Shally Thapar Vs ACIT (Delhi High Court)
Delhi High Court Pulls Up Income-tax Department for 13-Year Delay in Returning Seized Cash and Jewellery
The Delhi High Court expressed strong displeasure over the Income-tax Department’s failure to return seized cash & jewellery even after 13 years. The petitioner contended that cash of ₹32.50 lakh & jewellery valued at ₹23.16 lakh, seized during a search in September 2010, continued to remain with the Department despite there being no outstanding tax demand. After adjusting the tax demand for AY 2011-12 in the assessment order, ₹9.96 lakh remained refundable, yet the Department neither returned the balance cash nor the jewellery despite the petitioner furnishing the required indemnity bond in 2018.
The Court noted the Department’s untenable stand that the assessee should first pay the outstanding demand with 12% interest, following which the seized amount would be refunded with only 6% interest. The Bench observed that the real grievance of the petitioner was not merely the money but the sentimental value attached to the seized jewellery, which had caused prolonged mental distress to the petitioner and his family.
Finding no satisfactory explanation from the Revenue except that some rectification remained pending, the Court condemned the Department’s conduct as reflecting “high-handedness and red-tapism.” It observed that while taxpayers are expected to act honestly, tax authorities are equally expected to discharge their statutory duties promptly. The Court directed the concerned Assessing Officer to remain personally present on the next date of hearing to explain why the matter had remained unresolved for over 13 years.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present case portrays shocking state of affairs, wherein an amount of Rs.32,50,000/- in cash and jewellery worth Rs.23,16,146/- which were seized on 17.09.2010 are still lying seized/retained by the Department.
2. According to the petitioner no demand is due against him and still such amount of Rs.9,96,150/- and the jewellery which was valued at Rs.23,16,146/- way back in the year 2010 is still lying seized with the respondent, for no rhyme and reason.
3. Mr. Jolly, learned senior counsel for the petitioner, submitted that now the Assessing Officer, who vide assessment order dated 28.03.2013, had adjusted a sum of Rs.22,53,850/- against the petitioner’s demand of Assessment Year 2011-12, leaving a sum of Rs.9,96,150/- refundable to the petitioner, is now asking the petitioner to deposit the demand with applicable up-to-date interest from the date of assessment order (@12% per annum) whereafter he would refund the amount of Rs.32,50,000/- along with interest @ 6%.
4. The petitioner has averred that he had received a communication on 08.08.2018, requiring him to furnish an indemnity bond, which he did furnish with promptitude on 20.08.2018 but thereafter, he neither received the seized cash and the jewellery nor has he heard anything from the Department. Even all his representations and communications went unheard and unheeded.
5. Learned senior counsel for the petitioner submitted that it is not the amount lying seized with the Department, which is causing much concern to the assessee, but it is the sentiments and emotions attached with the seized jewellery, which gives continuous distress and mental suffering to the assessee and his wife.
6. Mr. Indurj Singh Rai, learned senior standing counsel for the respondent, could not give any satisfactory reply as to how and why the Department has been sitting tight over the matter for years together, except that some rectification was required to be done at the Department’s end.
7. We cannot refrain from observing that such approach adopted by the Department and officers reflects an attitude of high handedness and redtapism. In the present era, when one expects honesty and uprightness from the assessees and the tax payers, the least what is expected from the officers is, that they do what is enjoined upon them to do in timely manner.
8. List this case on 04.08.2026.
9. The concerned Assessing Officer shall remain present on the next date of hearing to explain the reasons for which the needful has not been done for 13 years.
