DABWALI RICE & COTTON MILLS, MANDI DABWALI HARYANA V. UNION OF INDIA, MINISTRY OF FINANCE & ORS.

CWP/1820/2012

AI Insights

Dabwali Rice and Cotton Mills challenged the seizure of Rs.30,00,000 by the Income Tax Department, arguing that the amount was part of a disclosed asset and thus improperly seized. The seizure was authorized under Section 132-A(1)(c) of the Income Tax Act, 1961, which allows for the seizure of assets not disclosed for tax purposes. The petitioner contended that the seizure was beyond the jurisdiction of the revenue authorities. The court found that the determination of whether the asset was disclosed is a factual issue that should be resolved by the Assessing Officer, and thus dismissed the petition.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 731883 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 14-01-2013
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax vs Vindhya Metal Corporation and others, (1997) 224 ITR 614
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RADHIKA SURI; TEJINDER JOSHI
• Assessee Lawyers: PANKAJ JAIN; D K GOYAL
• Keywords: Assessment proceedings; Asset Seizure; Income Tax; Jurisdiction; Disclosed Asset
• Section: 132(B); 132-A(1)(c)

Judgement Text

"CWP No. 1820 of 2012 1 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP No. 1820 of 2012 Date of decision : January 14, 2013 Dabwali Rice and Cotton Mills ............Petitioner Versus Union of India and others ...........Respondents CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present: Mr. Pankaj Jain, Advocate and Mr. D.K Goyal, Advocate for the petitioner. Ms. Radhika Suri, Addl.A.G, Punjab. Mr. Tejinder Joshi, Advocate for respondent no.4. HEMANT GUPTA, J (ORAL) The challenge in the present writ petition is to the notice (Annexure P-10) dated 6.1.2012, whereby a sum of Rs.30,00,000/- recovered from the petitioner on 4.1.2012 was authorised to be retained by the Commissioner of Income Tax on 5.1.2012 representing as an asset not disclosed for the purpose of the Income Tax Act. While retaining the said amount in the account of the Commissioner of Income Tax, liberty was given to the petitioner to take resort to the provisions of Section 132-B of the Income Tax Act within a period of 30 days from the end of the month of January 2012. Learned counsel for the petitioner has vehemently argued that the sum of Rs.30,00,000/- is part of the disclosed asset of the petitioner and, therefore, the said amount could not be seized by the revenue in terms of Section 132-A(1)(c) of the Income Tax Act, 1961. Learned counsel for the petitioner vehemently argued that seizure of the said amount is beyond the jurisdiction of the revenue. Section 132-A(1)(c), is source of power to seize the said amount. CWP No. 1820 of 2012 2 The provision reads as under: Sec 132-A (1) Where the [Director General or Director] or the [Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to believe that- (a) xxxx xxxx (b) xxxx xxxx (c): any assets represent either wholly or partly income or property which has not been, or would not have been disclosed for the purposes of the Indian Income Tax Act, 1922(11 of 1922) or this Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force, then, the Director General or Director of the Chief Commissioner or Commissioner may authorise any Additional Director, Additional Commissioner, Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer (hereafter in this Section and in sub-Section (2) of Section 278-D referred to as the requisitioning officer) to require the officer or authority referred to in clause (a) or clause (b) or clause (c) as the case may be, to deliver such books of account, other documents or assets to the requisitioning officer.” The aforesaid provision provides that any asset which has not been or would not have been disclosed for the purpose of the Act can be taken in possession by the requisitioning Officer. The Director of Income Tax, Investigation, Punjab as an authorised officer has requisitioned and deposited the said amount in the account of Commissioner of Income Tax, Ludhiana. Thus, such order is in terms of Section 132-A(1)(c) of the Act. The amount has been seized in the terms of the statutory provisions. The fact whether such asset has been disclosed for the purpose of the Act or not is a question of fact which is yet to be examined by the Assessing Officer. Therefore, we do not find any ground to entertain the present writ petition and direct the respondents to release the seized asset of the petitioner at this stage. The question whether the amount seized by the revenue is declared asses or not is a question of fact. Such question of fact can be determined by the Assessing Officer during the course of assessment proceedings only. CWP No. 1820 of 2012 3 Learned counsel for the petitioner has referred to the judgment of the Hon'ble Supreme Court reported in Commissioner of Income Tax vs Vindhya Metal Corporation and others, (1997) 224 ITR 614 to contend that the seized asset should be released in favour of the petitioner. However, we find that such judgment has no application to the facts of the present case. In the aforesaid case the amount of Rs.4,63,000/- was seized by the Income Tax Department believing it to be a stolen property. However, during the course of investigation, it was found that it was not a stolen property. Since in the aforesaid case, a finding of fact was recorded that the amount is not a stolen property, therefore, the amount was ordered to be released by the Allahabad High Court, which order was affirmed by the Hon'ble Supreme Court. But in the present case, the basic question whether the asset is a disclosed asset is yet to be examined by an authority under the Act. Therefore, no such direction as sought by the petitioner can be granted at this stage. We do not find any merit in the present petition. Consequently, the same is dismissed. ( HEMANT GUPTA ) JUDGE January 14, 2013 ( RITU BAHRI ) ritu/preeti JUDGE "