The Delhi High Court has held that if the time period for framing an assessment under Section 153A of the Income Tax Act has expired, and there is no outstanding demand, the Income Tax Authorities would have no justification in retaining the seized cash.
The bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that in terms of Section 153B(1)(a) of the Income Tax Act, the assessment under Section 153A of the Income Tax Act is required to be completed within a period of twenty-one months from the end of the financial year in which the requisition under Section 132A of the Income Tax Act was executed.
The petitioner/assessee has filed the writ petition seeking directions to Superintendent of Police, Central Bureau of Investigation (CBI) to handover an amount of ₹98,00,000 which was seized from the petitioner on 20.10.2012.
The petitioner has challenged the order passed under Section 132A of the Income Tax Act, 1961 and further proceedings pursuant to the requisition.
The petitioner contended that the requisition was inordinately delayed as the Income Tax Department was fully aware of the seizure of the cash in the year 2012. He contended that the department was informed regarding seizure of the cash on 02.01.2013 and therefore could not form a basis.
The assessee contended that the investigation had been completed and no charge sheet had been filed against the petitioner. The petitioner had also explained the source of the seized cash and therefore, there was no reason to issue the impugned requisition under Section 132A of the Income Tax Act.
The issue raised was whether the Income Tax Authorities can continue to retain the cash after more than twelve years have expired since the same was seized.
The court noted that the Income Tax Department issued notice dated 08.10.2018 under Section 153A of the Act calling upon the petitioner to file his correct return of income for the AYs 2011- 12 to 2016-17. Section 153A(1) of the Income Tax Act posits that where a search is initiated under Section 132 of the Act or books of accounts, other documents or any assets are requisitioned under Section 132A of the Income Tax Act, the AO shall issue a notice to such a person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b) of Section 153A(1) of the Income Tax Act.
The court directed that if no demand has been crystalized against the petitioner as yet, the seized cash be returned to the petitioner within a period of four weeks from date.
Case Details
Case Title: Gautam Thadani Versus Director Income Tax (Investigation) And Anr.
Case No.: W.P.(C) 10960/2016 CM APPL. 42872/2016 CM APPL. 47923/2018 CM APPL. 35408/2023
Date: 10.01.2025
Counsel For Petitioner: Ved Jain
Counsel For Respondent: Indruj Singh Rai
