RAUMA IMRAN ADAM vs. COMMISSIONER OF INCOME TAX

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SCA/1662/2021HC GujaratGJHC24003192202129 January 2021Bench: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE ILESH J. VORA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ application with a direction to the respondents (Income Tax Department) to look into the matter at the earliest and take an appropriate decision in accordance with law. The Court noted that it had been more than two years since the cash was seized and that if the department intended to initiate further action, it should have done so by now. The Court directed that a decision be taken by 15.02.2021, and the writ applicant should be informed of the decision by the concerned authority. The Court did not explicitly quash the notice or order the immediate return of the cash but emphasized the need for a prompt decision. No specific issue was left undecided, as the Court directed a decision on the matter.

What were the facts?

The writ applicants, Rauma Imran Adam and others, filed a writ application under Article 226 of the Constitution of India before the High Court of Gujarat. They sought to quash a notice dated 16.10.2019 issued by the respondent Income Tax Department and to direct the handover of cash seized. The cash, amounting to Rs. 17,90,000/-, was seized by the police on 15.10.2019 from the applicants while they were travelling. Subsequently, the cash was handed over to the Income Tax Department at Mehsana, and proceedings under Section 131(1A) of the Income Tax Act, 1961, were initiated in October 2019. The applicants contended that they had cooperated with the inquiry, but no further proceedings had been initiated by the department for over two years.

What were the issues?

1. Whether the notice dated 16.10.2019 issued by the respondent authority under Section 131(1A) of the Income Tax Act, 1961, is liable to be quashed and set aside, and if the seized cash should be returned to the writ applicants. (Question of law and fact, concerning Section 131(1A) of the Income Tax Act, 1961). Assessee's Contention: The learned counsel for the writ applicants argued that despite the seizure of cash and initiation of proceedings under Section 131(1A) of the Income Tax Act, 1961, no further action had been taken by the department for over two years. The applicants had cooperated with the inquiry, and the continued retention of the cash was unjustified. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the initiation of proceedings under Section 131(1A) implies an ongoing inquiry by the department.

Which sections of the Income-tax Act were involved?

Section 131(1A)

AI-generated summary — verify with the full judgment below

C/SCA/1662/2021 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 1662 of 2021 ========================================================== RAUMA IMRAN ADAM Versus COMMISSIONER OF INCOME TAX ========================================================== Appearance: MALAV M MULANI(8844) for the Petitioner(s) No. 1,2,3,4 for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA

Date : 29/01/2021

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following reliefs: “A Your Lordships may be pleased to issue writ in the nature of mandamus or any other appropriate writ, order or direction quashing and setting aside the notice dated 16.10.2019 issued by the respondent authority at Annexure – A and thereby be further pleased to direct to handover the custody of cash seized in pursuance to the notice dated 16.10.2019 issued by the respondent authority at Annexure – A; B. Pending admission, final hearing and disposal of the present petition, Your Lordships may be pleased to issue writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction to hand over the cash seized pursuant to the notice dated 16.10.2019 issued by the respondent authority at Annexure – A; Page 1 of 2

C/SCA/1662/2021 ORDER C. Pass any such order and/or further orders that this Hon'ble Court may deem fit in the facts and circumstances of the present case;” 2. We have heard Mr. Malav Mulani, the learned counsel appearing for the writ applicant. It appears from the materials on record that cash to the tune of Rs.17,90,000/- was seized on 15.10.2019 by the Police from the possession of the writ applicants while they were travelling in a car and later the said cash was handed over to the Income Tax Department at Mehsana. Thereafter, the proceedings were initiated under Section 131 (1) A of the Income Tax Act, 1961. Such proceedings came to be initiated way back in October, 2019. According to the learned counsel his clients have cooperated in the inquiry conducted so far. However, till this date, the cash still remains with the department and no proceedings of any nature have been initiated under the Act, 1961. 3. We dispose of this writ application with a direction to the respondents to look into the matter at the earliest and take an appropriate decision in accordance with law. It is being more than 2 years since the property was seized. If the department wants to initiate any further action in this regard, it should have done by now. Let the matter be looked into and appropriate decision be taken by 15.02.2021. The writ applicant shall be informed accordingly by the concerned authority. 4. With the above, the writ application stands disposed of.

(J. B. PARDIWALA, J) (ILESH J. VORA,J) P.S. JOSHI Page 2 of 2

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