Release of seized cash requires proof of ownership plus a satisfactory explanation of its nature and acquisition source.
Ownership established under Benami law does not itself justify release of cash seized in an income-tax search. The first proviso to section 132B(1)(i) permits a third-party claimant to seek release even where assets were seized from another person, subject where necessary to indemnity for competing claims. Release requires an application within the stipulated period and a satisfactory explanation to the Assessing Officer of the nature and source of acquisition. Benami findings that cash is not benami establish ownership only for those proceedings and do not displace the income-tax inquiry into its source. Questions concerning the statutory time limit, non-decision of an application, and deficient applications remain for Larger Bench determination.
Issues: (i) Whether the Benami proceedings conclusively established ownership of the seized cash; (ii) Whether a person claiming cash seized from another person's premises may seek its release under the first proviso to section 132B(1)(i); (iii) Whether established ownership entitled the claimant to immediate release without explaining the cash's nature and source.
Issue (i): Whether the Benami proceedings conclusively established ownership of the seized cash.
Analysis: The order under the Prohibition of Benami Property Transactions Act, 1988 expressly found the ownership of the cash to be established, held that it was not benami property, declined attachment, and dropped the proceedings. That determination conclusively established ownership for purposes of the Benami proceedings. It did not, however, determine the nature and source of the cash for income-tax assessment.
Conclusion: Ownership of the seized cash stood established in favour of the claimant under the Benami proceedings.
Issue (ii): Whether a person claiming cash seized from another person's premises may seek its release under the first proviso to section 132B(1)(i).
Analysis: The expression "person concerned" in the first proviso to section 132B(1)(i) includes a person whose assets are seized in a search conducted against another person. A claimant is therefore not disentitled from applying for release merely because the cash was seized from another person's custody, although Revenue interests may be protected by an appropriate indemnity where competing claims arise.
Conclusion: A third-party claimant may apply for release of seized assets under section 132B(1)(i), in favour of the assessee.
Issue (iii): Whether established ownership entitled the claimant to immediate release without explaining the cash's nature and source.
Analysis: The first proviso to section 132B(1)(i) requires an application within the stipulated period and an explanation of the nature and source of acquisition to the satisfaction of the Assessing Officer. Ownership established in proceedings under another statute does not substitute for this statutory disclosure and satisfaction. The application was delayed and did not explain the nature or source of the cash, while assessment proceedings concerning the seized cash remained pending or contemplated. The stated questions concerning the effect of the 120-day period, non-decision on an application, and a deficient application were referred to a Larger Bench for determination.
Conclusion: Established ownership alone did not entitle the claimant to immediate release of the cash without the required disclosure and satisfaction; the claim for release was not accepted at this stage, against the assessee.
Final Conclusion: The claimant's ownership and standing to seek release were recognised, but the income-tax inquiry into the source of the cash was not displaced; the questions concerning the statutory time limit and consequences of a deficient release application await determination by a Larger Bench.
Ratio Decidendi: A person claiming assets seized from another may invoke section 132B(1)(i), but ownership established under the Benami law does not by itself warrant release without compliance with the statutory requirement to explain the nature and source of acquisition to the satisfaction of the Assessing Officer.