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Seizure of gold and gold ornaments by Income Tax Officer under Section 132 of the Income Tax Act, 1961. Detailed Analysis: 1. The case involved the seizure of gold and gold ornaments by the Income Tax Officer under Section 132 of the Income Tax Act, 1961, following a search at the residential premises of a partner of a business. The recovery included primary gold and gold ornaments, some of which were claimed by individuals residing at the premises. 2. The Collector, Central Excise, directed the release of certain gold ornaments to their owner but ordered confiscation of primary gold, subject to redemption on payment of a fine and penalty under the Gold (Control) Act, 1968. However, the gold and ornaments could not be returned due to a warrant of authorization issued by the Commissioner of Income Tax in favor of the Income Tax Officer. 3. The petitioners argued that the Income Tax Officer exceeded his authority by seizing assets belonging to specific individuals, which were not covered by the authorization. They also presented a letter indicating no prohibitory order against one of the claimants. 4. The Counsel for the Income Tax Officer defended the seizure under Sections 132 and 132-A of the Income Tax Act, stating that the Collector's findings were not binding on the Income Tax Department. The Commissioner of Income Tax was deemed a necessary party for relief. 5. The Court acknowledged the Commissioner's authority to authorize seizures under Section 132-A(1) but emphasized that the power to seize was limited to assets specified in the authorization. The seizure of assets belonging to specific individuals not covered by the authorization was deemed illegal and without jurisdiction. 6. The Court differentiated between assets seized from the partner and those specifically claimed by the individuals, ruling that certain items claimed by one of the individuals could not be returned as they were not part of the seized assets covered by the authorization. 7. The Court partially allowed one petitioner's claim and fully allowed the other's, directing the return of specific gold ornaments to each claimant as detailed in the Panchnama. The claim for certain items by one petitioner was rejected based on the authorization's scope. The Commissioner of Income Tax was not deemed a necessary party as the challenge was to the seizure's extent, not the authorization itself. 8. Ultimately, the Court ordered the return of specified gold ornaments to the claimants, rejected the claim for certain items, and directed each party to bear their costs. The outstanding security amount was to be refunded to the petitioners.
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