SANJEET SINGH AND OTHERS vs. PRINCIPAL DIRECTOR OF INCOME TAX INVESTIGATION, CHANDIGARH AND OTHERS

The date when the judgment is reserved 31.01.2026

The date when the judgment is pronounced 18.02.2026

The date when the judgment is uploaded on the website 19.02.2026

Whether only operative part of the judgment is pronounced or whether the full judgment is pronounced Full

The delay, if any, of the pronouncement of full judgment, and reasons thereof Not applicable

2023, issued by the Central Board of Direct Taxes (for short – the CBDT). THE FACTS

On 03.03.2022, the income tax authorities conducted a search operation at the residential premises and bank lockers of petitioner No.1 resulting in the seizure of jewellery which according to the income tax authorities was undeclared. A Panchnama dated 03.03.2022 with regard to the seized jewellery of petitioner No.1 and separate panchnama dated 05.03.2022 with regard to the seized jewellery of petitioner No.2 was prepared.

Petitioner No.1 stated before the respondent authorities that out of the seized jewellery, 901.030 grams belonged to petitioner Nos. 3 and 4 and the remaining seized jewellery was that of petitioner Nos. 1 and 2, who were husband and wife and that the jewellery of petitioners No.1 and 2 was wedding jewellery; received by way of inheritance; gifts and that some of it had also been purchased by petitioner Nos. 1 and 2. 4. Through assessment order dated 28.03.2024, the stand of petitioner No.1 with regard to 901.030 grams of the seized jewellery belonging to petitioner Nos. 3 and 4 was accepted because such jewellery was found to have been duly declared by petitioner No.4 in the wealth tax returns 7iled much prior to the search operation at the residential premises and bank lockers of petitioner No.

In the meanwhile, petitioner Nos. 3 and 4 7iled a representation with the respondent authorities for release of 901.030 grams of the seized jewellery. It was explained by petitioner Nos. 3 and 4 that the said jewellery was duly declared by petitioner No.4 in the wealth tax returns 7iled for the assessment year 2012-2013 and that such jewellery also found reference in the assessment order dated 18.12.2019 passed under Section 63 of the Wealth Tax Act, 1957. 6. On 29.04.2024, petitioner No.1, through his Chartered Accountant, also wrote to the income tax authorities seeking release of the remainder of the seized jewellery which, through assessment order dated 28.03.2024, had been added to petitioner No.1’s income. When such representation was not responded to, the same request was repeated through subsequent representations dated 03.05.2024, 08.07.2024 and 09.09.2024. 7. In response to petitioner No.1’s afore request, through letter dated 19.11.2024/ 03.12.2024, the of7ice of the Principal Commissioner of Income Tax (Central), Gurugram wrote to the Joint Commissioner of Income Tax, Central Range, Chandigarh, asking the latter to follow the procedure prescribed under the circular of the CBDT dated 16.10.2023 only after which petitioner No.1’s seized jewellery could be released to him. GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

As per the circular of the CBDT dated 16.10.2023, for seeking release of seized assets, including jewellery, an assessee is required to unconditionally accept its ownership as well as its reassessed market value; before that, to assess the present market value, the Assessing Of7icer is required to get the valuation done of the seized jewellery from an approved valuer and that the Assessing Of7icer and Range Head are also required to furnish their recommendations regarding release of the seized jewellery against furnishing of a bank guarantee.

In pursuance to the aforesaid letters from the PCIT (Central), Gurugram, the seized jewellery was got valuated by the Income Tax authorities through their approved valuer. The said valuer assessed the present market value of all the 35 items of the seized jewellery which had been added to petitioner No.1’s income and intimated the same to the Income Tax authorities.

On 05.03.2025, petitioner No.1’s Chartered Accountant, wrote to the respondent Income Tax authorities seeking release of 26 jewellery items out of the 27 items which had been seized through Panchnama 1 and 7 out of the 8 jewellery items seized through Panchanama 2. The respondent authorities were further informed on behalf of petitioner No.1 that the present market value of these jewellery items, as per the valuation done by the respondents’ valuer was Rs.1,20,12,074/- and since petitioner No.1 had already submitted with the respondent authorities a bank guarantee for Rs.1.25 crore, the said seized jewellery items be released without delay. GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

Apparently, after verifying the contents of the aforesaid representations made on behalf of petitioner No.1, through letter dated 21.03.2025, the Income Tax Of7icer, Headquarter (Central), Gurugram wrote to the Additional Commissioner of Income Tax, Central Range, Chandigarh conveying the approval of the Principal Commissioner of Income Tax (Central), Gurugram for release of the seized 26 jewellery items out of Panchnama No.1 and 7 jewellery items out of Panchnama No.2 cumulatively valued at Rs.1,20,12,074/- against the bank guarantee for Rs.1.25 crores already furnished by petitioner No.

