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TMI Blog2024 (10) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... e second proviso would not come into play. The first proviso does not give any time line and the second proviso is applicable only when there is an assessment by the AO. As far as factual aspects of the case are concerned, it is not disputed that the seizure was made on 21.09.2023 and an application for release of the cash seized from the lockers of the petitioners was made on 09.10.2023 and 06.11.2023, which have not been decided by the respondent. Thereafter, prior to the seizure by the respondent, the petitioners vide letters dated 17.01.2023 23.08.2023 had disclosed that their bank lockers were having cash to the tune of around Rs. 37 lac. We are of the considered view that second proviso to Section 132B would apply only after the AOhas determined the liability and has come to the conclusion that the nature and source of acquisiton has been explained by the person concerned. In the present case, since the AO has not decided the application, the second proviso to Section 132B would not come into play.The second proviso is mandatory, however, this will come into play only when the AO has determined the liability. The purpose behind the proviso was that after determination of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the first proviso, it is mentioned 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 asset and the nature and source of acquisition of any such asset is explained to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the [Principal Chief Commissioner or] Chief Commissioner or [Principal Chief Commissioner or] Commissioner, to the person from whose custody the assets were seized. It is contended that the second proviso is mandatory in nature as the same provides that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days form the date on which the last of the authorizations for search under Section 132 or for requisition under Section 132A, as the case may be, was executed. It is argued that since there is a mandate provided under second proviso to Section 132B of the Act, the cash should have been rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in thirty days from the end of the month in which the asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained] to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the [Principal Chief Commissioner or] Chief Commissioner or [Principal Chief Commissioner or] Commissioner, to the person from whose custody the assets were seized: Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132-A, as the case may be, was executed; (4)(a) The Central Government shall pay simple interest at the rate of [one half per cent for every month or part of a month] on the amount by which the aggregate amount of money seized under section 132 or requisitioned under section 132-A, as reduced by the amount of money, if any, released under the first provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, prior to the seizure by the respondent, the petitioners vide letters dated 17.01.2023 23.08.2023 had disclosed that their bank lockers were having cash to the tune of around Rs. 37 lac. 11. As to whether the second proviso to Section 132B of the Act should be considered to be mandatory and whether the assets seized have to be released after the expiry of 120 days, came up for consideration before the Division Bench of this Court in Harish Forex Services Pvt. Ltd. (supra) and the Division Bench held that the provision is mandatory and the assets have to be released after the expiry of 120 days. Similar controversy arose before the Division Bench of Allahabad High Court in Dipak Kumar Agrawal (supra) and the Allahabad High Court held that the second proviso to Section 132B is not mandatory as in absence of statutory intent shown to exist, it may not be inferred through the process of legal reasoning-that if no order is passed within a period of 120 days, seized assets must be released notwithstanding its impact on the recovery of existing and likely demands. Division Bench of Allahabad High Court has dealt with the judgments given by Gujarat High Court and has not subscr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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