SHRI VINOD KUMAR @BINOD KUMAR vs. COMMISSIONER OF INCOME TAX

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JUDGMENT S.B. CIVIL WRIT PETITION NO.9895/2009 (Shri Vinod Kumar @ Binod Kumar Vs. Commissioner of Income Tax) Date of Order : 16.03.2012 HON'BLE MR. JUSTICE ALOK SHARMA Mr. P.K. Kasliwal, for the petitioner. Ms. Parinitoo Jain, for the respondent. The case of the petitioner-Assessee is that in a search conducted on 14.12.2000, various documents, cash, jewellery etc. were seized. The Assessing Officer framed the assessment order dated 27.12.2002 and the same was challenged before the Commissioner of Income Tax (Appeal), Kota [hereinafter 'CIT (Appeals)'] whereupon vide order dated 14.02.2005, the appeal of the petitioner- Assessee came to be partially allowed. The respondent- Income Tax Department challenged the order dated 14.02.2005 passed by the CIT (Appeal) before the Income Tax Appellate Tribunal (hereinafter 'the Tribunal') and the Tribunal vide order dated 07.11.2006 dismissed the appeal of the Department. Counsel for the petitioner-Assessee submits that as per the final assessment made under Section 158 BC of the Income Tax Act, 1961 (hereinafter 'the Act of 1961') for the block period of 1990 to 2000 under orders detailed above, the petitioner-Assessee has

2 discharged all his liabilities and yet the amount to an extent of Rs.38,625/- in excess of the petitioner's liability after discharge of all dues of the Department and various other assets seized remain to be in the custody of the Department without legal foundation and just cause. It is submitted that the petitioner-Assessee moved an application before the Commissioner Income Tax, Kota for release of the assets seized in the course of search conducted on 14.12.2000 in view of no outstanding liability to the Department, but vide order dated 13.03.2009, the application was dismissed merely on the ground that a further appeal against the order dated 07.11.2006 passed by the Income Tax Tribunal was pending before this Court under Section 260 A of the Act 1961 consequent to which the assets could not be released by the Department. Counsel submits that there is no interim order passed by this Court to take away the operating consequences of the order dated 07.11.2006 passed by the Income Tax Appellate Tribunal. Counsel for the respondent-Department could not controvert the submissions of the counsel for the petitioner- Assesse on facts as it is admitted that no liability of the petitioner-Assesse to the Income Tax Department under the

3 Act of 1961 is pending. Counsel however submits that in view of the pendency of the appeal under Section 260A of the Act of 1961 before this Court against the order dated 07.11.2006, passed by the Tribunal, there is a potential liability against the petitioner-Assessee. Heard the counsel for the parties and perused the writ petition. On a query of the Court as to whether the Act of 1961 more particularly Section 132B thereof or any judgments of this Court or other high Court or the Hon'ble Apex Court allow for holding of the assets of an Assessee for reasons of potential liability, the counsel for the respondent- Department could not make any submission in law and unsurprisingly so. If the Department were to be allowed to seize and hold assets of assessees for reasons of “potential liability”, it would be destructive of law as no statutory provision has been enacted for the purpose. Consequently, this petition is allowed and the order dated 13.03.2009 passed by the Commissioner of Income Tax, Kota is set aside. The petitioner is directed to move an application before the competent authority for the release of his assets seized by the Income Tax Department

4 in the course of search conducted on 14.12.2000. In the event, the application is moved, the competent authority is directed to decide the application immediately and issue direction to release forthwith the petitioner's assets seized by the Income Tax Department in the search of 14.12.2000. The writ petition stands disposed of accordingly. (ALOK SHARMA), J MS/- All corrections made in the judgment/order have been incorporated in the judgment/order being emailed. - Manoj Solanki, Jr. P.A.