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2023 (8) TMI 95 - HC - Income TaxUnexplained money u/s 69-A - Petition sought return of the amount which was seized under Panchnama - ITAT accepted observed that the cash seized from Petitioner is the professional income and therefore cannot be treated as unexplained income - HELD THAT - It is of utmost importance that Revenue Officers are bound by the decisions of the Appellate Authority. Order of the Appellate Commissioner is binding on the Assistant Commissioner and the order of the Tribunal is binding upon the Additional Commissioner and below. The principal of juridical discipline requires that orders of the higher appellate authority should be followed by the subordinate authorities. For the affiant Ambernath B. Khule to state that the ITAT erred and the Court should not consider the order of the ITAT is highly objectionable. If the Officers of the Income Tax Department are allowed to continue this way, it will result only in undue harassment to assessees and chaos in administration of tax laws. Thus Hon ble Court be pleased to issue a Writ of Mandamus and/or any other Writ, Order or Direction in the nature of Mandamus directing the Respondents to return amount of Rs. 16 lakhs seized from the Petitioner on 17.7.2018. The amount shall be returned on or before 31st August 2023. If this amount is not returned to Petitioner by the department on or before 31st August 2023, Petitioner shall be paid interest on this amount from 12th May 2023, the date of pronouncement of the order by ITAT until payment/realization.
Issues involved:
The issues involved in this case are the seizure of cash from the Petitioner by the Air Intelligence Unit (AIU) of the Income Tax department while traveling, subsequent proceedings under the Income Tax Act, rejection of explanation by Assessing Officer, challenges before Commissioner of Income Tax (Appeals) [CIT(A)] and Income Tax Appellate Tribunal (ITAT), and the final decision of ITAT allowing the Petitioner's appeal. Seizure of Cash and Income Tax Proceedings: The Petitioner, an advocate, was intercepted and searched at the Delhi Airport by the AIU, where Rs. 16 lakhs cash was found. The amount was seized, and summons were issued under Section 131(1A) of the Income Tax Act, 1961. The Assessing Officer added this amount as unexplained money under Section 69-A of the Act, leading to a total income determination of Rs. 57,26,500. The CIT(A) concurred with the Assessing Officer's finding, prompting the Petitioner to challenge this before the ITAT on various grounds, including the source of cash and explanations for possession. ITAT Decision and Ruling: The ITAT, after considering the Petitioner's explanations and evidence, accepted that the seized amount was professional income, not undisclosed income. They found that the source of the seized cash was accounted for in the Petitioner's books of account, and the amount cannot be treated as unexplained income under Section 69-A of the Act. Consequently, the ITAT allowed the Petitioner's appeal and deleted the addition amount under Section 69A. Affidavit and Juridical Discipline: An affidavit filed by a party affirmed the ITAT's decision in favor of the Petitioner but also questioned the ITAT's justification. The Court emphasized the importance of following appellate authority decisions, stating that such actions by Revenue Officers could lead to undue harassment of taxpayers and chaos in tax law administration. The Court noted the objectionable nature of challenging the ITAT's order and urged for proper training of Income Tax Department Officers. Final Judgment and Relief Granted: The Court allowed the Petition, directing the Respondents to return the seized amount of Rs. 16 lakhs to the Petitioner by a specified date. Failure to return the amount would result in the payment of interest to the Petitioner as per Section 244A of the Act. The Court disposed of the Petition with no order as to costs.
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