Case Law Details
Concededly, the jewellery is 398 gms and of gold. The assessee relies on circulars of 1985 and 1994 to say that when such small quantities are recovered, no follow-up action is necessary and that in any case, the jewellery is her stridhan. The respondent counters by saying that though in the first round of litigation, the assessee’s contentions were accepted, that AO’s order was set aside and a fresh de novo proceeding led to addition of a greater quantum. It is further submitted that till tax demands are satisfied, the property can be validly retained. This court is of opinion that the respondent’s recalcitrance is not mere inaction; it is one of deliberate harassment.
Relevant Extract of the Judgment
1. The writ petitioner in these proceedings under Article 226 of the Constitution is aggrieved by the refusal – by the respondents i.e. the income tax authorities -to release the jewellery – approximately 319.98 g, seized by them in the course of search proceedings under Section 132 of the Income Tax Act, 1961 (hereafter “the Act”).
2. On 10th August, 2000, the income tax authorities conducted search and seizure proceedings in respect of the petitioner’s husband’s premises and seized several documents and other materials. On 21st March 2001 a consequential action by way of search of a locker in the Indian Overseas Bank (IOB) was conducted. The bank locker contained jewellery. That jewellery is the subject matter of these proceedings. On 18th June, 2001, the petitioner’s husband requested income tax authorities to release the jewellery and stated that it belonged to his wife, i.e. the petitioner. On 24th March, 2002 and 4th April, 2002, the petitioner requested the income tax authorities for release of the jewellery stating that it belonged to her as it was her stridhan. The petitioner stated that her daughter too owned the jewellery. It was further stated in another letter that the jewellery was needed for religious and family occasions; the petitioner relied upon the contents of guidelines issued by the Central Board of Direct Taxes to say that the retention of the jewellery was contrary to the instructions. On 29th August, 2002, the Assessing Officer (AO) completed his proceedings in respect of the petitioner’s husband and demanded about `1.22 crores as tax towords undisclosed income. In this order the assessing authority accepted that the jewellery found in the locker actually belonged to the petitioner as she claimed.
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