Madras High Court
The Assistant Commissioner Of ... vs Padam J.Challani on 9 September, 2021
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 09.09.2021
CORAM:
THE HON'BLE MR. JUSTICE S.M.SUBRAMANIAM
Review Application No.100 of 2021
in W.P.No.23989 of 2018
and WMP No.17429 of 2020
The Assistant Commissioner of Income Tax,
Central Circle 3 (4),
New No.46, Mahatma Gandhi Road,
Chennai – 600 034. .. Petitioner
Vs
Padam J.Challani .. Respondent
PRAYER: This Review Petition is filed under Article 226 of the
Constitution of India read with Section 114 (Order XLVII Rule 3) of
C.P.C, praying to review its judgment dated 04.11.2019 in
W.P.No.23989 of 2018 and allow this Review Petition and dismiss the
writ petition W.P.No.23989 of 2018.
For Petitioner : Mr.A.P.Srinivas
Sr. Standing Counsel for Income Tax.
For Respondent : Mr.R.Sivaraman
ORDER
The Review Application is filed against the order passed in
https://www.mhc.tn.gov.in/judis/
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
W.P.No.23989 of 2018 dated 04.11.2019.
2. The relief sought for in the present writ petition is to direct the
respondent to forthwith release the gold jewelery which were seized
during the course of search and recorded in Panchanama dated
19.04.2012, to the petitioner.
3. There is no dispute with reference to the facts recorded by this
Court in the order dated 04.11.2019, except that the assessment order for
the year 2013 - 14 was pending during the relevant point of time, when
the order was passed in this writ petition.
4. Under Section 132B(i) of the Income Tax Act, the assets seized
under Section 132 or requestioned under Section 132A may be dealt with
in the following manner:
“(i) the amount of any existing liability under this Act,
the Wealth Tax Act, 1957 (27 of 1957), the Expenditure-tax
Act, 1987 (35 of 1987), the Gift tax Act, 1958 (18 of 1958)
and the interest tax Act, 1974 (45 of 1974), and the amount of
the liability determined on completion of the assessment
(under Section 153A and the assessment of the year relevant
to the previous year in which search is initiated or
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Review Application No.100 of 2021
in
W.P.No.23989 of 2018
requisition is made, or the amount of liability determined on
completion of the assessment under Chapter XIV-B for the
block period, as the case may be (including any penalty
levied or interest payable in connection with such assessment
or reassessment) and in respect of which he is in default or is
deemed to be in default may be recovered out of such
assets.”
5. In view of the above provisions, the goods seized cannot be
released, if any assessment was pending during the relevant point of
time.
6. The error apparent on record in the present case is that, at the
time of passing the order dated 04.11.2019, it was submitted that the
assessment proceedings were pending with regard to the assessment year
2013 – 14. However, the assessment order was completed under Section
143 (3) read with Section 254 of the Income Tax Act on 17.10.2018 and
in that assessment order the demand of Rs.1,04,99,022/- was raised.
Aggrieved by the said assessment order, the writ petitioner / assessee had
filed an appeal before the Commissioner of Income Tax (Appeals) - 19,
Chennai, on 24.11.2018, vide acknowledgment No.379509921241118.
https://www.mhc.tn.gov.in/judis/
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
Admittedly the said appeal is pending for disposal.
7. In view of the fact that at the time of considering the grounds
raised by the writ petitioner in this writ petition, the assessment order
was pending for passing final orders and the said order was passed on
17.10.2018 and the petitioner / assessee filed an appeal before the
Income Tax (Appeals) on 24.11.2018, when the order in W.P.No.23989
of 2018 dated 04.11.2019 was made, it is represented that the assessment
proceedings were pending, however the fact is that the assessment order
was passed before the order passed in the writ petition and this fact was
not brought to the notice of this Court either by the writ petitioner or by
the respondent Department. Further, the vital fact relating to the release
of the assessee's jewelery was not brought before this Court. Therefore,
this Court issued a direction directing the authorities to release the
assessee's jewelery, which caused prejudice to the interest of the
Department.
