9911796707
TMI Blog1980 (4) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... pection. An order under s. 132(5) of the I.T. Act was passed by the ITO. Under the said order, the first respondent estimated the alleged concealed income at Rs. 45,06,574 and levied a tax of Rs. 43,61,474. Consequently, the order stated that all the assets that have been seized were being retained towards the tax as determined. The petitioner thereupon filed an appeal under s. 132(11) of the I.T. Act. While so, the Central Govt. promulgated on October 8, 1975, the Voluntary Disclosure of Income and Wealth Ordinance, 1975. The petitioner filed a declaration under s. 14 of the said Ordinance and disclosed a sum of Rs. 23,00,300 for the assessment years 1965-66 to 1974-75. In the said declaration, the petitioner included the value of the gold and gold ornaments weighing 10,395 grams and diamond jewellery weighing 66.9 cts. The Commissioner accepted the disclosure subject to payment of tax. The petitioner then requested the first respondent and the Commissioner (Central), Madras, to appropriate the cash seized from his premises towards the tax and sell the items of gold and gold ornaments and diamond jewellery seized from his premises and appropriate the sale proceeds thereof also tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibition would not lie against the first respondent. It is further stated that the petitioner will not be entitled to the immunity granted under s. 16 of the Voluntary Disclosure of Income and Wealth-tax Act, 1976, as he has not made a declaration as required by that section. Mr. U. N. R. Rao, the senior standing counsel for the Central Govt., raised a preliminary objection that a writ of prohibition will not lie against the first respondent. In this case, the ITO had seized gold, gold ornaments and diamond jewellery and had initiated proceedings under s. 132 of the I.T. Act. Further, the petitioner had made a declaration under the Voluntary Disclosure of Income and Wealth Ordinance, 1975. In the circumstances, the first respondent has, been acting in a quasi judicial capacity vis-a-vis the petitioner. The petitioner's case is that under the provisions of the I.T. Act, the first respondent having decided to retain the gold, gold ornaments and diamond jewellery and apply the sale proceeds thereof in adjustment of the tax liability of the petitioner, the latter will have no jurisdiction to hand over the items seized to the second respondent. In the circumstances, I do not find how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars of any article or ornament, or both, owned, possessed, held or controlled by him : Provided that no such declaration shall be required to be made where a person who, having owned, possessed, held or controlled any article or ornament before the commencement of this Act, has already made declaration in relation to that article, or ornament, or both: Provided further that nothing in this sub-section shall be construed as enabling any declaration to be made in respect of any gold for which the period prescribed or allowed under the law for the time being in force before the commencement of this Act had expired before such commencement. Section 16(5)(b) of the Gold (Control) Act states as follows: "No declaration referred to in sub-section (1) or sub-section (3) shall be required to be made . . ...... (b) in relation to any ornaments, or both articles and ornaments, where both articles and ornaments are owned, possessed, held or controlled unless the total weight of such ornaments or both articles and ornaments, as the case may be, owned, possessed, held or controlled by (i) an individual who is not a member of a family exceeds two thousand grammes, (ii) a fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice to the first respondent calling upon him to hand, over the gold, gold ornaments and diamond jewellery, the first respondent had already passed an order under s. 132(5) of the I.T. Act stating that the seized assets would be retained to meet the aggregate tax liabilities of the petitioner. The learned counsel also heavily leaned on the agreement arrived at between the petitioner and the first respondent under which the first respondent has been authorised to sell the seized assets and appropriate the sale proceeds towards the tax liabilities of the petitioner. Therefore, as on the date the second respondent made a demand on the first respondent for delivery of the seized assets to the former, the first respondent had become the owner of the assets. In the circumstances, the petitioner could not be said to be either the owner or the person in possession or control of the gold, gold ornaments and diamond jewellery. Since it is not disputed that as on 1st January, 1976, the petitioner owned gold, gold ornaments and diamond jewellery in excess of the permissible limits prescribed under s. 16(5) of the Gold (Control) Act, all these items of jewellery were liable to confiscation u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets. (ii) If the assets consist solely of money, or partly of money and partly of other assets, the Income-tax Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied. (iii) The assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged add for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Income-tax Officer under authorisation from the Commissioner under sub-section (5) of section 226 and the Income-tax Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule. (2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act. (3) Any assets or proceeds thereof which remain after the liabilities refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember, 1976, written by the petitioner to the ITO. The letter clearly states that the petitioner has agreed for the sale of the assets and for the appropriation of the sale proceeds towards tax due. The petitioner has further stated in the letter that the excess, if any, after adjustment of the tax liabilities has to be returned to him. I am, therefore, not persuaded to agree with the submission of Mr. Ramachandran that by reason of ss. 132(5) and 132B and by reason of the order passed by the first respondent under s. 132(5) of the I.T. Act, the property in the gold, gold ornaments and diamond jewellery had passed from the petitioner to the first respondent. The first respondent has only the power to sell the gold, gold ornaments and diamond jewellery and adjust the sale proceeds towards arrears of tax due from the petitioner. Till the sale takes place the ownership of the property will continue to remain in the hands of the petitioner but under distraint by the ITO. The Voluntary Disclosure of Income and Wealth Ordinance, 1975, was promulgated on October 8,1975. It is submitted that the petitioner only made a declaration under s. 14 of the said Ordinance disclosing an income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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