UNION OF INDIA and ORS V. INCOME TAX SETTLEMENTS COMMISS

SAW/1084/2007

AI Insights

The case involves two special appeals filed by the revenue against the orders of the Income Tax Settlement Commission, which had directed the release of seized jewellery to the respective assessees. The appeals challenged the Commission's decisions on the grounds that the releases were premature and not in accordance with the provisions of the Income-tax Act, particularly Section 132D, which allows for the release of seized assets only after a final order is passed. The respondents argued that the Commission possessed all necessary powers under the Act to make such orders. The court decided not to examine the merits of the case but directed the Commission to expedite the final decision on the underlying tax disputes.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 751041 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 03-03-2008
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: GUNJAN PATHAK
• Assessee Lawyers: ANUROOP SINGHI
• Keywords: Income disclosure; Income tax settlement commission; Tax liability; Seized ornaments; Jewellery release
• Section: 245D(4); 132B; 132D; 245F(1)

Judgement Text

"DBSAW NO.640/07. DBSAW NO.1084/07. 1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR. J U D G M E N T D.B. CIVIL SPECIAL APPEAL (WRIT) NO.640/2007. IN S.B. CIVIL WRIT PETITION NO.7007/2006. Commissioner of Income Tax-Central Vs. Upendra Kumar Soni D.B. CIVIL SPECIAL APPEAL (WRIT) NO.1084/2007. IN S.B. CIVIL WRIT PETITION NO.7018/2006. Union of India and anr. Vs. Income Tax Settlement Commission and anr. Date of Judgment:- March 3, 2008. QUORUM HON'BLE THE CHIEF JUSTICE SHRI NARAYAN ROY HON'BLE SHRI JUSTICE MOHAMMAD RAFIQ Shri Anuroop Singhi for the appellants. Shri Gunjan Pathak for the respondent. ***** BY THE COURT:- Heard learned counsel for the appellant and also the learned counsel for the respondent. 2) These two appeals are directed against the judgment passed by the learned Single Judge whereby the writ petitions filed by the appellants-revenue were dismissed and the orders passed by the Income- tax Settlement Commission directing release of the seized ornaments/jewellery to the respective assessees were upheld. DBSAW NO.640/07. DBSAW NO.1084/07. 2 3) In the first case, such order was passed by the Settlement Commission on 13/12/2005 in a matter arising out of the proceedings under Section 245 D(4) of the Income-tax Act, 1961. 4) The contention of Shri Anuroop Singhi, learned counsel for the revenue is that in the first case, even the the estimated disclosed income according to the appellant was Rs.92 lacs, whereas the respondent-assessee admitted the income of only Rs.12 lacs and, therefore, at the premature stage, jewellery/ornaments could not be ordered to be released. 5) In the second case also, a similar argument has been made that as against the admitted tax liability of Rs.20 lacs, out of stock having value of Rs.44 lacs, release of jewellery to the extent of Rs.20 could not have been made by the Settlement Commission pending final order in the proceedings under Section 245D(4). 6) Learned counsel for the revenue argued that according to Section 132D of the Act of 1961, such an order could be made only when the final order is passed so as to enable the department to adjust the demand against such assets. 7) On the other hand, Shri Gunjan Pathak, learned counsel for the respondent-assess opposed the writ petition and has argued that the Settlement Commission wields all such powers which are DBSAW NO.640/07. DBSAW NO.1084/07. 3 exersicable by any of the income-tax authorities. Reference in this connection is made to Section 245F of the Act of 1961 and more particularly, its sub- Section (1) and it is argued that in addition to the powers conferred on the Settlement Commission under Chapter XIXA of the Act, the Commission shall have all the powers which are vested in any of the income-tax authorities under the said Act. Learned counsel argued that when by virtue of Section 132B of the Act, an assessing authority can within 30 days from the end of the month in which the assets are seized, can direct release thereof, the argument that Settlement Commission would have no such powers is not tenable. 8) At this stage, learned counsel for the appellant-revenue submitted that this Court may not examine the matter on merits and rather direct the Settlement Commission to decide the main matter under Section 245D(4) of the Act of 1961 within a time bound manner. Learned counsel for the respondent-assessee also does not object to any such direction. 9) Without therefore interfering with the impugned-orders, we deem it appropriate to direct the Income Tax Settlement Commission to conclude the proceedings under Section 245B of the Act of 1961 finally and decide the same within three moths from the date certified copy of this order is produced DBSAW NO.640/07. DBSAW NO.1084/07. 4 before it. These special appeals are accordingly disposed of. (MOHAMMAD RAFIQ), J. (NARAYAN ROY), CJ. anil "