Dipak Kumar Agarwal Vs Assessing Officer And 4 Others (Allahabad High Court)
In the case of Dipak Kumar Agarwal Vs Assessing Officer and 4 Others, the Allahabad High Court addressed the issue of seizure of assets under Section 132B(1)(i) of the Income Tax Act, 1961. The petitioner sought to quash the seizure of Rs. 36,12,000 and requested the release of the detained amount.
The petitioner, a jeweler, handed over Rs. 36,12,000 to his worker for purchasing gold jewelry. However, the worker was apprehended by the police, and the cash was seized by the Income Tax Authority under Section 132(1-A) of the Act.
The petitioner applied for the release of the seized amount, stating that it was duly accounted for and tax paid. The assessing authority failed to make a decision on the application within the stipulated 120 days. The petitioner argued that according to the second proviso of Section 132B(1)(i), the seized amount should be released automatically if no decision is made within the specified time frame.
However, the revenue contended that there is no absolute right to refund during pendency of assessment proceedings. They argued that the word ‘shall’ in the second proviso should be interpreted as directory rather than mandatory.
