Income Tax Dept. Ordered to Provide Seized Documents; Petitioner Given Deadlines for Response and Resumption of Proceedings.

The HC directed the petitioner, involved in a gold jewellery business, to apply for seized documents within ten days. The Income Tax Dept. must provide copies and pen-drives within fifteen days. The petitioner has four weeks to respond after receipt. Proceedings will resume thereafter, with no limitation challenge on the final order. Interlocutory applications were dismissed, and further proceedings were paused to allow these steps.

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Issues:
1. Assessment proceedings deferred until documents returned
2. Completion of investigations and release of seized records

Analysis:

Issue 1: Assessment proceedings deferred until documents returned

The petitioner, engaged in the Gold jewellery business, filed a writ petition seeking to defer assessment proceedings until all seized documents from the business premises were returned. The petitioner, an assessee under the Income Tax Act, had multiple entities involved in the business. Following a search and seizure operation, notices under Sections 153C and 142(1) of the Act were issued for assessment years 2015-16 to 2020-21. The petitioner, willing to cooperate, faced challenges in responding to the notices due to relevant documents being seized by the Department. The petitioner requested copies of required documents and pen-drives from the seized computer system to provide a proper reply. The petitioner also agreed not to challenge the final assessment order on the ground of limitation if provided with necessary documents. The Senior Standing Counsel for the Income Tax Department agreed to supply relevant documents on a payment basis, allowing the petitioner to file a reply and proceed with assessment.

Issue 2: Completion of investigations and release of seized records

The petitioner sought completion of investigations against related entities and the release of seized records in a time-bound manner. The court directed the petitioner to apply for relevant documents within ten days, with the Department obligated to provide copies and pen-drives within fifteen days of the application. The petitioner was given four weeks from receipt of documents to file a reply to the notice, after which further proceedings would commence. Failure to apply for documents or to respond within the stipulated time would result in the Department proceeding with the notice. The court clarified that if the petitioner filed a reply within four weeks of receiving relevant documents, the final assessment order would not be challenged on the grounds of limitation. Interlocutory applications were dismissed, and further proceedings were to be kept in abeyance to facilitate the aforementioned steps.

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