DINKAR U. DESAI vs. COMMISSIONER OF INCOME TAX - 16 AND 3 ORS.,

wp (b) a direction to the respondents to release  the cash,  jewellery and silver utensils seized during search proceedings on   January 30, 1997 under Section 132 of the Income Tax Act, 1961 (hereinafter referred   to   as  the   ‘said   Act’). 2 During   the   course   of   search   of   the     petitioner’s   premises   on January   30,   1997,   jewellery,   silver   utensils   and   cash   amounting   to Rs.150,000/­ were  seized.  Consequent to the search, block assessment proceedings for the period April 1, 1986 to   January 30, 1997 under Section 158BC of the Act were commenced.  On  March 26, 1999 the Assessing   Officer   passed   an   order   under   Section   158BC   read   with Section 143(3) of the said Act, for the block period   April 1, 1986 to January 30, 1997. In the above order the Assessing Officer negatived the petitioner’s case that some of  seized diamond jewellery and precious stones belonged to third parties viz. Subhash Jain, Nayan Desai and Mahesh Parikh. 3 Being aggrieved, the petitioner took the matter up in appeal and finally by an order dated   April 10, 2006 the Income Tax Appellate Tribunal   set   aside   the   orders   of   the   departmental   authorities   while restoring the matter to the file of the Assessing Officer to enable the Aswale 2/6 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:55:13

wp petitioner to establish that some of  the diamond jewellery and precious stones which were seized during the search belonged to others and not to the petitioner. The Tribunal directed as under: “We   have   heard   the   parties   and   considered   their submissions.  As evident from the grounds of appeal, the items in question are stated to have been given by Shri. Subhan Jain (Rs.1,66,000/­); Shri. Maheshkumar Hiralal   Parikh   (Rs.   18,40,650/­)   and   Shri.   Nayan Dinkar Desai (Rs.4,64,650/­).  At the time of hearing before us, the learned authorized representative for the assessee   reiterated   the   submissions   made   by   the assessee before the Departmental authorities that all the aforesaid items of jewellery were covered by the disclosure   made   by   Shri.   Subhash   Jain,   shri. Maheshkumar Hiralal Parikh and Shri. Nayan Dinkar Desai   under   the   Voluntary   Disclosure   of   Income Scheme, 1997. The issue in the case before us is not as to whether the said parties have made the disclosure under the VDIS.  The issue before us is as to how the nature and source of the items in question is explained. Mere declaration by third parties may not be sufficient unless the assessee also establishes as to how the items in question reached the assessee from third parties and consequentially  found in his possession at the time of search.     The   presumption   u/s.   132   (4A)   that   the Aswale 3/6 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:55:13

wp valuables found in possession or control of a raidee in the course of a search belong to him is a rebuttable presumption.     The   assesee   must   therefore   adduce satisfactory evidence to rebut that presumption.  In our view,   the   entire   issue   needs   further   examination   to establish as to whether the items in question belong to the assessee or to the third parties.  If they are held to belong to third parties, no further action on the part of the   Department  may   be  necessary.     If   the  items  in question are however held to belong to the assessee, the nature   and source of investment made in them would need to be further examined.  In this view of the matter,   the   orders   passed   by   the   Departmental authorities are set aside and entire issue is restored to the file of the AO  for a fresh decision after giving a reasonable opportunity of hearing to the assessee.” 4 By a communication dated May 31, 2011 the Assessing Officer  in accordance with the directions in the order dated  August 10, 2006 of the Income Tax Appellate Tribunal fixed the hearing  of the petitioner’s case on June 15, 2011 at 3.30 p.m. and called upon the petitioner to submit   evidence   with   regard   to   its   claim   that   part   of   the   seized diamonds   and   precious   jewellery   were   owned   by   Subhash   Jain, Maheshkumar Parikh and Nayan Desai   The respondent sent a reminder Aswale 4/6 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:55:13

wp dated 6th June, 2011. 5 The   petitioner,   instead   of   attending   the   hearing   before   the Assessing Officer and producing the necessary evidence in support of his claim, filed the present petition in this Court. The advocate for the petitioner, submits  that in view of the  inordinate delay and the fact that the  petitioner is an old person, the entire proceedings  be quashed. 6 We   are   not   inclined   to   interfere   in   the   present   case   more particularly  when the adjudication proceedings consequent to the order of the Income Tax Appellate Tribunal dated April 10, 2006 are pending before the Assessing Officer.   The petitioner, instead of attending the hearing and leading evidence in support of his claim, is seeking to avoid the hearing.  It ill  comes from such a person to complain of delay. 7 In   the   circumstances,   the   petition   cannot   be   entertained. However,  we direct that in case the petitioner has any evidence to lead he should file  the same within one month from the date of this order before  the Assessing Officer.  Thereafter, he should attend the  personal hearing either by himself or through his duly authorized representative as and when the matter is fixed for hearing by the Assessing Officer.  The Aswale 5/6 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:55:13

wp Assessing Officer is requested to  dispose of the proceedings before him at the earliest   preferably within six months from today. 8 In view of the above,  the petition is dismissed.  No order as to costs. (M. S. SANKLECHA,J.) ( S. J. VAZIFDAR,J.) Aswale 6/6 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:55:13 Powered by TCPDF (www.tcpdf.org)