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Issues: Determination of whether the orders under section 132(5) of the Income Tax Act were issued beyond the 90-day period from the date of seizure, making them time-barred.
Analysis: The judgment by Judge A. S. Bains addressed two common cases, C.W.P. Nos. 439 and 438 of 1975, involving the Commissioner of Income-tax, Bombay City, authorizing a raid on the premises of the petitioners. The raid resulted in the seizure of silver utensils, books of account, gold jewelry, and cash. The petitioners challenged the orders retaining certain assets under section 132(5) of the Income Tax Act, claiming they were issued beyond the 90-day period from the date of seizure, rendering them time-barred. The crucial issue for determination was whether the orders were issued within the prescribed time limit. The petitioners argued that the limitation period should be counted from the dates of seizure at Bombay, while the respondents contended that it should be counted from the date when the ITO, Batala, took possession of the seized articles. The petitioners relied on legal precedents such as CIT v. Ramesh Chander and Tej Pal Oswal v. ITO to support their position. However, the judge distinguished these cases, stating that they involved seizures under different Acts, unlike the present case where the seizures were under the Income Tax Act. The judge referenced the Supreme Court case of Durga Prasad v. H. R. Gomes to emphasize that legal possession can be transferred even if physical possession is not immediately taken. Ultimately, Judge A. S. Bains concluded that the date of seizure should be considered when the ITO, Batala, having jurisdiction, took possession of the articles on 14th October 1974, rather than the earlier dates of seizure. Therefore, the impugned orders were deemed to be passed within the 90-day period from the date of seizure and were considered valid. With no other points raised, the writ petition was dismissed, and costs were imposed on the petitioners.
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