9911796707
TMI Blog2023 (3) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... ilver jewellery. 2.1 The petitioner was travelling from Rajkot to Varanasi for carrying out his business activities. He was carrying stock-in-trade of gold ornaments weighing 3230.550 grams. 2.2 He was intercepted by respondent No.4 at Lalbahadur Shshtri Airport, Varansi and his gold ornaments were seized. 3. The petitioner filed an application on 26th October, 2020 before the respondent Nos. 4 and 5 seeking to release the said seized gold ornaments on the ground that the same is stock in trade and therefore, they cannot seized the gold ornaments and can only be inventoried. 4. The respondent No.5 had asked petitioner to make application before jurisdictional assessing officer citing provisions of Section 132B of the Act on 11.12.2020. 5. On 17.02.2021, the petitioner therefore, filed the writ petition before the Allahabad High Court challenging the legality and validity of the search and seizure operation conducted in case of petitioner and also sought for release of the said gold ornaments in view of the proviso to Section 132(1)(iii) of the Act. Allahabad High Court after hearing the matter on 23.2.2021, permitted the petitioner to move a proper application before the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 over one year later, could not be countenanced by the following findings and observations :- "6. As per Section 1 of Section 132B of the Act, thus, the assets seized under Section 132 or requisitioned under Section 132A has to be dealt with in the manner provided in Clauses (i) to (iii) thereof. Principally, under Clause (i), it is provided that the amount of any existing liability under the Income Tax Act or the related fiscal statutes and the liability determined on completion of assessment under Section 153A and the assessment of the year relevant to the previous year, in which, search is initiated or requisition is made, or the amount of liability determined including the penalty and interest would be recovered out of such assets. Provisio to Clause (i) of Section 1 of Section 132B, however, provides that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month, in which, the asset was seized, for release of the asset and the nature and source of acquisition of any such assets is explained to the satisfaction of the Assessing Officer, the amount of existing liability referred to in the said clause may be recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the existing liability or even when not satisfied about the source of acquisition of the asset to refuse to release the same till the further liabilities which may arise upon completion of the assessment under Section 153A of the Act or the assessment of the year relevant to the previous year, in which, the asset was seized etc. are completed. To this extent, we fully accept the stand of the counsel for the revenue that the further proviso would have to be read in continuation of the first proviso and therefore would not override the provision of the first proviso which requires the Assessing Officer to release the asset only upon being satisfied with the source of its acquisition. However, this further proviso puts a time limit, within which, such asset must be released. The question of not releasing the asset would arise only upon the decision on an application that may have been made by the person concerned is taken by the Assessing Officer. If no decision is taken, necessarily, the option of the Assessing Officer to adjust such seized asset would be confined to the existing liabilities. It is, in this context, in our opinion, the legislature required the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for search under Section-132 or for requisition under Section- 132A, as the case may be, was executed. 19. Considering the above provisions, the petitioner made an application within the permissible time limit. Despite the fact that the period of 120 days was over, the assets were not released. The petitioner thereafter sent reminder and still no action was taken on behalf of the respondent. The petitioner, therefore, approached this Court by way of writ petition. During the pendency of this petition, the petitioner's application was rejected and since the order was passed by the respondent giving fresh cause of action the earlier petition was allowed to be withdrawn with a liberty to file fresh petition. The action of the respondent authorities is highly objectionable in view of the fact that in earlier petition, after issuance of notice time was sought for to file the reply affidavit. However, this time was utilized for the purpose of passing the order so as to make the earlier petition as infructuous one. In the affidavit-in-reply the respondents have come out with the stand that a detailed note was prepared by the Assistant Director of Investigation whereby the the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books and documents of the assessee, which were seized during search and seizure operation, were retained beyond a period of 180 days without communicating the reasons recorded by the Assessing Officer for such purpose. The Court held that, continued retention of the books and accounts and seized documents would, therefore, be illegal and invalid. It was observed as under: "In the present case, the account books/documents were seized in November/December,1984. Admittedly, after the expiry of the period of 180 days, the documents have been retained by the revenue authorities without communicating the reasons stated by the authorized officer and the approval of the Commissioner. To date, no such intimation has been given to the assessee and, therefore, in view of the ratio of the above decision, there can be no doubt that the extended retention of the account books/documents is wholly illegal and unlawful. We are, therefore, of the opinion that the grievance made by the assessee is well founded." 