to form his beliefis not only to be authentic but capable of givingrise to the inference that a person is inpossession of money, etc., which has not been orwould not be disclosed for the purpose of the Act. https://hcservices.ecourts.gov.in/hcservices/ In other words, it must necessarily be linkedwith the ingredients mentioned in the section.In L.R. Gupta's case (1992) 194 ITR 32(Delhi), speaking for the Court, B.N.Kirpal J. (ashis Lordship then was), explained the scope of theexpression "information" as under (page 45(:"The expression 'information' must besomething more than a mere rumour or a gossip or ahunch. There must be some material which can beregarded as information which must exist on thefile on the basis of which the authorising officercan have reason to believe that action undersection 132 is called for for any of the reasonsmentioned in clause (a), (b) or (c). When theaction of issuance of an authorisation undersection 132 is challenged in a Court, it will beopen to the petitioner to contend that, on thefacts or information disclosed, no reasonableperson could have come to the conclusion thataction under Section 132 was called for. Theopinion which has to be formed is subjective and,therefore, the jurisdiction of the court tointerfere is very limited. A court will not actas an appellate authority and examine meticulouslythe information in order to decide for itself asto whether action under section 132 is called for.But the court would be acting within itsjurisdiction in seeing whether the act of issuanceof an authorisation under its jurisdiction inseeing whether the act of issuance of anauthorisation under Section 132 is arbitrary ormala fide or whether the satisfaction which isrecorded is such which shows lack of applicationof mind of the appropriate authority. The reasonto believe must be tangible in law and if theinformation or the reason has no nexus with thebelief or there is no material or tangibleinformation for the formation of the belief, then,in such a case, action taken under section 132would be regarded as bad in law."By now it is well-settled that while thesufficiency or otherwise of the information cannotbe examined by the Court in writ jurisdiction, theexistence of information and its relevance to theinformation of the belief is open to judicialscrutiny because it is the foundation of thecondition precedent for exercise of a seriouspower of search of a private property or person, https://hcservices.ecourts.gov.in/hcservices/ to prevent violation of privacy of a citizen. InBahwant Singh Vs. R.D. Shah, Director ofInspection (1969) 71 ITR 550, a Division Bench ofthis court, while reiterating that the High Courtcannot test the adequacy or the grounds leading tothe satisfaction recorded, under section 132 ofthe Act, observed that if the grounds on which thebelief is founded are non existent or areirrelevant or are such on which no reasonableperson can come to that belief, the exercise ofthe power under the said section would be bad;short of that, the Court cannot interfere with thebelief bona fide arrived at by the Director orInspection. But the court could examine whetherthe reasons for the belief have a rationalconnection or a relevant bearing to the formationof the belief and a search warrant could not beissued merely with a view to making a roving orfishing enquiry.The expression "reason to believe" has beenexplained in various decisions by the Apex Courtand High Courts while dealing with sections 132and 148 of the Act. It has been held that theword "reason to believe" means that a reasonableman, under the circumstances, would form a beliefwhich will impel him to take action under the law.The formation of opinion has to be in good faithand not on mere pretence. For the purpose ofsection 132 of the Act, there has to be a rationalconnection between the information or material andthe belief about undisclosed income, which has notbeen and is not likely to be disclosed by theperson concerned." (Emphasis added)49. Applying the above principles to the case on hand we findthat unlike the facts involved in the Ajit Jain case, in the case onhand, the first appellant could gather the information from therespondent himself based on the statement made by him with referenceto 10 kgs of gold jewellery in his possession brought by him fromSingapore to India. In the statement recorded on 13.08.2009, at11.00 pm to a question as to whether he was carrying any valuablesfrom Singapore to Chennai, the said information was furnished by therespondent himself and consequently he also stated that the saidornaments weighing 10 kgs do not belong to him and was handed over tohim at Singapore Airport at the check-in counter by an unknown personto be handed over to another unknown person in Chennai. He alsostated that, that unknown person gave USD 10950 for the purpose ofpayment of Customs Duty. The further information was that forcarrying the said job, he would be paid a sum of Rs.8,000/- at thedestination. https://hcservices.ecourts.gov.in/hcservices/

