SMT. HARSHA H. SHAH vs. COMMISSIONER OF INCOME TAX and ORS.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORIGINAL SIDE

WRIT PETITION NO.3025 OF 1991

Smt.Harsha H. Shah

residing at 21, Delstar, 9

Hughes Road, Bombay 400 036.

Petitioner

vs.

Aayakar Bhavan, Bombay City I

Bombay-400 020.

Aayakar Bhavan, Bombay-400020.

Bhavan, Bombay-20.

Respondents

Mr.S.P.Kanuga for the petitioner.

CORAM : R.M. LODHA &

ANOOP V. MOHTA, JJ.

DATED : 17th January 2006

ORAL JUDGMENT (Per R.M.Lodha,J.)

means of this writ petition filed under Article

226

of the Constitution of India, the petitioner

prays

for

direction

the

respondents

release

her

jewellery

seized

on 25th September, 1982

pursuant

search

made at her residence on 31st August, 1982.

The

petitioner

has

also

prayed

for

direction

the

respondents to pay compensation for wrongfully

withholding her jewellery.

Smt.Harsha H.

Shah - the petitioner has stated

the

writ petition that her husband carries on

business CNR No : HCBM020028431991 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15

the

name and style of M/s.Shah & Shah

Films.

The

said firm is assessed to income tax under the provisions

the Income Tax Act, 1961.

On 31st August, 1982, the

officers

the

Income Tax

Department

searched

the

residential

premises

of the petitioner and seized

the

jewellery

consisting

necklaces,

bangles,

rings,

chains

etc.

as described in the panchanama

drawn

them.

The

concerned

authority

treated

the

said

jewellery

belonging

to M/s.Shah & Shah

Films

and

issued

prohibitory

order under Section 132(3)

the

Income

Tax

Act.

By a further order

passed

25th

September,

1982, the seizure of the said jewellery

was

ordered

until

further orders.

The said jewellery

was

valued

Rs.1,31,272/-

(Rupees one

lac

thirty

one

thousand

two

hundred seventy two) by the

Department’s

valuer.

While

completing

the

assessment

the

firm-M/s.Shah

Shah Films on 30th October, 1986,

the

petitioner’s

jewellery

was

treated in

the

hands

M/s.Shah & Shah Films and its value at Rs.1,31,272/- was

added to the income of M/s.Shah & Shah Films.

Aggrieved

the order of the Assessing Officer, M/s.Shah &

Shah

Films

preferred

an appeal before the

Commissioner

Income

Tax

(Appeals) II, Bombay.

The Commissioner

Income

Tax (Appeals) II, Bombay accepted the submission

M/s.Shah & Shah Films for deletion of

Rs.1,31,272/-

from

their

income as the jewellery did not

belong

them.

The petitioner who was the owner of the jewellery

then

made an application to the Commissioner of

Income Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15

Tax,

Bombay City I and also to the Income Tax

Officer,

Ward 13(9) for release of her jewellery.

The petitioner

also

sent

many

reminders

through

her

Chartered

Accountant.

the letter dated 25th July, 1991,

the

Commissioner

of Income Tax, Bombay City I informed

the

petitioner

that

since

the concerned Officer

has

not

issued

the

no-objection

certificate,

the

jewellery

cannot

be released to her.

The petitioner then took up

the

matter for issuance of no objection certificate and

that

time

it was found that the no

objection

has

already

been issued by the concerned Income Tax Officer

20th

August,

1990 for releasing

the

petitioner’s

jewellery.

The

petitioner,

through

her

Chartered

Accountant,

then

again

took up the

matter

with

the

concerned authority but of no avail.

The facts that are

available

on record reveal that notice dated 9th

July,

1991

re-open

the

petitioner’s

assessment

under

Section

148

the Income Tax Act was served

the

petitioner

26th

July,

1991.

Though

various

objections

were raised by the petitioner, the concerned

Income

Tax

Officer passed the assessment order on

4th

March,

1994 purporting to be under Section 143(3)

read

with

Section

147(a)

Income Tax

Act,

1961.

The

petitioner’s

total income was assessed at Rs.2,44,000/-

being

the

value of the jewellery on 31st August

1982,

that was seized on 25th September, 1982.

The petitioner

challenged the assessment order dated 4th March, 1994 in

the

Appeal

before

the

Commissioner

Income

Tax Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15

(Appeals).

The Appellate Authority allowed the

appeal

and

ordered

deletion of the entire amount of

addition

made

Rs.2,44,000/-.

The Revenue went

further

appeal before the Income Tax Appellate Tribunal.

By the

order

dated 20th October, 1999 the Income Tax Appellate

Tribunal

dismissed the appeal filed by the Revenue

and

upheld

the

order

of the Commissioner

Income

Tax

(Appeals).

We are informed that the order passed by the

Income Tax Appellate Tribunal dated 20th October, 1999

has attained finality.

