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TMI Blog2016 (5) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... nts subject to payment of the price as per the valuation of the assets, it would be in the interest of the revenue to retain the amount and release the ornaments, inasmuch as, at least to that extent, the dues of the petitioner would stand recovered. Otherwise, the ornaments would keep lying in distraint with the Department without getting any revenue therefrom. Thus, though the above referred steps have been taken by the respondents on a misunderstanding of the instructions of the Commissioner of Income Tax-III, no prejudice would be caused to the revenue if the ornaments are released and the equivalent amount paid by the petitioner is appropriated towards the outstanding dues of the petitioner. The petition succeeds and is accordingly allowed. The respondents are directed to forthwith hand over the seized ornaments to the petitioner as expeditiously as possible. A grievance has been raised by the Department that the petitioner is not duly cooperating with the revenue authorities in recovery of the outstanding dues. It is hoped and expected that the petitioner will extend full cooperation to the Department in this regard. - SPECIAL CIVIL APPLICATION NO.6822 of 2016 - - - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation report dated 23rd December, 2015 was also enclosed therewith. In view of the fact that the above letter asking for payment of ₹ 22,40,101/- was received on 31st December, 2015, the petitioner asked for extension of time up to 20th January, 2016 which came to be accepted by the first respondent. The petitioner, therefore, by a letter dated 6th January, 2016 put that fact on record and requested the first respondent to issue a challan so that the petitioner could make arrangement of funds. The office of the first respondent handed down a duly filled in challan to the petitioner on 9th February, 2016, whereupon the petitioner paid ₹ 22,40,101/- to the Income Tax Department by depositing such amount in ICICI Bank Limited on 10th February, 2016. It is further the case of the petitioner that by way of abundant caution, before making payment, he addressed a letter dated 19th January, 2016 to the Principal Commissioner of Income Tax-5, Ahmedabad, the second respondent herein, narrating the above facts and requesting him to grant approval for release of the seized jewellery. It is the case of the petitioner that he and his Chartered Accountant - Shri Keyur B. Thakkar m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the seized ornaments. The attention of the court was invited to the circular dated 21st January, 2009 issued by the Central Board of Direct Taxes regarding release of seized assets other than cash. Referring to clause (e) of para 3 of the said circular, it was submitted that it is the policy of the Board to return the seized assets in exchange of an equivalent amount of cash. It was submitted that even otherwise, it being the policy of the respondents to return the seized ornaments in exchange of an equivalent amount of cash, the respondents are required to be directed to release the ornaments forthwith and abide by the promise made to the petitioner. 5. Opposing the petition, Mrs. Mauna Bhatt, learned senior standing counsel for the respondents invited the attention of the court to the letter dated 9th September, 2014 of the Income Tax Officer conveying the decision of the Commissioner of Income Tax, Ahmedabad-3 to the Additional Commissioner of Income Tax, Range-7 to point out that what was approved by the Commissioner was that the assessee should pay the outstanding dues first after which release can be considered. It was submitted that on account of some misunderstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized ornaments against payment of equivalent amount. On a reading of the instructions conveyed by the Commissioner of Income Tax-III, it does appear that there is some misunderstanding on the part of the respondents as regards the decision of the Commissioner of Income Tax-III. Nonetheless, the position as on date is that pursuant to a representation made by the respondents, albeit on a misunderstanding, the seized ornaments have been valued by the Department and the petitioner has deposited an equivalent amount with the respondents. Since the petitioner has deposited the amount of ₹ 20,40,101/- pursuant to a promise made by the Department to release such ornaments, if the respondents are not in a position to return the ornaments, they are duty bound to return the amount so deposited by the petitioner. 7. The question that now arises for consideration is as to whether the Department should be directed to return the amount deposited by the petitioner or to release the ornaments. 8. In this regard, it may be germane to refer to the Circular F. No.286/6/2008-IT(Inv.II) dated 21st January, 2009 issued by the Central Board of Direct Taxes on the subject of Release of seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it easier for the Department to adjust the cash against the tax liability and also provides for release of ornaments subject to payment of the price as per the valuation of the assets, it would be in the interest of the revenue to retain the amount and release the ornaments, inasmuch as, at least to that extent, the dues of the petitioner would stand recovered. Otherwise, the ornaments would keep lying in distraint with the Department without getting any revenue therefrom. Thus, though the above referred steps have been taken by the respondents on a misunderstanding of the instructions of the Commissioner of Income Tax-III, no prejudice would be caused to the revenue if the ornaments are released and the equivalent amount paid by the petitioner is appropriated towards the outstanding dues of the petitioner. 10. In the light of the above discussion, the petition succeeds and is accordingly allowed. The respondents are directed to forthwith hand over the seized ornaments to the petitioner as expeditiously as possible. A grievance has been raised by the Department that the petitioner is not duly cooperating with the revenue authorities in recovery of the outstanding dues. It is hop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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