RAJEEV ARORA V. UNION OF INDIA AND ORS

CWP/9714/2012

AI Insights

The case revolves around the seizure of cash, cheques, and drafts amounting to \\u20b912,80,000 from Rajeev Arora by the Income Tax Department at Srinagar Airport on February 26, 2010. The petitioner, a businessman and income tax assessee, was in Srinagar for business purposes when the seizure occurred. Despite multiple communications with the Income Tax Department, the seized items were not returned, prompting the filing of this writ petition under Articles 226/227 of the Constitution of India. The court examined the legality of the seizure and the subsequent retention of the items, ultimately ruling in favor of the petitioner.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 743340 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 14-09-2012
• Assessment Year: misc
• Laws Referred To: Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAJESH SETHI
• Assessee Lawyers: AVNEESH JHINGAN
• Keywords: Income Tax Department; Legal liability; Release of seized assets; Seizure of cash; Accounted cash
• Section: 131; 226; 227

Judgement Text

"CWP No.9714 of 2012 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.9714 of 2012 Date of decision: 14.09.2012 Rajeev Arora ---Petitioner Vs. Union of India and others ----Respondents CORAM:- HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE GURMEET SINGH SANDHAWALIA Present:- Mr. Avneesh Jhingan, Advocate for the petitioner. Mr. Rajesh Sethi, Advocate for the respondents. Ajay Kumar Mittal,J. 1. Prayer in this petition filed under Articles 226/227 of the Constitution of India is for release of cash amount of ` 12,80,000/- with interest and the cheques which have been seized by the respondent Income tax Department from the petitioner. 2. Briefly the facts as narrated in the petition may be noticed. The petitioner was partner in M/s Kapoor Enterprises, Amritsar during the year 2009-10 and is now a proprietor since 30.1.2012. The concern is engaged in the business of tea and is an income tax assessee. The returns are being duly filed and the tax deposited. The petitioner in routine had gone to Srinagar during the month of February 2010 for collection of payment and to get orders. Due to law and order situation prevailing there, the payment had to be collected in person. The payments were made through cheques, drafts CWP No.9714 of 2012 2 and also in cash. On 26.2.2010, during checking at the Airport at Srinagar, cash amounting to ` 12,80,000/-, some slip pads, ledger and cheques/bank drafts etc. were seized from the petitioner by the Income tax authorities. Since the firm of the petitioner was an assessee at Amritsar, respondent No.2 issued a notice under Section 131 of the Income Tax Act, 1961 (in short, “the Act”). Certain documents like books of account for financial year 2009-10 including cash book ledger etc. were demanded from the petitioner. In pursuance to the notice, the petitioner appeared and produced the required documents. After verification, the cash and cheques were not released to the petitioner. The petitioner approached Deputy Director of Income tax Investigation, Srinagar and respondent No.2 vide letter dated 30.8.2010, Annexure P.4 in this regard. Reminder dated 30.9.2010, Annexure P.5 was also sent to respondent No.2 as well as his counterpart at Srinagar. Thereafter, respondent No.2 sent a letter dated 16.11.2010, Annexure P.6 to the petitioner stating that since the cash was seized at Srinagar, the matter may be taken up with Deputy Director of Income Tax, Srinagar or Joint Director of Income Tax, Srinagar, Camp office at Amritsar. Inspite of various letters and reminders, the petitioner having received no response, he has filed the present writ petition. 3. Learned counsel for the petitioner submitted that the seized amount was accounted for in the books of account and there was no liability outstanding against the petitioner. The cash amount of ` 12,80,000/- seized by the respondent department had been illegally CWP No.9714 of 2012 3 retained in the absence of any valid demand against the petitioner. Prayer was, thus, made for return of the said amount alongwith interest. 4. Opposing the prayer made on behalf of the petitioner, learned counsel for the revenue submitted that the petitioner never made any application before the appropriate authority for return of the amount and thus, the same had not been returned. 5. We have heard learned counsel for the parties and perused the record. 6. In the written statement filed on behalf of respondents No.2 and 3, only technical plea in the nature that it is not for them to release the seized assets but the petitioner can approach the Assessing Officer for the same has been taken. The factum that no liability is outstanding against the petitioner and also that the seized amount of cash, cheques and drafts etc. were reflected in the books of account of the petitioner assessee has not been controverted. It has further not been disputed that the books of account and other relevant record was presented before respondent No.2 and that respondent No.3 exercises power over Assistant/Deputy Director of Income Tax (Investigation), Srinagar who had seized the cash, cheques, drafts etc. from the possession of the petitioner on 26.2.2010 at Srinagar Airport. 7. In the absence of any liability outstanding against the petitioner and that the seized cash, cheques, drafts etc. were not unexplained, the petitioner is entitled to the release of the same. 8. In view of the above, the writ petition is allowed. The CWP No.9714 of 2012 4 respondent – Income Tax Department shall release the cash alongwith the cheques, drafts etc. which had been seized by them from the possession of the petitioner on 26.2.2010 at Srinagar Airport. The petitioner shall also be entitled to interest @ one half percent for every month till the date of payment. The needful be done within two months from the date of receipt of certified copy of the order. (Ajay Kumar Mittal) Judge September 14, 2012 (Gurmeet Singh Sandhawalia) 'gs' Judge "