2018 (6) TMI 1588 - HC - Income Tax

Release of FDR and the jewellery seized in search u/s 132 - assessment u/s 153A - Adjustment of outstanding demand - HELD THAT - Entire cash amount seized during the search proceedings was adjusted against various demands raised during the assessment proceedings and even the details of adjustment has been provided to the assessee by a letter dated 21.06.2018. Thus, it appears that there is no question of return and/or release of cash seized during the proceedings as the same were already adjusted earlier in the year 2014. Revenue has stated at the Bar that after adjustment of the outstanding demand in the case of Saritha Gupta, the balance of fixed deposit receipts will be released at the earliest. At this stage, it is required to be noted that there is no demand of outstanding reported in the case of Sandeep Gupta. Thus, after adjustment of outstanding demand of ₹ 9,24,501/ shown as outstanding in the case of Saritha Gupta, the balance fixed deposit receipt as well as the jewellery seized during the course of search conducted on 08.09.2010 is required to be returned. There is no justification to continue with the seizure of such fixed deposit receipts, jewellery and national savings certificates etc. after deducting ₹ 9,24,501/ (with interest under the law) , shown to be outstanding in the case of one of the assessees Smt. Saritha Gupta.

Summary

Issues:
Non-return of fixed deposit receipts and jewellery seized during Income Tax Act search.

Analysis:
The judgment involved two petitions seeking relief under Article 226 of the Constitution of India. The main issue was the non-return of fixed deposit receipts and jewellery seized during a search under Section 132 of the Income Tax Act, 1961. The search conducted on the residential premises resulted in the seizure of various assets, including cash, jewellery, and fixed deposits. Subsequently, assessments were completed, leading to demands and penalty orders. The Assessing Officer passed a penalty order for various years, and rectification applications were filed to address discrepancies in the demands. The net amount payable by the assessee was determined after adjustments. The cash seized during the search was adjusted against outstanding demands, leaving the fixed deposit receipts and jewellery as the remaining issue for return.

The court noted that after adjusting the outstanding demand in one of the assessee's cases, the balance fixed deposit receipts and jewellery should be returned promptly. The judgment directed the respondents to release the seized fixed deposit receipts, national savings certificates, and jewellery within two weeks from the judgment date. The decision allowed the petitions, making the rule absolute without any costs.

In conclusion, the judgment addressed the non-return of fixed deposit receipts and jewellery seized during an Income Tax Act search. It highlighted the adjustments made for outstanding demands and directed the authorities to return the remaining assets promptly.