Sinkaram Muthuswamy Chettiar V. The Assistant Commissioner of Income Tax, Central Circle-2, Ernakulam and The Commissioner of Income-Tax (Central), Cochin and The Commissioner of Income Tax (Appeals)-II, Kerabhavan, Ernakulam

WP(C)/31822/2013

AI Insights

The petitioner, Sinkaram Muthuswamy Chettiar, approached the High Court of Kerala seeking the return of surplus cash and jewellery seized during income tax searches, and challenging the assessment orders issued by the Income Tax Department. The petitioner argued that despite the adjustments for tax liabilities, a significant amount of cash and jewellery remained with the department. The respondents contended that the demands had been adjusted and further proceedings, including penalties, were pending. The court decided not to directly address the return of the seized assets but instead directed the appellate authority to expedite the review of the petitioner's appeals against the assessments.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 690441 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 13-03-2014
• Assessment Year: misc
• Other Referred Cases: Sree Balaji Refinery Vs. Deputy Commissioner of Income Tax [2012 (2) KLT 196]
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: K M V PANDALAI; S H HEMALATHA
• Keywords: Appeal; Assessment proceedings; Income Tax; Search and seizure; Writ of Certiorari; Writ of Mandamus
• Section: 143(3); 271(1)(c); 153A; 275(a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 13TH DAY OF MARCH 2014/22ND PHALGUNA, 1935 WP(C).No. 31822 of 2013 (C) ---------------------------- PETITIONER(S): -------------------------- SINKARAM MUTHUSWAMY CHETTIAR, 43/896, ARUN NIVAS, AYYAPPANKAVU, KOCHI-682 018. BY ADVS.SRI.KMV.PANDALAI, SMT.S.HEMALATHA. RESPONDENT(S): ---------------------------- 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, ERNAKULAM, CHITTOOR ROAD, KOCHI-682 011. 2. THE COMMISSIONER OF INCOME-TAX (CENTRAL), COCHIN, M.G. ROAD, KOCHI-682 011. * ADDL. R3 IMPLEADED 3. THE COMMISSIONER OF INCOME TAX (APPEALS)-II, KERABHAVAN, ERNAKULAM, KOCHI-682 016. * IS IMPLEADED AS PER ORDER DATED 13/03/2014 IN I.A. NO.3861/2014. BY SRI.P.K.R.MENON, SENIOR SC, ADV. SRI.JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. WP(C).No. 31822 of 2013 (C) APPENDIX PETITIONER'S EXHIBITS:- P1: COPY OF PANCHANAMA CHN-10-10SV-E DATED 05/08/2010. P1(A): PANCHANAMA CHN-10-10-SC/D DATED 05/08/2010. P1(B): PANCHANAMA VKP/CHN/ 10-2010/CS DATED 05/08/2010. P2: COPY OF INVENTORY OF JEWELLERY NO.CHN-10-10-SV/A DATED 05.08.2010. P3: COPY OF THE LETTER DATED 26.08.2013 SENT BY THE PETITIONER TO THE 1ST RESPONDENT. P4: COPY OF THE LETTER DATED 04.10.2013 ISSUED BY THE 1ST RESPONDENT. P5: COPY OF THE LETTER DATED 08.10.2013 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. P6. COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-II, ERNAKULAM FOR THE ASSESSMENT YEAR 2005-06. P6A. COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-II, ERNAKULAM FOR THE ASSESSMENT YEAR 2006-07. P6B COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-II, ERNAKULAM FOR THE ASSESSMENT YEAR 2007-08. P6C COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-II, ERNAKULAM FOR THE ASSESSMENT YEAR 2008-09. P6D COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-II, ERNAKULAM FOR THE ASSESSMENT YEAR 2009-10. P6E COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-II, ERNAKULAM FOR THE ASSESSMENT YEAR 2010-11. RESPONDENT'S EXHIBITS:- EXT.R1A COPY OF THE LETTER DATED 21/10/2013. //TRUE COPY// P.A. TO JUDGE rs. P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~ W.P.(C) No. 31822 of 2013 ~~~~~~~~~~~~~~~~~~~~~ Dated, this the 13th day of March, 2014 JUDGMENT The petitioner has approached this Court with the following prayers : “a. Call for the records leading to the issue of Exhibit P4 and to quash the same by issue of a writ of certiorari. b. Issue a writ of mandamus directing the respondents to return the surplus cash and jewellery to the petitioner forthwith with interest; c. Issue any other writ/order or direction as this Hon'ble Court may deem fit and proper in the circumstances of the case. 2. The case of the petitioner is that pursuant to the search conducted by the Income Tax Department on 05.08.2010 and 06.08.2010, in the residential and official premises of the petitioner, who is stated as a lottery agent, a sum of Rs. 69,82,730/- was seized as per Ext. P1 and 1920.55 gms of jewellery was seized as per Ext. P2; besides seized a sum of Rs.3,15,23,579/- deposited in different banks. The assessment proceedings were finalized under Section W.P.