Octal Sales Private Limited V. Income Tax department through Director General of Income Tax (Investigation) and Additional Director of Income Tax (Investigation), Ranchi and Assistant Director of Income Tax (Investigation) Dhanbad and Deputy Director of Income Tax (Investigation) and Principal Commissioner of Income \\u2013 tax, Dhanbad and State of Jharkhand through the Director General of Police, Jharkhand and Superintendent of Police, Dhanbad and Officer \\u2013 in \\u2013 charge, Barwadda Police Station

WPC/3868/2020

AI Insights

The case involves Octal Sales Private Limited, which sought the return of Rs.91,35,000 seized by the Income Tax Department during a vehicle check in Dhanbad, alleging the money was for misuse during the Bihar Assembly Election 2020. The petitioner argued the seizure was illegal and without jurisdiction, challenging the authority under Section 132A of the Income Tax Act, 1961. The Income Tax Department contended the seizure was lawful, supported by a warrant of authorization and subsequent assessment proceedings. The court did not address the legality of the seizure directly but ordered the assessment proceedings to determine the rightful owner of the seized money and its tax status.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 818779 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 25-02-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAHUL LAMBA; DARSHANA MISHRA
• Assessee Lawyers: INDRAJIT SINHA; KUMAR VAIBHAV
• Keywords: Assessment proceedings; Illegal seizure; Income Tax; Jurisdiction; Requisitioning; Seizure
• Section: 153A; 133(6); 133A; 132A; 131(1A); 153 C; 132(9A); 112D

