VIRENDER NARANG vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 28 1 NEW DELHI & ORS.
What did the High Court hold?
The Delhi High Court, while acknowledging the genuine grievance of the petitioners regarding the prolonged seizure and attachment of their assets for over 27 years, noted the department's positive role in persuading the authorities to act. On July 6, 2026, the competent authority expressed an in-principle decision to release all seized assets, assuring completion within 1-2 weeks. The petitioners confirmed that most assets, including FDRs, have been released, except for a sum of Rs. 14,89,406/- (rent attached in Neera Narang's case) and specific movable assets in Virender Narang's case (cash of Rs. 1,00,000/-, Rs. 48,92,230/- from income tax report, and DDs totaling Rs. 29,10,940/- from Shree Rathnam Restaurant Ltd.). The Assessing Officer cited the age of the records for the delay, assuring release within two weeks. The Court appreciated the department's efforts and closed the proceedings, expecting the remaining assets to be released within four weeks and directing the respondents to pay applicable interest as per law.
What were the facts?
The petitioners, Neera Narang and Virender Narang, filed writ petitions before the Delhi High Court challenging the inaction of the Assistant Commissioner of Income Tax. A search was conducted on their residential premises on December 17, 1999, leading to the seizure of jewellery, cash, and fixed deposits, and attachment of immovable properties. Despite appeals and remands to the Assessing Officer, no order was passed, and seized assets were not released for over 27 years. The petitioners argued that no demand was outstanding, making the continued seizure and attachment unjustified. The Revenue contended that releasing assets would jeopardize recovery rights. The High Court, in an interim order dated May 26, 2026, directed the authorities to decide on the release of movable assets within two weeks and immovable properties by June 30, 2026. Subsequently, on July 6, 2026, the department agreed in principle to release seized assets.
What were the issues?
1. Whether the continued seizure of movable assets (cash, jewellery, fixed deposits) and attachment of immovable properties of the petitioners is justified when no demand is outstanding against them, and proceedings have become time-barred? Assessee's Contention: The petitioners argued that the search and seizure occurred on December 17, 1999, and despite the passage of over 27 years, no demand is currently outstanding. They contended that the proceedings have become time-barred, and therefore, the respondents are obligated to release all seized assets and lift the attachments. They relied on the principle that indefinite seizure of assets awaiting a demand, especially movable properties like cash, jewellery, and FDs, cannot be countenanced. Revenue's Contention: The Revenue argued that the matters were remanded to the Assessing Officer, and releasing all assets as prayed by the petitioners would jeopardize the Revenue's rights to recover any potential demand. They expressed concern that if everything were released, their recovery rights would be prejudiced.
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Cause title — parties, addresses and appearances
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CORAM:
HON'BLE MR. JUSTICE DINESH MEHTA
HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA
O R D E R %
2026
This Court had passed a detailed order on 26.05.2026 which is reproduced herein below:- “1. Mr. Sachit Jolly, learned Senior Counsel for the petitioners submitted that a search took place at petitioners' residential premises on 17.12.1999 and during such search, petitioners' jewellery, cash and fixed deposits were seized and their various immovable properties were attached.
Learned counsel submitted that a demand of Rs. 1,38,61,363/- and Rs.13,53,74,118/- in case of petitioner Neera Narang and Virender Narang respectively, was raised and in spite of the fact that the appeal filed by the assessee so also the Revenue were disposed of and the matter was remanded to the Assessing Officer, the respondent no. 1 has neither passed any order nor released the petitioners' seized assets and has not lifted the attachment.
While highlighting the petitioners' grievance that for last more than 27 years, the petitioners' cash, jewellery and FDs are lying seized and immovable properties are under attachment, learned Senior Counsel argued that as of today, there is no demand against the petitioners and therefore, the respondents are obligated to release the same and lift the attachment.
Ms. Naincy Jain, learned Junior Standing Counsel for the respondents, on the other hand, submitted that the matters stand This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
remanded to the Assessing Officer and if everything is released as prayed by the petitioners, the Revenue's rights to recover the demand would be jeopardized.
At this juncture, Mr. Sachit Jolly submits that in any case the proceedings have become time barred and no demand can now be raised.
Having heard learned counsel for the parties, we are of the view that the respondents ought to have passed an appropriate order (if so felt) pursuant to order of the Tribunal which was passed on 23.07.2018. We are of the prima facie view that pursuant to remand, even if best case of the Revenue is taken, then also, the demand if raised is not going to exceed Rs. 15 crores as and when raised, (because the assessment order at first stage made addition of Rs.l5 crores).
We are conscious of the position that there shall be a component of interest as well. But, the period for which the interest would be payable would also be a question to be determined by the Assessing Officer and/or the Appellate Authorities.
In any case, awaiting the demand (if any) indefinite seizure of the assets of the petitioners more particularly, jewellery, cash and FDs cannot be countenanced.
We, therefore, as an interim measure direct the Assistant Commissioner of Income Tax-Respondent no.l or any competent authority to forthwith take a decision on petitioners' request for release of cash, jewellery and FDs within a period of two weeks of placing a certified copy of the order instant.
In case the competent authority is of the view that movable This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
properties as mentioned in para no.8 cannot be released, he shall pass a speaking order, and communicate it to the petitioners & Mr. Shlok Chandra, learned Senior Standing Counsel.
So far as the immovable properties of the petitioners are concerned, the competent authority shall pass appropriate order latest by 30.06.2026. 12. List these cases on 06.07.2026.”
Mr. Shlok Chandra, learned Senior Standing Counsel and his associate Ms. Naincy Jain played positive role and persuaded the respondent authorities to do the needful considering the genuine grievance of the petitioners that were highlighted before this Court.
On 06.07.2026, the competent authority of the department expressed its in principle decision to release all the assets which were seized by the department and an assurance was given that the needful would be done within 1-2 weeks.
Mr. Sachit Jolly, learned Senior Counsel informs with a sense of gratitude on behalf of the petitioners that at last, the department has released all the seized assets, including most of the FDRs etc. except few movable assets.
He pointed out that in the case of the petitioner, Neera Narang (W.P.(C) No. 35093/2026) a sum of Rs.14,89,406/- being rent attached by the department is yet to be released, while in case of Mr. Virender Narang (W.P.(C) No. 7175/2026), the following movable assets are yet to be released:- Dated Type of attachment Bill/attached details Amount Amount This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
1999 Cash taken by Income Tax Department-attached Cash 1,00,000
2017 Income Tax Department Income tax report generated dated from 01.06.2024 to 29.06.2017 48,92,230 31.03.2018 Income Tax DD attached Shree Rathnam Restaurant Ltd. 8,62,500
2019 Income Tax DD attached Shree Rathnam Restaurant Ltd. 10,35,000 30.03.2020 Income Tax DD attached Shree Rathnam Restaurant Ltd. 10,13,440
Mr. Shlok Chandra, learned Senior Standing Counsel submitted that the Assessing Officer has informed that since the record is old, it has taken some more time. He however, assured that these assets too would be released within two weeks.
While recording our appreciation for the efforts taken by the department, we close the proceedings with the hope that the needful will be done within a period of four weeks from today and the assessee will not be required to move any further application in this regard.
Needless to observe that respondents shall pay the applicable interest in accordance with law.
The petition stands disposed of along with pending applications.
DINESH MEHTA, J.
RAJNEESH KUMAR GUPTA, J. AUGUST 5, 2026 neelam
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
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