2013 (10) TMI 377 - HC - Income Tax

Block assessment - Proceeding u/s 153A against the employee who was authorized to collect the money from the Toll Plaza- Cash seized from the employee - Held that - It appears that the amount was collected at the Toll Plaza, where the fee for the Car was Rs.45/- and for the Truck/Bus, Rs.160/- per trip - Explanation given by the petitioner prima-facie appears to be reasonable - The amount belongs to the company i.e. the petitioner no. 1 and certainly not to the petitioner no. 2, who is merely an employee of the company. The explanation, if any, will have to be sought from the petitioner-company. So, there is no occasion to start the proceedings U/s 153 A of the Act against the petitioner No. 2, who is simply an agent of the company. Proceedings for the block period is not required in the case of the employee i.e. petitioner no.2 specially when no such proceedings were initiated against the petitioner no. 1 - Mandamus is issued for not proceeding any further against the petitioner no.2 pertaining to the block assessment in pursuance of the notice under Section 153-A However, department is always at liberty to take proceedings against the company i.e. petitioner no.1 but as per law.

Issues Involved:
1. Quashing of proceedings initiated under Section 153-A of the Income Tax Act.
2. Direction to release the seized cash of Rs. 7,15,000/-.
3. Prohibition/mandamus against assessing and imposing tax under Section 153-A for specific assessment years.
4. Direction to release the seized cash with interest due to alleged procedural violations.

Issue-wise Detailed Analysis:

1. Quashing of Proceedings Initiated Under Section 153-A:
The petitioner sought to quash the proceedings initiated under Section 153-A of the Income Tax Act for the assessment years 2006-07 to 2011-12. The petitioner argued that Rule 112-F of the Income Tax Rules 1962, along with Circular No. 10 of 2012 dated 31.12.2012, prohibits such proceedings. The court noted that Rule 112-F came into effect on 01.07.2012, and the circular was dated 31.12.2012, while the cash was seized on 11.01.2012. Therefore, these provisions could not be applied retrospectively. The court concluded that the proceedings under Section 153-A against petitioner no. 2 were not justified as the amount belonged to the company (petitioner no. 1) and not the employee (petitioner no. 2). Consequently, the court set aside the block assessment proceedings against petitioner no. 2.

2. Direction to Release the Seized Cash of Rs. 7,15,000/-:
The petitioner requested the release of Rs. 7,15,000/-, which was seized while being transported to the HDFC Bank. The petitioner argued that this amount was collected from toll operations and was being deposited in the bank as per the company's standard operating procedure. The court found the explanation reasonable and directed the opposite parties to release the seized amount within four weeks, subject to the outcome of the proceedings for the current assessment year.

3. Prohibition/Mandamus Against Assessing and Imposing Tax Under Section 153-A:
The petitioner sought a prohibition/mandamus to prevent the opposite party from assessing and imposing tax under Section 153-A for the assessment years 2006-07 to 2011-12 and 2012-13. The court held that there was no need for block assessment proceedings against petitioner no. 2, who was merely an employee. However, the court allowed the proceedings for the current assessment year to continue and clarified that the department could take action against the company (petitioner no. 1) as per law.

4. Direction to Release the Seized Cash with Interest:
The petitioner also requested the release of the seized cash with 18% interest, citing procedural violations by the authorities. The court did not specifically address the interest claim but directed the release of the cash within four weeks, subject to the current assessment year's proceedings.

Conclusion:
The court set aside the block assessment proceedings against petitioner no. 2 and directed the release of the seized amount within four weeks, subject to the outcome of the current assessment year's proceedings. The court allowed the department to take action against the company (petitioner no. 1) as per law. The writ petition was disposed of with these observations and directions.

← Previous Next →