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Issues:
1. Unconditional release of seized assets under article 226 of the Constitution. 2. Interpretation of provisions under sections 132 and 132B of the Income Tax Act, 1961. 3. Assessment order set aside by Commissioner (Appeals) and remanded for fresh assessment. 4. Application for release of assets rejected by Commissioner, leading to writ petition. Detailed Analysis: 1. The petitioner sought the unconditional release of seized assets under article 226 of the Constitution. The assets were seized during a search conducted under section 132(1) of the Income Tax Act, 1961. The Income Tax Officer (ITO) estimated undisclosed income, leading to a tax liability. The petitioner appealed the assessment order, which was set aside by the Commissioner (Appeals), prompting the application for release of assets. The Commissioner rejected the application, resulting in the writ petition for quashing the order and mandamus for release of assets. 2. The petitioner argued that the retained assets could not be utilized for any liability determined after the decision of the Commissioner (Appeals) and that no outstanding liability existed after the assessment was set aside. However, the court found no merit in these submissions. Section 132B of the Act governs the application of retained assets, allowing for the recovery of liabilities determined post-assessment. The court clarified that assessments under the Act include regular assessments under section 143(3), best judgment assessments under section 144, and reassessments under section 147. The assets retained could be utilized for liabilities arising from a fresh assessment post the Commissioner's decision. 3. Regarding the setting aside of the assessment by the Commissioner (Appeals) and the remand for a fresh assessment, the court held that the assessment for the relevant year was not completed or quashed. As a result, the assets retained under section 132(5) had to be dealt with as per section 132B, indicating an outstanding liability against the petitioner. The court dismissed the notion that no liability existed and upheld the retention of assets for potential future liabilities. 4. The court ultimately deemed the petition as misconceived and dismissed it with costs, emphasizing the legal provisions governing the retention and utilization of seized assets under the Income Tax Act, 1961. The judgment highlighted the importance of understanding the statutory framework for assessments and the implications of setting aside assessment orders for the release of seized assets.
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