2011 (1) TMI 1185 - HC - Income Tax

This writ petition is filed by the petitioner seeking for a direction to release the gold articles seized vide Exts.P1, P1(a) and P1(b) to the petitioner, accepting the security by way of deposit of title deeds of the property and declaration, without insisting for registration of Mortgage Deed. - whether the Mortgage Deed has to be registered or not - property offered is that of the brother of the petitioner who is a stranger to the transaction - Department is insisting for execution of a registered Mortgage Deed - counsel for the petitioner submitted that the matter has been pending for a long time, direction to the competent authority among the respondents to complete the process of assessment and issue final proceedings within a period of four months from today - writ petition is accordingly disposed of

Summary

Issues:
1. Seizure of gold articles under the Income Tax Act, 1961.
2. Dispute regarding release of seized gold articles.
3. Requirement of registration of Mortgage Deed for offering property as security.
4. Arguments on the necessity of registering the Mortgage Deed.
5. Concerns over stamp duty and completion of assessment proceedings.

Analysis:
1. The petitioner sought the release of seized gold articles under the Income Tax Act, 1961, which were confiscated from him as a carrier/agent of another individual. The petitioner, along with the other party, filed a writ petition seeking the release of the gold articles, offering to provide security by depositing title deeds of a property without registering a Mortgage Deed.

2. The Department initially refused to release the gold articles without the registration of a Mortgage Deed, leading to objections from the petitioner. Despite directions from the Court to approach the Commissioner of Income Tax with a request for release by offering immovable property as security, the Department insisted on the registration of a Mortgage Deed, causing further dispute.

3. Both parties presented elaborate arguments citing various court decisions regarding the necessity of registering a Mortgage Deed. The petitioner offered his brother's property as collateral, but the Department insisted on a registered Mortgage Deed due to the brother's status as a stranger to the transaction, leading to concerns over stamp duty costs amounting to Rs.9,00,000.

4. To expedite the resolution of the matter, a suggestion was made during arguments to complete the assessment proceedings within a specified time frame. The petitioner's counsel requested completion within three months, while the Department sought additional time. The Court acknowledged the prolonged proceedings and directed the competent authority to conclude the assessment process and issue final proceedings within four months to alleviate hardship on the involved parties.

5. Considering the extended duration of the proceedings and to prevent further inconvenience, the Court disposed of the writ petition with a direction for the timely completion of assessment procedures within four months, emphasizing cooperation from all parties involved and refraining from imposing any costs in the matter.