50. When the above piece of information was gathered from therespondent, according to the appellants, they had reason to believethat the respondent who was in possession of such large quantities ofgold, which had not been or would not have been disclosed for thepurpose of the Act and consequently took the next step of getting theauthorisation from the competent authority to effect the search.Thereafter, the search was effected on the next day viz., 14.08.2009.Once again, the respondent reiterated what he stated on the previousday viz., 13.08.2009, as to how he brought 10 kgs of gold jewelleryfrom Singapore to India. 51. In the decision of the Delhi High Court, wherein an earlierdecision of the same High Court reported in (1992) 194 ITR 32(L.R.Gupta Vs. Union of India), has been pointed out wherein it isstated that there must be some material which can be regarded asinformation which must exist on the file and that the authoritycannot proceed based on mere rumour or a gossip or a hunch. In thecase on hand, the concrete information was furnished by therespondent himself which was exclusively known to him was revealed tothe first appellant. Therefore it will have to be found out whetherbased on the said information he had sufficient reason to believe forinitiating an action under Section 132.52. In that respect in that very decision it is pointed out thatthe opinion which has to be formed by the officers is subjective andthe jurisdiction of the Court to interfere is very limited and thatthe Court will not act as an appellate authority and examinemeticulously the information in order to decide for itself as towhether action under Section 132 was called for.53. The only other aspect which the Court can examine would bewhether the reason to believe was tangible in law and if theinformation or the reason had no nexus with the belief or there wasno material or tangible information for the formation of the belief,only then an action taken under Section 132 would be regarded as badin law.54. Applying the above well laid down principles, when weexamine the case on hand, there was an information and the firstrespondent who after collecting the information by recording it inthe form of statement, approached the competent authority fornecessary authorisation to effect a search and thereafter made asearch on the respondent and finding that the respondent wascategoric in his information revealed earlier and having found thegold jewellery weighing 10 kgs held by him proceeded to seize thesame under Section 132.55. We are therefore convinced that there was absolutely no flawin the action taken by the first appellant in effecting the search https://hcservices.ecourts.gov.in/hcservices/ and seizure under Section 132 who had the necessary information andthe said information had every nexus for formation of the belief.56. Since the sufficiency or otherwise of the information cannotbe examined by the Court in the writ jurisdiction, there is no scopeto dissect the information which existed with the first appellantwhich formed the basis for his reason to believe that the respondenthas not been or would not been disclosed for the purposes of the Act.57. Therefore the submissions made by the learned senior counselon behalf of the respondent on that score cannot therefore becountenanced. On the first issue, we hold that the search andseizure was validly made.58. With this, when we proceed to examine the second questionviz., whether the respondent can be held to be a 'resident' in Indiaas per Section 6(1)(c) of the Act. In order to bring an individualas a resident in India as per Section 6(1)(c), the said individualhaving been in India for a period of 365 days or more within 4 yearspreceding the previous year should also remain for a period of 60days or more in that previous year. The explanation (b) to Section 6(1) stipulates that being a Citizen of India who being outside Indiacomes on a visit to India in any previous year in that case insteadof 60 days of stay in India, such stay should be for 182 days. 59. Keeping the above statutory requirement of number of daysstay in India, when we find out the actual number of days stayed bythe respondent in India in the four years preceding the previous yearviz., 2009-10 and the number of days stayed in that previous year, itis not in dispute that between 16.10.2004 and 28.11.2007, therespondent stayed in India for more than 365 days and in thatprevious year viz., 2009-10, the respondent stayed in India for 96days. 60. Only other contention on behalf of the respondent was thathe would be governed by the explanation (b) to Section 6(1)(c) andtherefore stay in India in that previous year should be 182 days andnot 60 days. The said contention of the respondent found in favourwith the learned Single Judge and consequently the learned Judge heldthat the search and seizure made under Section 132 lackedjurisdiction.61. Therefore the issue depends upon the interpretation ofexplanation 6(1)(c). The said explanation reads as under:"Explanation (b) to Section 6(1)(c): being acitizen of India, or a person of Indian originwithin the meaning of Explanation to clause (e) ofsection 115C, who, being outside India, comes on avisit to India in any previous year, theprovisions of sub-clause (c) shall apply in https://hcservices.ecourts.gov.in/hcservices/ relation to that year as if for the words "sixtydays", occurring therein, the words "one hundredand eighty-two days" had been substituted."62. While trying to find out whether the respondent would begoverned by the said explanation, it will be necessary to refer tocertain entries found in the respondent's passport. The entriescontained in the passport have been listed out in the Annexure to theReply Rejoinder Affidavit of the first appellant dated 08.09.2010,filed in M.P.No.1 of 2010 in this writ appeal. The said Annexurecontains the details of the entries between 19.05.2000 and05.07.2008. On 19.05.2000, the respondent left India from Chennaiairport and arrived at Singapore on 21.05.2000 and he was permittedentry into Singapore for 14 days only for social visit. 