IT: Order passed for retaining entire amount seized, without giving opportunity of hearing to assessee is not sustainable
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[2013] 34 taxmann.com 73 (Punjab & Haryana)
HIGH COURT OF PUNJAB AND HARYANA
Chiranji Lal Moti Lal
v.
Income-tax Officer, Ward - 2, Sirsa*
A.K. SIKRI, CJ.
AND RAKESH KUMAR JAIN, J.
AND RAKESH KUMAR JAIN, J.
CIVIL WRIT PETITION NOS. 6283 & 6284 OF 1989 (O & M)
MARCH 1, 2013
Section 132 of the Income-tax Act, 1961, read with rule 112A of the Income-tax Rules, 1962 - Search and Seizure - General [Seizure] - Assessment year 1989-90 - Whether, where order was passed for retaining entire amount seized, without giving opportunity of hearing to assessee as per rule 112A(1) and section 132(5), order was liable to be quashed - Held, yes [Para 6] [In favour of assessee]
Harish Bhardwaj for the Petitioner. Tejinder Joshi for the Respondent.
ORDER
A.K. Sikri, CJ. - These writ petitions were filed way back in the year 1989 seeking quashing of orders passed by the income tax authorities under Section 132(7) read with Section 132(5) of the Income Tax Act, 1961. Since common question of law arises in both the writ petitions, the same are decided together. For facility of reference, facts are taken from CWP-6283 of 1989 wherein an amount of Rs.80,000/- was allowed to be retained by the income tax authorities under Section 132(7) of the Act.
2. As per the averments made in the petition, the petitioner, who is in the business of commission agent, at Kalanwali, District Sirsa had purchased 380 bags of wheat on account of M/s Jyoti Parshad Sham Lal, Delhi between 15.8.1988 and 19.8.1988. The petitioner had sent its partner Shri Bhushan Kumar to Delhi to collect the payment of Rs.80,000/- from M/s Jyoti Parshad Sham Lal against the aforesaid purchase. Shri Bhushan Kumar collected the said amount and also another amount of Rs.6,10,581/- from M/s Pawan Kumar Gian Chand, Delhi on behalf of Janta Trading Company on account of purchase of wheat. He kept the amounts of Rs.6,05,000/- and Rs.80,000/- in his briefcase. These amounts were seized by S.H.O., Railway Police Station, Delhi in the night of 22.8.1988. Thereafter, the Income Tax authorities took the amounts in their possession. Statement of Shri Bhushan Kumar was allegedly recorded on 23.8.1988, whereas, statement of the petitioner is stated to be recorded by respondent No.1. Immediately after seizure of amount, the Income Tax authorities made a survey at the premises of Pawan Kumar Gian Chand and Jyoti Parshad Sham Lal. The entries in their books of accounts and the statement of the proprietor of the firm corroborated the statement of Shri Bhushan Kumar that he has got the payment of the wheat from M/s Pawan Kumar Gian Chand and Jyoti Parshad Sham Lal.
3. Thereafter, order under Section 132(7) read with Section 132(5) of the Income Tax Act came to be passed, as mentioned above, by respondent No.1, retaining in his custody the entire amount of Rs.80,000/- stating that in his opinion that was sufficient to satisfy the aggregate amount of tax, interest and penalty leviable under the provisions of the Income Tax Act.
4. Short submission of the petitioner, on the basis of which present petition is filed, is that the aforesaid orders were passed without giving any opportunity to the assessee as required under Rule 112A of the Income Tax Rules, 1962 and, therefore, the order is in violation of principles of natural justice.
5. Rule 112A(1) of the aforesaid rules reads as under:
"112A(1) where any money, bullion, Jewellery or other valuable articles or officer shall, within fifteen days of the seizure and in case where the assets are handed over to him by the authorised officer under sub Section (9A) of Section 132, within fifteen days from the date on which such assets are handed over to him, issue to the person in respect of whom inquiry under Sub Section (5) of the Section 132 is to be made requiring him on the date to be specified therein (not being earlier than fifteen days from the date of service of such notice) either to attend at the office of the Income Tax Officer to explain or to produce or cause to be there produced evidence on which such person may rely for explaining the nature of the possession and the source of the acquisition of the assets."
6. Though these writ petition were filed in the year 1989, as mentioned above, no written statement/reply has been filed till date. Since allegations are not controverted, one has to proceed on the premise that before passing the impugned orders, opportunity of hearing was not given even when that is mandatorily required under Rule 112A of the Income Tax Rules. To the same effect are the provisions of Section 132(5) of the Income Tax Act as well. On this ground alone, the writ petitions are allowed and the impugned orders are hereby quashed. However, it would be open to the respondents to proceed afresh after giving opportunity of hearing to the petitioners.
P. SENRegards
Prarthana Jalan
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