Bombay High Court
Jagdishprasad M. Joshi vs Deputy Commissioner Of ... on 9 October, 2002
Equivalent citations: (2005) 195 CTR Bom 10, 2005 273 ITR 296 Bom
Bench: S Kapadia, J Devadhar
JUDGMENT
1. Rule. The respondents waive service. By consent, rule made returnable forthwith and taken up for final hearing.
2. On March 14, 2002, search and seizure operations were conducted by the Department under Section 132 of the Income-tax Act, 1961, at the office premises, residential premises and factories of the petitioner. Prohibitory orders were also issued on the industrial undertaking of the petitioners at Silvassa and also on the office premises. Under the prohibitory orders, the bank accounts were attached, bonds were seized and FDs were also seized. However, during the period March to May 2002, respondent No. 1 encashed the FDs and Rs. 72,40,330 from the bank account of the petitioner in the State Bank of India, Powai. Hereto annexed and marked as annexure I is a statement giving particulars of encashment of FDs, withdrawal of cash, seizure of bonds and seizure of FDs.
3. In this writ petition, we are not concerned with the question whether the petitioner has undisclosed income. What is challenged is the action of respondent No. 1 in encashing the above assets and appropriating the same without orders of assessment. We are, therefore, not required to go into the merits of the matter.
4. Mr. Desai, learned senior counsel for the Department at the very outset conceded that respondent No. 1 had no authority to encash the FDs or to withdraw the cash, from the bank accounts without the order of assessment. He fairly stated that on or before October 23, 2002, the Department would bring back the amount into the respective accounts from which they have been withdrawn. He, however, contended that the attachment of the accounts, the bonds and FDs be continued.
5. The action of respondent No. 1 vis-a-vis appropriation was high handed. It is not supported by any provisions of the Income-tax Act, particularly when the appropriation is sought to be made without the assessment order. We would have taken a stricter view of the matter. However, on the facts and circumstances of the case, the following order is passed :
Order:
(a) On or before October 23, 2002, the Department is directed to bring back Rs. 17,93,58,944 into the respective accounts in the Syndicate Bank, Bhandup, Thane and Powai. Similarly, the Department shall bring back Rs. 72,40,330 into the petitioner's account in the State Bank of India, Powai. The petitioners would be entitled to invest Rs. 17,93,58,944 in FDs as per the position prevailing prior to encashment of FDs between March 19, 2002 and March 23, 2002 on such terms and conditions as the respective banks may deem fit. However, it is made clear that the petitioners' FD accounts in the above banks will continue to remain attached and similarly, the petitioners' account from which Rs. 72,40,330 has been withdrawn on March 26, 2002, will also continue to remain attached. The petitioners will give particulars of FDs to respondent No. 1 as and when they invest Rs. 17,93,58,944. It is also made clear that the petitioners will invest the said amount of Rs. 17,93,58,944 in three (3) FDs as per annexure 1. This is because prior to March 19, 2002, the aforestated amount of Rs. 17,93,58,944 was invested in three (3) FDs of Rs. 7,13,65,983, Rs. 5,36,73,700 and Rs. 5,43,19,261.
(b) The bonds for Rs. 35,01,50,000 would continue to remain attached and that the same will not be appropriated except in accordance with law. The attachment will continue under Section 132(3) of the Act.
(c) Similarly, the two FDs, which the Department has seized, of Rs. 30,00,000 and Rs. 1,24,30,637 in April/May 2002, would continue to remain attached under Section 132(3) of the Act, till appropriation is done in accordance with the Act.
6. Subject to the above, the writ petition is disposed of.
7. Parties to act on an ordinary copy of this order, duly authenticated by the associate of this court.