63. The said visit pass was extended by Singapore Immigration on01.06.2000, till 18.06.2000. It was again extended on 13.06.2000,till 02.07.2000. After short stay in Malaysia in the same month, therespondent got the visit pass extended till 17.07.2000. Thereafter,the respondent appeared to have returned back to continue once againon 21.09.2000. He got his visit pass extended on some condition upto 09.12.2000. Such extension of visit pass continued till the endi.e. till 04.01.2009. In between the respondent had come to Indiaand visited Singapore not less than four occasions. In fact on23.02.2001, when the visit pass was issued to enter Singapore, it wasspecifically entered therein that the respondent was not permitted toengage in any business, profession or occupation without a valid workpermit till 09.03.2001. Similarly in the visit pass that enabled himto enter Singapore on 29.01.2007, it was specifically mentioned thatit was for social visit only that too for 30 days. 64. Again in the visit pass issued on 08.01.2008, an endorsementwas specifically made to the effect that he was not permitted to workor engage in any business, profession or occupation without a validwork pass. Similarly, such entry was noted in the visit pass issuedon 05.07.2008. 65. Therefore, going by the entries found in the passport it isrevealed that the respondent was visiting Singapore from India and itwas therefore quite apparent that the statutory documents viz., thepassport which can be relied upon as against any other claim made onbehalf of the respondent, whatever be the period of stay in theforeign countries, the respondent's stay therein was only as avisitor. In other words, being an Indian resident, he was permittedby those foreign countries to visit those countries viz., Singaporeand Malaysia and that on expiry of such visit pass, the respondentcame back to India being an Indian citizen.66. In this context, it will be quite necessary to make areference to the stress laid by the learned standing counsel for the https://hcservices.ecourts.gov.in/hcservices/ appellants on the letter dated 09.10.2009, issued by the Passportofficer of Tiruchirappalli, which discloses that the respondent wasoriginally possessing a passport bearing No.A6521094, which wasrenewed bearing No.G5949508 by mentioning his name as Ravi Apparasu.The said letter dated 09.10.2009, also revealed a starling fact thatthe respondent secured another passport bearing No.T682235, issued on07.03.1995, which expired on 06.03.2005, mentioning his father's nameas Vaithilingam and his wife's name as Ponni and certain otherdetails relating to his address, name of his mother etc.,67. In one of his statements, the respondent revealed his wife'sname as Pushpalatha, who is stated to be living in Singapore. Thelearned senior counsel appearing for the respondent fairly submittedbefore us that the respondent got a second wife who is living inIndia.68. Another starling fact was that the respondent tried toobtain yet another passport with reference No.A011326/99 in the nameof Ravi, father's name as Vaithilingam, mother's name as Radhaclaiming his date of birth as 20.07.1960, as aginst 15.01.1959mentioned in the passport dated 07.03.1995. The passport Officerhowever stated that no passport was issued in 1995 and the file wasclosed.69. Keeping the above details furnished by the passport officerin mind, when we examine the details of the respondent's visit toSingapore and Chennai on various dates, it will have to be held thatthe conclusions of the appellants that the respondent was notgoverned by the Explanation (b) to Section 6(1)(c) and was governedonly by Section 6(1)(c) alone cannot be faulted. The conclusions ofthe appellants that the respondent was not visiting India but wasonly visiting foreign countries is fully supported by the above validmaterials and the said conclusion reached by the appellants cannot beeasily assailed in the absence of any other legally acceptablematerial. There was no material to support the claim of therespondent that he was living in foreign countries on some otheravocation, job or business and that he was only visiting India for asojourn. 70. We therefore hold that the explanation (b) to Section 6(1)(c) is not attracted in the case of the respondent. Therefore whenthe respondent has satisfied the criteria namely 365 days in thepreceding four years of the previous year 2009-10 and remained inIndia for 96 days, in that previous year the consequent search andseizure effected on him by invoking Section 132(1) of the Act waswill within the jurisdiction of the appellant. 