Judgement Text

"IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 3868 of 2020 Octal Sales Private Limited through its authorized representative Gourav Bajaj, aged about 28 years, son of Sajan Kumar Bajaj, having its registered office at 145 Rash Behari Avenue, Gariahat, P.O. and P.S. Gariahat, District Kolkata, West Bengal --- --- Petitioner Versus 1. Income Tax department through Director General of Income Tax (Investigation), having his office at office of the DGIT (INV) Bihar & Jharkhand, 3rd floor, C.R. Building, B.C. Patel Marg, P.O. GPO, P.S. Kotwali, District Patna, Bihar. 2. Additional Director of Income Tax (Investigation), Ranchi having his office at Central Revenue Building, 5A, M.G. Road, P.O. GPO. P.S. Lower Bazar, District Ranchi. 3. Assistant Director of Income Tax (Investigation) Dhanbad, having his office at Aaykar Bhawan, Luby Circular Road, P.O., P.S., and District Dhanbad 4. Deputy Director of Income Tax (Investigation), having his office at Aaykar Bhawan, Luby Circular Road, P.O., P.S. and District Dhanbad 5. Principal Commissioner of Income – tax, Dhanbad, having its office at Aaykar Bhawan, Luby Circular Road, P.O., P.S. and District Dhanbad 6. State of Jharkhand through the Director General of Police, Jharkhand, having his office at Police Headquarters, Dhurwa, P.O. Dhurwa, P.S. Jagannathpur, District Ranchi 7. Superintendent of Police, Dhanbad, having his office at P.O., P.S. and District Dhanbad 8. Officer – in – charge, Barwadda Police Station, having his office at Barwadda Thana, P.O. and P.S. Barwadda, District Dhanbad --- --- Respondents --- CORAM: Hon’ble Mr. Justice Aparesh Kumar Singh Hon’ble Mrs. Justice Anubha Rawat Choudhary Through : Video Conferencing --- For the Petitioner : Mr. Indrajit Sinha, Advocate Mr. Kumar Vaibhav, Advocate For the Resp.-Income Tax Deptt. : Mr. Rahul Lamba, Advocate For the Resp.-State : Mrs. Darshana Poddar Mishra, A.A.G - I --- 07/25.02.2021 Heard learned counsel for the parties. 2. Petitioner is a company assessed to income tax under jurisdictional income tax authority at Kolkata. He has approached this Court, inter alia, seeking return of an amount of Rs.91,35,000/- purportedly seized by the income tax authorities. Petitioner has questioned under what authority of law the purported seizure/requisitioning of the amount belonging to the petitioner has been made. Petitioner seeks quashing of the entire requisitioning proceedings initiated by the respondent – income tax authority and for that 2 purpose, to call for the entire records pertaining to the purported seizure/requisition. According to the petitioner the seizure / requisition of the aforesaid amount is wholly illegal, arbitrary and without jurisdiction de hors the provisions of Section 132A of the Income Tax Act, 1961 read with Rule 112D of the Income Tax Rules, 1962 (hereinafter referred to as the Act and Rules). 3. Affidavits have been exchanged between the parties. The facts borne out from the record show that the seizure of Rs.91,35,000/- was made from one Sanjay Agarwal who said that the cash was given to him by Mr. Sashi Kant Jha at Gaya. Petitioner in his statement under Section 131 Sub-section 1A of the Act claimed that Shashi Kant Jha is his temporary employee. The seizure was made on 29.09.2020 from a vehicle Mahindra Morazzo bearing no.WB 02 AN 9153 travelling through Dhanbad on GT road near Barwadda, Dhanbad. 4. As per the respondent department, there was a tip-off that this money is being carried for misuse during Bihar Assembly Election 2020. Petitioner claims that this money belongs to the company who operates a crusher at Gaya. Respondent department has referred to the warrant of authorization under Section 132A of the Income Tax Act, 1961 issued on 1st October, 2020. Department has issued notices under Section 133 (6) of the Income Tax Act, 1961, whereupon petitioner stated that it received advances from customers/23 parties to the tune of Rs.4,24,42,815/-. To verify its genuineness, survey under Section 133 A of the Income Tax Act, 1961 was carried out on 29th October, 2020 in the business premises of 8 parties amongst whom 4 did not appear or their premises were found to be closed/non-existent. In terms of Section 132 (9A) of the Act the assessment proceedings have been handed over to the Assessing Officer at Kolkata. 5. Learned counsel for the respondent department submits on instruction that the Assessing Officer is in the process of issuing notices for assessment proceedings upon the petitioner under Section 153-C of the Act and upon the other two persons namely Mr. Sanjay Agarwal and Mr. Sashi Kant Jha under Section 153A of the Act. As per his instruction, the assessment proceedings would be concluded in an expeditious manner within a time-frame and/or as may be directed by this Court. Petitioner’s claim for return of the money has been resisted by the department challenging his locus standi at this stage in a writ proceeding. On conclusion of the assessment proceedings if the department is satisfied about source and genuineness of the amount seized and that money forms part of his taxable income assessed to tax and that tax has 3 been paid thereupon, the same would be refunded to the concerned person upon conclusion of the proceedings as per the provisions of the Chapter XIX of the Income Tax Act, 1961. 6. Learned A.A.G. I appearing for the State has submitted on instructions that no F.I.R. was instituted in connection with the seizure carried out by the police on instructions of the Income Tax Department. Learned counsel for the petitioner contends that the seizure is illegal. Since petitioner is claiming the amount and non-refund thereof is preventing the petitioner from using their money for the purposes of its business, the same ought to be returned to the petitioner, moreover no other person is claiming that money. 7. We have considered the submission of learned counsel for the parties in the aforesaid facts and circumstances borne from record. A seizure of cash totaling Rs.91,35,000/- has been made from one Sanjay Agarwal, who is not before us, while travelling in a vehicle through Dhanbad district by the police in respect of which the Income Tax Department has issued a warrant of authorization under Section 132A of the Act. Petitioner claims that the cash amount belongs to him. Neither Mr. Sanjay Agarwal nor Mr. Sashi Kant Jha are before us. A liquid cash whether it belongs to A or B or C cannot be determined in this proceeding. Assessment proceedings have been opened before the jurisdictional Assessing Officer of the petitioner at Kolkata in respect of the seized money. The proceedings would lead to a conclusion as to whether petitioner or any other person is its rightful claimant. This Court in writ jurisdiction is not in a position to determine a question of fact as to whom does the money belong to lawfully. Learned counsel for the respondent department has on instructions fairly stated that assessment proceedings would be concluded within a time-frame and if the assessment proceedings leads to a finding that the amount in question falls within the taxable income of a concerned person/assessee and the tax thereupon stands paid or partly paid, the admissible amount or part of it could be refunded to the person / assessee concerned. This Court is of the opinion that the stand of the respondent department is fair. In those circumstances, the assessment proceedings initiated by the jurisdictional Assessing Officer at Kolkata be concluded within a time-frame of preferably 3 (three) months. Petitioner and any other person including Mr. Sanjay Agarwal and Mr. Sashi Kant Jha should appear and cooperate in the proceedings. Let this petitioner and others be noticed to appear on 10th of March, 2021 before the jurisdictional Assessing Officer at Kolkata. 4 8. Needless to say, on conclusion of the assessment proceedings against the respective persons and the petitioner herein, in case the Assessing Officer finds that the amount in question has rightly been claimed by the petitioner or any other person, and that the income tax or part of the tax have already been paid, and that refund is admissible as the case may be, the same be refunded to the concerned person in accordance with law and as per the provisions of Chapter XIX of the Act without any delay thereafter, with statutory interest, if any. 9. Writ petition is disposed of with the aforesaid observations and directions. The issue of legality of seizure is left open since this Court is not required to answer the same in the present writ proceedings initiated at the behest of the petitioner. (Aparesh Kumar Singh, J.) (Anubha Rawat Choudhary, J.) Saurav/Pankaj "