1995 (4) TMI 8 - HC - Income Tax

Court orders return of seized cash, gold, and silver to petitioners after Income-tax Tribunal ruling.

The court ordered the return of seized cash, gold, and silver to the petitioners following a search by Income-tax and Central Excise Departments. The ... Central Excise, Search And Seizure, Tribunal's Order Issues:1. Seizure of cash, gold, and silver during a search conducted by Income-tax and Central Excise Departments.2. Orders passed by Customs and Income-tax Departments regarding seized valuables.3. Appeal against assessment order by the Income-tax Department.4. Appeal to the Income-tax Appellate Tribunal and subsequent legal proceedings.5. Prohibitory order under section 226(3) of the Income-tax Act.6. Legal objections raised by the Income-tax Department.7. Return of seized valuables, cash, and hundis to the assessees.Analysis:The judgment pertains to a case involving the seizure of cash, gold, and silver during a search conducted at the petitioner's office-cum-residence by the Income-tax and Central Excise Departments. The seized items were claimed to belong to the petitioner's mother and wife. Subsequently, the Customs Department passed orders directing the release of certain items on payment of penalties. The Income-tax Department issued a prohibitory order under section 226(3) of the Income-tax Act, leading to a dispute over the return of the seized valuables to the petitioners.Following the assessment order by the Income-tax Department, the assessees appealed, resulting in the Commissioner of Income-tax (Appeals) reducing the assessable amount. Both the Department and the assessees appealed to the Income-tax Appellate Tribunal, which decided in favor of the assessees, holding that the seized items could not be added to the income of the petitioner. The Department's applications for reference of legal questions were rejected, leading to the finality of the Tribunal's orders.The Income-tax Department opposed the petitions, arguing that the Tribunal's orders had not attained finality due to pending reference applications. However, the court rejected the Department's legal objections and directed the return of the seized valuables, cash, and hundis to the assessees in accordance with the Tribunal's order. The court emphasized the assessees' legal right to the return of their valuables under relevant sections of the Income-tax Act, thereby allowing the petitions and cancelling the prohibitory order.In conclusion, the court ordered the respondents to return the seized items to the assessees as per the Income-tax Appellate Tribunal's decision, revoking the prohibitory order under section 226(3) of the Act. No costs were awarded, and any security deposit was to be returned to the petitioners. The judgment clarified the legal rights of the assessees and resolved the dispute over the seized valuables, cash, and hundis in favor of the petitioners.