On behalf of the respondents an affidavit in

reply

has

been filed by E.B.Vijayan Nair, I.T.O.

Ward 13(9),

Bombay

14th October, 1991.

That the petitioner

wife

of one of the partners of the firm M/s.Shah & Shah

Films

is admitted.

It is stated in the reply affidavit

that

31st August, 1982 search was conducted in

the

premises

the

said

firm

and

jewellery

worth

Rs.1,31,272/- was seized.

It is admitted that the value

the jewellery was treated as firm’s income from

the

undisclosed

source

by the assessing officer,

but

the

said

income

was

deleted

the

appeal

the

Commissioner

of Income Tax (Appeals).

It is averred in

the

reply affidavit that as the petitioner did not file

return

for

the year 1982-83, the notice under

Section

148

the

Income

Tax Act, 1961 was

served

the

petitioner

26th July, 1991.

It is stated that

the

petitioner

has

not filed the return until the date

of Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15

the

filing

of the reply affidavit despite

the

notice

under

Section

148.

The case has been set up that

the

petitioner’s

house was earlier raided on 31st

October,

1981

and jewellery worth Rs.44,000/- (Rupees forty four

thousand)

was found.

Now in the raid conducted on 31st

August,

1982,

the

jewellery worth

Rs.1,31,272/-

was

found.

The petitioner has to explain the acquisition of

jewellery valuing Rs.87,272/- (Rupees eighty seven

thousand two hundred seventy two).

The petitioner filed rejoinder on 21st October, 1991

and then filed additional affidavit on 20th December,

2005.

petitioner. Nobody appears for the respondents.

From

the

narration of facts which

have

been

noticed

above,

clear that

the

search

residential

premises of the petitioner on 31st

August,

1982,

the

jewellery valuing Rs.1,31,272/- was

seized.

Since

the

search

was,

according to

the

Income

Tax

Department,

the premises of one of the partners

the firm M/s.Shah & Shah Films,

the value of the seized

jewellery

amounting

to Rs.1,31,272/- was added to

the

firm’s income from undisclosed source.

The firm went in

appeal

and

the

Commissioner of Income

Tax

(Appeals)

deleted

that

addition.

It is, thus, clear

that

the Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15

jewellery

has not been treated as belonging to the firm

the

Commissioner of Income Tax (Appeals)

and

that

order

has attained finality.

The jewellery was treated

that

belonging to the petitioner and since

the

opinion

of the concerned Income tax Officer, the return

was

not filed by the petitioner for the assessment year

1982-83,

the notice under Section 148 of the Income Tax

Act

was

served on the petitioner on 26th

July,

1991.

The

assessing

officer,

pursuant to the

notice

under

section

148

the

Income

Tax

Act,

assessed

the

petitioner’s

total income at Rs.2,44,000/- (Rupees

two

lac

forty

four

thousand) on account

income

from

undisclosed

sources

being the value of

the

jewellery

found on 31st August, 1982 and seized on 25th September,

1982.

The

assessment

order passed by

the

assessing

officer

4th

March,

1994 purporting

under

Section

143(3)

read

with Section 147(a)

came

challenged

the

petitioner

appeal

before

the

Commissioner

of Income Tax (Appeals).

The Commissioner

Income Tax (Appeals) vide order dated 31st

October,

1994,

set aside the order of the assessing officer

and

deleted

the

entire

amount of Rs.2,44,000/-

from

the

income

the petitioner.

The Revenue went in

appeal

before

the

Income

Tax Appellate Tribunal

but

failed

there.

There is nothing on record to indicate that the

order

passed

by Income Tax Appellate Tribunal on

20th

October,

1999

upholding the order of

Commissioner

Income Tax (Appeals) has been challenged by the Revenue. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15

view of the order passed by the Income Tax Appellate

Tribunal

20th October, 1999 and the

earlier

order

passed

the

Commissioner of

Income

Tax

(Appeals)

relating

to the assessment of the firm-M/s.Shah &

Shah

Films,

are of the considered view that there is

justification

the

act

the

respondents

withholding

the

jewellery that was seized

vide

order

dated

25th

September,

1982,

pursuant

the

raid

conducted at the residential premises of the petitioner

on 31st August, 1982.

We, accordingly, allow the writ petition and direct

the

respondents

release

the

jewellery

the

petitioner

that

was

seized

vide

order

dated

25th

September,

1982

in the raid conducted on 31st

August,

1982

within

two weeks of the production of this

Order

before

the respondent no.1 (Commissioner of Income Tax,

Bombay City-I, Bombay). Since the respondents have not

chosen to appear, we award no costs.

(R. (R. (R. M. LODHA, J.) M. LODHA, J.) M. LODHA, J.)

(ANOOP (ANOOP (ANOOP V. MOHTA, J.) V. MOHTA, J.) V. MOHTA, J.) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:15 Powered by TCPDF (www.tcpdf.org)