11. It can thus be seen that the Courts attach considerable importance to the time frame provided under Sections 132A and 132B of the Act when it comes to a question of retention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinite period without deciding the application of the person concerned who may be legitimately in a position to explain the source of the asset so seized. 25 In the aforesaid context, we may quote few relevant observations from the judgement in the case of Nadim Dilipbhai Panjvani (supra): "6. As per Section 1 of Section 132B of the Act, thus, the assets seized under Section 132 or requisitioned under Section 132A has to be dealt with in the manner provided in Clauses (i) to (iii) thereof. Principally, under Clause (i), it is provided that the amount of any existing liability under the Income Tax Act or the related fiscal statutes and the liability determined on completion of assessment under Section 153A and the assessment of the year relevant to the previous year, in which, search is initiated or requisition is made, or the amount of liability determined including the penalty and interest would be recovered out of such assets. Provisio to Clause (i) of Section 1 of Section 132B, however, provides that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month, in which, the asset was seized, for release of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed time. Of course when this further proviso refers to any portion of the asset, as is referred to in the first proviso, it necessarily permits the Assessing Officer to apply the assets against the existing liability or even when not satisfied about the source of acquisition of the asset to refuse to release the same till the further liabilities which may arise upon completion of the assessment under Section 153A of the Act or the assessment of the year relevant to the previous year, in which, the asset was seized etc. are completed. To this extent, we fully accept the stand of the counsel for the revenue that the further proviso would have to be read in continuation of the first proviso and therefore would not override the provision of the first proviso which requires the Assessing Officer to release the asset only upon being satisfied with the source of its acquisition. However, this further proviso puts a time limit, within which, such asset must be released. The question of not releasing the asset would arise only upon the decision on an application that may have been made by the person concerned is taken by the Assessing Officer. If no decision is taken, necessaril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tody the assets were seized. The second proviso to this Section makes it clear that the assets are required to be released within a period of 120 days from the date on which the last of the authorization for search under Section-132 or for requisition under Section- 132A, as the case may be, was executed. 19. Considering the above provisions, the petitioner made an application within the permissible time limit. Despite the fact that the period of 120 days was over, the assets were not released. The petitioner thereafter sent reminder and still no action was taken on behalf of the respondent. The petitioner, therefore, approached this Court by way of writ petition. During the pendency of this petition, the petitioner's application was rejected and since the order was passed by the respondent giving fresh cause of action the earlier petition was allowed to be withdrawn with a liberty to file fresh petition.The action of the respondent authorities is highly objectionable in view of the fact that in earlier petition, after issuance of notice time was sought for to file the reply affidavit. However, this time was utilized for the purpose of passing the order so as to make the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 10. We may also refer to the decision of Division Bench of this Court in case of Cowasjee Nusserwanji Dinshaw vs. Income Tax Officer reported in 165 ITR page 702, in which, the Court found that the books and documents of the assessee, which were seized during search and seizure operation, were retained beyond a period of 180 days without communicating the reasons recorded by the Assessing Officer for such purpose. The Court held that, continued retention of the books and accounts and seized documents would, therefore, be illegal and invalid. It was observed as under: "In the present case, the account books/documents were seized in November/December,1984. Admittedly, after the expiry of the period of 180 days, the documents have been retained by the revenue authorities without communicating the reasons stated by the authorized officer and the approval of the Commissioner. To date, no such intimation has been given to the assessee and, therefore, in view of the ratio of the above decision, there can be no doubt that the extended retention of the account books/documents is wholly illegal and unlawful. We are, therefore, of the opinion that the grievance made by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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