8. This apart, in the said assessment order in the year 2013 – 14
the demand of Rs.1,04,99,022/- was raised and the appeal is also
pending. Thus, the said factum which was not considered by this Court
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Review Application No.100 of 2021
in
W.P.No.23989 of 2018
is to be construed as an error apparent on record.
9. Further, the learned counsel for the petitioner/revenue reiterated
that the respondents produced the communication dated 30.10.2019
issued by the Deputy Commissioner of Income Tax, Central Circle, to the
Standing Counsel informing that the petitioner has settled his tax dues of
Rs.1,46,440/- for the Assessment Year 2009-10 vide challan dated
25.07.2018. After saying so, the learned counsel submitted that even
though, as on date, there is no tax due from the petitioner, since the
assessment proceedings is pending for the Assessment Year 2013-14, the
assets retained by the revenue need not be returned to the assessee under
Section 132B of the Income Tax Act.
10. The learned counsel for the petitioner/revenue is of the opinion
that this Court has considered the submissions made on behalf of the
respondent in this regard and formed an opinion that revenue is not
justified in relying upon Section 132B, to retain the assets when
admittedly, as on date there is no arrears of tax due from the writ
petitioner and that the assessment for the year 2013-14 is not yet
completed and liability has arrived.
https://www.mhc.tn.gov.in/judis/
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
11. This Court is of the considered opinion that this is where
exactly the error crept in, in the order, as on the date of passing of the
order by this Court on 04.11.2019, the tax liability of the
petitioner/assessee was determined in the assessment order passed by
the competent authority on 17.10.2018 for the assessment year 2013-14.
Thus, the vital fact of assessment order dated 17.10.2018 and the tax
liability determined by the department was not brought to the notice of
this Court at the time of passing of the order. Undoubtedly, the mistake
was both on the part of the petitioner/revenue and the respondent/writ
petitioner.
12. The learned counsel for the respondent/writ petitioner further
contended that jewelery worth Rs.8 Crores and above are with the
custody of the department. Even as per the assessment order dated
17.10.2018, the tax liability for the writ petitioner is about
Rs.1,04,00,000/-. This being so, it is unnecessary for the department to
retain the jewelery belongs to the writ petitioner worth more than a sum
of Rs.8 Crores. It is contended that the department has no right to retain
such a large quantity of the property belongs to the petitioner more
https://www.mhc.tn.gov.in/judis/
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
specifically when the jewels are in the usage by family members.
13. Hence, it is the failure on the part of the respective parties to
the lis in placing the correct facts before this Court. If the order already
passed on 04.11.2019 is allowed to be executed then prejudice would be
caused to the interest of the Revenue. Once an error apparent is brought
to the notice of this Court at the instance of the parties, and further such a
fact is important for the purpose of determining the issues, then it is
necessary to review the order passed on 04.11.2019 in W.P.No.23989 of
2018.
14. It is brought to the notice of this Court that as per the seizure
Mahazar, the jewellery seized from the writ petitioner's premises is
valued more than Rs.8 crores. Thus, the respondent-Department is
directed to consider the applications filed by the writ petitioner on
13.11.2017 and on 28.11.2017 for release of jewellery.
15. While considering such applications, the respondent-
Department is directed to retain the jewellery worth equal to the tax
liability along with the interest and consider releasing of the remaining
https://www.mhc.tn.gov.in/judis/
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
jewellery by following the procedures as contemplated under law. The
said exercise is directed to be done as expeditiously as possible and
preferably, within a period of four weeks from the date of receipt of a
copy of this order.
16. With the above directions, the order dated 04.11.2019 passed
in WP No.23989 of 2018, stands reviewed and the Review Application is
allowed. The writ petition stands disposed of. However, there shall be no
order as to costs. Consequently, the connected miscellaneous petition is
closed.
09.09.2021
(2/2)
Speaking/Non-speaking order
Index: Yes/No
Internet: Yes
Pns/ars
https://www.mhc.tn.gov.in/judis/
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
S.M.SUBRAMANIAM, J.,
Pns/ars
Review Application No.100 of 2021
in
W.P.No.23989 of 2018
09.09.2021
https://www.mhc.tn.gov.in/judis/