71. Once we are able to reach the above conclusion, the onlyother question is the validity of the order dated 10.12.2009, passedunder Section 132B of the Act. When the appellants had every https://hcservices.ecourts.gov.in/hcservices/ jurisdiction to invoke Section 6(1)(c) of the Act on the respondent,the respondent having filed his return of income, it is for therespondent to participate in the assessment proceedings and work outhis remedies. While dealing with the said issue, the apprehensionexpressed by the learned standing counsel for the appellants cannotbe brushed aside.72. As rightly pointed out by the learned standing counsel therewere contradictions in the statements of the respondent as regardsthe ownership of the 10 kgs gold seized from him. The contentionabout coercion etc., does not impress on us, in as much as, we findthat the respondent in his letter dated 02.09.2009, addressed to thefirst appellant, the whole content was written by him in Englishpointing out all the legal implications relating to Section 132 ofthe Income Tax Act. Therefore, the statement that he was notconversant with English, etc., were purely an after thought.73. Moreover, when he appeared for an enquiry before the firstappellant in the proceedings initiated under Section 132B of the Act,he categorically admitted that he had not obtained any licence fordoing any business in Singapore, that he came to India with suchlarge quantities of gold to start a jewellery business but yet he wasnot even aware of the caret value of the jewellery brought by him,while as per his original statement, the whole jewellery brought byhim belonged to somebody else.74. Therefore, it is not known whether the jewel really belongedto the respondent or to somebody else and therefore the relevance ofthe gold jewellery cannot be made in the present juncture. If reallythe respondent is interested in getting back the jewellery, he willhave to necessarily await the conclusions of the assessmentproceedings. 75. The contentions of the learned senior consul for therespondent by relying upon the Notification issued under the CustomsAct providing for exemption for bringing gold up to 10 kgs subject topayment of duty in foreign currency and based on mere six months stayin abroad will hold good only for the purpose of the provisioncontained in the Customs Act. 76. As rightly contended by the learned standing counsel for theappellants in the absence of any provision contained in the IncomeTax Act or Customs Act providing for extension of such benefits to beapplied while initiating proceeding under the Income Tax Act there isno scope to countenance such a contention made on behalf of therespondent, based on the Notification issued under the Customs Act.The said contention therefore is to be rejected in limine.77. The contention of the learned senior counsel for therespondent that the period of 60 days or 182 days should be counted https://hcservices.ecourts.gov.in/hcservices/ as on the date the respondent arrived in India i.e., on 13.08.2009,is concerned, the same was rejected by the learned Single Judge. Inany event going by the provisions contained in Section 6(1)(c), thesaid provision does not state that calculation of stay in therelevant previous year should be made only by keeping the date ofarrival in India. What has not been specifically provided in thestatute cannot be inferred as put forth by the learned senior counselfor the respondents. It was not the case of the respondent that theappellants forced the respondent to stay back in India after13.08.2009.78. In fact the respondent was freely travelling between Chennaiand Singapore even after 13.08.2009 and therefore nothing preventedthe respondent from staying back from India in order to ensure that60 days period was not complied with. Therefore the said contentiondoes not merit any consideration.79. For all the above stated reasons, we hold that the order ofthe second appellant dated 10.12.2009, passed under Section 132B ofthe Act cannot be interfered with and the order of the learned SingleJudge in having set aside the same cannot therefore be sustained.80. In order to enable the respondent to ascertain the taxliability, we only direct the appellants to conclude the assessmentproceedings expeditiously preferably within three months from thedate of receipt of a copy of this Judgment and it is open to therespondent to participate in the assessment proceedings and vindicatehis stand.81. The writ appeal stands allowed and the order of the learnedSingle Judge is set aside and the order of the second appellant dated10.12.2009, stands restored.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarkkTo1. 1. The Assistant Director of Income Tax (Inv) (AIU), 108, Nungambakkam High Road, Chennai – 34. https://hcservices.ecourts.gov.in/hcservices/

2. Income Tax Officer, Ward 1(3), Thirunarayanapuram East Road, Gandhi Nagar, Kumbakonam.3. The Director of Income Tax (Inv), Chennai – 34.4. The Director General of Income Tax (Inv), Air Intelligence Unit, Chennai – 34.1 cc To Mr.T.Chezhiyan, Advocate, SR.92023 JUDGMENT in W.A.No.1205 of 2010 MRD (CO)RH (3.1.11)