(C) No. 31822 of 2013 : 2 : 143 (3) r/w s. 153A for the assessment years 2005-06, 2006 - '07, 2007 - '08, 2008 - '09, 2009 - '10, 2010 - 11 and 2011 - '12. It is stated that the petitioner has preferred statutory appeal before the appellate authority, which is stated as pending. The case of the petitioner is that, even after adjusting the maximum liability that can be mulcted upon the shoulders of the petitioner, huge amounts are still lying at the hands of the department, to an extent of more than Rs. 1 Crore, which is sought to be returned along with jewellery. Since the claim mooted by the petitioner vide Ext. P5 has not been favourably considered, the petitioner is before this Court. 3. A detailed statement has been filed on behalf of the respondents, pointing out the facts and figures. Paragraphs 6 and 7 of which read as follows : “6. As on date, the existing demand of Rs. 2,84,18,674/- has been adjusted. The last of the demand adjusted is on 23.01.2914 of Rs. 1,88,79,309/- i.e. a few years back. However, it may be noted that though the penalty proceedings were initiated u/s 271 (1) (c) of the Income Tax Act 1961, the same had to be kept in abeyance as the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) against the Assessment Order passed by the assessing W.P.(C) No. 31822 of 2013 : 3 : officer. The matter is kept under abeyance as per Section 275 (a) of Income Tax Act 1961. It not for this, even the penalty proceeding also would have been completed and a final demand payable crystalised 7. With reference to paragraph 8, it is submitted that as stated in reply to para 3 above, the seized cash in the hands of the assessee is Rs. 3,58,58,498/- and amount of demand adjusted as stated in reply to para 6 above is Rs. 2,84,18,674/-. Thus excess cash now available with the department is only Rs. 74,39,824/- on account of seized cash in the hands of the assessee, apart from the seized gold of 1920.55 grams in the custody of the department. It is to be noted that, there is still an outstanding demand of Rs. 1,23,03,650/-, after adjusted of cash seizedin his hands, pending payable in the hands of the assessee's son Sri. Anoop Kumar S. As on date, there are no assets of son Anoop Kumar S as a security against the demand pending. The wife of the assesseee, Smt. K. Kumari and his another son Sri. Arun Kumar in whose cases also assessments were completed and cash seized, has given consent for adjustment of their excess cash still available with the department after adjustment of their respective tax liability. Even if this adjustment is carried out, there would still a demand of Rs. 66,77,671/- pending in the hands of Sri. W.P.(C) No. 31822 of 2013 : 4 : Anoop Kumar S, the son of the assessee.” The learned standing counsel for the respondent also brought it to the notice of this Court that the claim of the petitioner to return the amount and jewellery is not correct, more so in view of the decision rendered by this Court in Sree Balaji Refinery Vs. Deputy Commissioner of Income Tax [2012 (2) KLT 196]. 4. The petitioner has sought to file a reply affidavit as well. In the course of further proceedings, the petitioner sought to implead the Commissioner of Income Tax (Appeals) - II by filing I.A. No. 3861 of 2013, producing copy of the relevant appeals filed as Ext. P6 series (along with I.A. No. 3860 of 2014). Both the I.As stand allowed by way of separate order passed today. The learned counsel for the petitioner submits that the petitioner will be satisfied, if a direction is given to the addl. 3rd respondent to consider and pass appropriate orders Ext. P6 series appeal. 5. After hearing the learned counsel for the petitioner as well the learned standing counsel for the respondents, the writ petition is disposed of, directing the addl. 3rd respondent to consider and pass appropriate orders of Ext. P6 series appeals, in accordance with law, after giving an opportunity of hearing to the petitioner, as expeditiously as possible. Return of the balance cash, if any, and W.P.(C) No. 31822 of 2013 : 5 : jewellery and satisfaction of further amount if any from the part of the petitioner will depend upon the outcome of the orders to be passed on Ext. P6 series appeal. Petitioner shall produce a copy of this judgment along with copy of the writ petition and relevant I.As. before the addl. 3rd respondent for further steps. Sd/- P. R. RAMACHANDRA MENON, (JUDGE) kmd "