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2021 (8) TMI 1268 - HC - Income TaxSearch executed u/s 132 - Seeking release of jewellery and cash seized by the Respondents from the Locker - HELD THAT - As order dated 13.08.2021, we had tried to balance the interest of the petitioner i.e., the assessee as well as the respondents/revenue. On 13.08.2021, we had refrained from passing a final order, though the legal issue was considered and a view was taken, with the hope that, the respondents/revenue would agree with the proposed directions, which are contained in paragraph 6.1 of our order dated 13.08.2021. Respondents/revenue, says that, his instructions are that, the respondents/revenue seem to be constrained by the language of Section 132B of the Income Tax Act, 1961 (in short the Act ). In our view, such a stand is untenable, and the reasons for the same are set forth in the order, dated 13.08.2021.
Issues Involved:
1. Release of seized jewellery and cash. 2. Timely decision on appeals by the Income Tax Department. 3. Interpretation and application of Section 132B of the Income Tax Act, 1961. 4. Compliance with Central Board of Direct Taxes (CBDT) Instruction No. 1916. 5. Outstanding tax demands and provision of security. Issue-Wise Detailed Analysis: 1. Release of Seized Jewellery and Cash: The petitioner sought a writ of Mandamus directing the respondents to release the jewellery and cash seized from the locker on 03.01.2018. The court noted that the petitioner had applied for the release of the jewellery and cash on 09.02.2018, but the respondents had not acted on this application. The court highlighted that under Section 132B of the Income Tax Act, the application should have been addressed to the Assessing Officer (AO), who is required to pass an order within 120 days from the date of the last authorization for search. Despite the application being directed to the Principal Director of Income Tax (Investigation)-1, a copy was also sent to the Deputy Commissioner of Income Tax, Circle-14(1), where the AO was positioned. The court found that the failure of the officers to act on the application was unjustified and directed the release of the jewellery under the conditions proposed by the petitioner. 2. Timely Decision on Appeals: The petitioner also requested a writ of Mandamus directing the respondents and the Income Tax Department to decide the appeals expeditiously. The court noted that the appeals concerning assessment years 2018-2019 and 2015-2016 were pending before the Commissioner of Income Tax (Appeals). The court emphasized the need for these appeals to be disposed of at the earliest to serve the interests of both the petitioner and the respondents. 3. Interpretation and Application of Section 132B: The court examined the provisions of Section 132B, which deals with the handling of assets seized during search operations. The petitioner argued that the jewellery should be released as the application was made within the stipulated timeframe. The respondents contended that the application was not viable as it was not addressed to the AO. The court rejected this argument, stating that the application was served on a senior officer who could have redirected it to the AO. The court underscored that the respondents' failure to act on the application was not justified and that the provisions of Section 132B were triggered, necessitating the release of the jewellery. 4. Compliance with CBDT Instruction No. 1916: The petitioner referred to CBDT Instruction No. 1916, which states that gold jewellery up to 500 grams per married lady should not be seized during search operations. The court acknowledged that the total weight of the seized jewellery was approximately 1936.06 grams, and the petitioner, being a married lady, was entitled to the release of at least 500 grams of jewellery. This instruction further supported the petitioner's claim for the release of the jewellery. 5. Outstanding Tax Demands and Provision of Security: The court noted that there were outstanding tax demands against the petitioner for assessment years 2018-2019 and 2015-2016, amounting to ?4,97,23,911, excluding penalties. The total demand, including penalties, was ?7,53,55,008, while the value of the seized assets was ?7,06,23,568. The petitioner offered to provide security in the form of unencumbered immovable property and cash, along with an undertaking not to part with or encumber the jewellery if released. The court found this offer reasonable and directed the respondents to act in accordance with the proposed security arrangement. Conclusion: The court disposed of the writ petition by directing the respondents to release the jewellery under the conditions proposed by the petitioner and to expedite the disposal of the pending appeals. The court emphasized the need for the respondents to act with due expedition and highlighted the importance of balancing the interests of both the petitioner and the respondents.
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