1981 (9) TMI 8 - HC - Income Tax

Summary

Issues:
Challenge to assessment orders under the Income Tax Act and Wealth Tax Act, refund of amounts paid, release of seized goods, validity of penalty orders, demand for undertaking before releasing seized goods.

Analysis:

The petitioners sought to quash assessment orders under the Income Tax Act and Wealth Tax Act, penalty orders, and requested a refund of amounts paid, along with the release of seized goods. The settlement agreement between the petitioners and the Central Board of Direct Taxes involved assessments in the status of an HUF, division of income and wealth, penalties, interest, and payment terms spread over two years. The petitioners filed returns accordingly. Assessments were made for various years under the Income Tax Act and Wealth Tax Act, with penalty orders also issued. The petitioners paid a substantial amount but still owed a balance. The Department retained some seized goods pending payment. The petitioners did not challenge the assessments or penalties in a timely manner, limiting their ability to contest them now. However, a dispute arose regarding the release of additional seized goods, as the Department demanded an undertaking for payment before release, contrary to the settlement terms. The Court found this demand unjustified, ruling in favor of the petitioners for the immediate release of 20 boxes of silver ornaments without any undertaking. The petitioners were instructed to use the proceeds from the released goods to make payments towards their outstanding balance. The Court allowed the petitions in part, directing the release of the goods within two weeks without costs.