*(MAHMOOD K.U., vs. DIRECTOR GENERAL OF INCOME TAX,

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WP(C)/33549/2019HC KeralaKLHC01087513201907 December 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition with a direction to the first respondent (Director General of Income Tax) to consider and pass orders on Ext.P5, the petitioner's representation. This was to be done after affording the petitioner an opportunity of being heard. The Court explicitly clarified that it had not expressed any opinion on the merits of the matter. The first respondent was directed to endeavor to dispose of Ext.P5 within two months from the date of receipt of a certified copy of the judgment. The court did not decide the substantive issue of whether the cash should be returned or if the adjustment by the department was lawful, leaving it open for the first respondent to decide in accordance with law.

What were the facts?

The petitioner, Mahmood K.U. (since deceased, represented by his legal heir, Sherleena Mahmood), filed a writ petition before the High Court of Kerala. The petitioner was aggrieved by the Income Tax Department's failure to return cash seized from a third party, which the petitioner claimed belonged to him. The assessment proceedings for the relevant year had been completed, and the amount was accepted as belonging to the petitioner. The department, however, stated that the seized cash had been adjusted against outstanding demands of the person from whom it was seized, and therefore, its refund to the petitioner did not arise. The petitioner sought a direction for the Director General of Income Tax to consider his representation (Ext.P5) after an opportunity of being heard.

What were the issues?

1. Whether the Income Tax Department is obligated to return cash seized from a third party, which has been accepted as belonging to the petitioner during assessment proceedings, when the department has adjusted it against demands of the third party? (Question of law and fact, concerning the rights of an assessee regarding seized property and the department's power of adjustment). Assessee's Contention: The petitioner argued that since the cash was proven to belong to him and his assessment was completed accepting this, it should be returned. The petitioner sought a direction for his representation to be considered. Revenue's Contention: The revenue contended that the seized cash was adjusted against demands outstanding against the person from whom it was seized, and therefore, its refund to the petitioner did not arise. The revenue also agreed to the direction for considering the representation, provided the court did not express any opinion on the merits.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. WEDNESDAY, THE 7TH DAY OF DECEMBER 2022 / 16TH AGRAHAYANA, 1944 WP(C) NO. 33549 OF 2019 PETITIONER/S: 1 *(MAHMOOD K.U., AGED 56 YEARS MAHSAL, CHEMMARASSERY PARA P.O., AZHEEKODE, KANNUR.) *(DIED). THE LEAGAL HEIR OF DECEASED PETITIONER IMPLEADED AS ADDL. PETITIONER NO.2. 2 ADDL. P2.SHERLEENA MAHMOOD W/O. MOHAMMED NAVAS CEENTAKATH, AGED 40 YEARS, RABIYA NIVAS, PANOOR, KANNUR DISTRICT- 670 692 THE LEGAL HEIR OF THE DECEASED ORIGINAL WRIT PETITIONER IS IMPLEADED AS ADDITIONAL PETITIONER NO.2 AS PER THE ORDER DATED 28.03.2022 IN I.A. 1/2022. BY ADVS. K.I.MAYANKUTTY MATHER K.J.ABRAHAM(K/391/1999) R.JAIKRISHNA NIKHIL JOHN RESPONDENTS: 1 DIRECTOR GENERAL OF INCOME TAX, OFFICE OF DIRECTOR GENERAL OF INCOME TAX, I.S.PRESS ROAD, ERNAKULAM P.O., KOCHI- 682 035. 2 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, ALFA LIZA BUILDING, OPPOSITE S.R.V.SCHOOL, CHITTOOR ROAD, ERNAKULAM NORTH P.O., KOCHI- 682 011. 3 INCOME TAX OFFICER (INVESTIGATION), OFFICE OF THE JOINT DIRECTOR OF INVESTIGATION, I.S.PRESS ROAD, ERNAKULAM P.O., KOCHI- 682 035. BY ADVS. P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C)No.33549/2019 2

JUDGMENT Petitioner has approached this Court being aggrieved by the fact that certain amount of cash which was seized from a third party and which has been proved to belongs to the petitioner has not been returned by the Income Tax Department even after the assessment proceedings in respect of the petitioner for the concerned year has been completed, accepting the said amount to be that of the petitioner.

2.

The learned Standing Counsel appearing for the respondent department states that the question of refund of even part of the amount that was seized in cash from a third party, to the petitioner, does not arise, as the amount which was seized has been adjusted against certain demands outstanding against the person from whom the cash was seized. It is submitted that the petitioner cannot, on the basis of statements made, contend that the cash belongs to the petitioner and should be released to him.

3.

The learned counsel appearing for the petitioner states that the petitioner will be satisfied if a direction is issued to the first respondent to consider and pass orders on Ext.P5 representation made by the petitioner after affording to the petitioner an opportunity of being heard.

4.

The learned Standing Counsel appearing for the respondent department states that he has no objection in such a direction being issued provided it is clarified that this Court has not expressed anything on the merits of the matter

5.

Having heard the learned counsel appearing for the petitioner and the learned Standing Counsel appearing for the respondent department and having regard to the facts and circumstances of the case and also having regard to the limited nature of relief now sought for by the petitioner, this writ petition will stand disposed of directing the 1st respondent to consider and pass orders on Ext.P5, after affording to the petitioner an opportunity of being heard. It is clarified that this Court has not expressed any opinion on the merits of the matter and it will be open to the 1st respondent to take a decision on the matter in accordance with law. The 1st respondent shall endeavour to dispose of Ext.P5, within a period of two months from the date of receipt of a certified copy of this judgment. GOPINATH P. JUDGE ats

Appendix — schedule of exhibits
APPENDIX OF WP(C) 33549/2019 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE SWORN STATEMENT GIVEN BY THE PETITIONER DATED 10.02.2016. EXHIBIT P2 TRUE COPY OF THE SWORN STATEMENT GIVEN BY MR.MOHAMED NAVAS, DATED 04.02.2016. EXHIBIT P3 TRUE COPY OF THE INCOME TAX RETURN FILED BY THE PETITIONER ALONG WITH COMPUTATION STATEMENT DATED 20.10.2017. EXHIBIT P4 TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT DATED 28.12.2017. EXHIBIT P 4A NOTICE OF DEMAND UNDER SECTION 156 OF THE INCOME TAX ACT, DATED 28.12.2017. EXHIBIT P5 TRUE COPY OF THE REPRESENTATION GIVEN BY THE PETITIONER TO THE 1ST RESPONDENT DATED 31.05.2019.

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