Thereafter, on 08.04.2025, the Joint Commissioner of Income Tax (O ), Central Circle-I, Chandigarh wrote to the Deputy Director of Income Tax (Inv.), Investigation Wing, Parwanoo requesting him to intimate a suitable date and time to petitioner No.1 to be handed over 33 seized jewellery items against receipt. However, in terms of the letter dated 08.04.2025, no intimation was received by either of the petitioners. Instead, petitioner No.1 received the impugned letter dated 07.08.2025, requiring him now to submit a bank guarantee for Rs.1,54,10,000/- because by August, 2025 the rate of gold had increased. Petitioner No.1 was further required to submit an af7idavit consenting to the encashment of the bank guarantee and petitioner No.2 was required to 7ile an af7idavit declaring therein that the ownership of the jewellery fully vested in petitioner No.1 and that she has no objection if the said jewellery is released to petitioner No.

Learned Senior Advocate appearing for the petitioners submitted that out of the jewellery seized by the respondent authorities in connection with the search operation conducted on 03.03.2022 at the residential premises and bank lockers of petitioner No.1, 901.030 grams was that of petitioner Nos. 3 and 4 and that since such jewellery was duly declared by petitioner No.4 in the wealth tax returns 7iled for the assessment year 2012-2013 and that such jewellery also found mention in the assessment order dated 18.12.2019 passed under Section 63 of the Wealth Tax Act, 1957 as also because in the assessment order dated 28.03.2024 the same was not added in the income of petitioner No.1 there was no justi7iable reason for the respondent authorities to withhold its release.

With regard to the release of 33 out of 35 remaining seized jewellery items to petitioner No.1 it was submitted that in response to petitioner No.1’s request for release of his seized jewellery, the respondent authorities had got the said 33 seized jewellery items cumulatively valued at Rs.1,20,12,074/-; through order dated 21.03.2025 the Principal Commissioner of Income Tax (Central), Gurugram had approved the release of the afore jewellery items to GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

Per contra, learned counsel for the respondent income tax authorities submitted that so far as 901.030 grams of seized jewellery is concerned subject to petitioner Nos. 3 and 4 7iling af7idavits claiming its ownership and petitioner No.1 also 7iling of af7idavit that he has no objection to the release of such jewellery to petitioner Nos. 3 and 4 the respondent authorities have no objection to its release to petitioner Nos. 3 and 4. He further submitted that after the letters dated 21.03.2025 and 08.04.2025 by the Principal Commissioner of Income Tax (Central), Gurugram and Joint Commissioner of Income Tax (O ), Central Circle- I, Chandigarh, on account of administrative reasons the 33 seized jewellery items sought for by petitioner No.1 could not be released to him, but when in August 2025, the respondent authorities were ready to release the said seized jewellery items, the price of gold had increased GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

At the outset, it would be apposite to refer to the circular dated 16.10.2023, issued by the CBDT (for short – the circular) laying down the procedure for release of assets, including jewellery, seized by the Income Tax Authorities in the course of search operations conducted by it. Clause 5 and 5.1 of the said circular, which are relevant, are reproduced below for ready reference:-

As per clause 5(a) of the circular seized assets can be released at any time and with the approval of the Principal Chief Commissioner of Income Tax/ Chief Commissioner of Income Tax or the Principal Commissioner of Income Tax/ Commissioner of Income Tax but only if the assessee unconditionally accepts its ownership as well as the valuation of the seized assets determined at the time of the search and seizure operation and makes a request in writing for release of the seized assets alongwith an unconditional and irrevocable bank guarantee valid for at least 5 years duration from a scheduled bank to the extent of the present market value of seized assets.

Clause 5.1 of the circular details the procedure to be followed for release of the seized assets. For seeking release of the seized assets the assessee is required to make a request in writing unconditionally accepting the ownership as well as valuation of the seized assets as also agreeing to pay the revaluation charges in case the release is sought for seized jewellery. Clause 5.1 (ii) of the circular requires the Principal CCIT/CCIT or Principal CIT/CIT to issue a letter to the assessee agreeing or disagreeing with the assessee’s request for release of the seized assets within 30 days of the receipt of the assessee's GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

The timelines given, as above, in the CBDT circular issued under Section 119(2) of the Income Tax Act, 1961, ensures release of the seized assets, on furnishing of adequate security by the assessee, without delay and particularly in the case of jewellery, the valuation of which remains volatile, the afore timelines also ensures predictability.

In the case in hand, out of jewellery seized by the income tax authorities, 901.030 grams is claimed by petitioner Nos. 3 and 4 regarding which the respondents have expressed no objection qua its GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

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1 Further, AO has cited relevant extract of the CBDT Instruction vide F.No. 299/06/2023-Dir (Inv-III) dated 16.10.2023 regarding release of seized assets other than cash which is as under:

2 In view of the above, the AO in letter No. 731 dated 15.01.2025 & letter No.932 dated 21.02.2025 has not reported about any other outstanding demand pending in the case of Sh. Sanjeet Singh (AQQPS7197E) (M/s Chandigarh Distillers & Bottlers Group) except as stated in para 2 above and not submitted any adverse comments on the request of the assessee to release the seized jewellery of Rs.1,20,12,074/- which have been forwarded by your office vide letter No. 3046 dated 15.03.2025. 3. In this regard, I am directed to convey the approval of the Pr. Commissioner of Income Tax (Central), Gurugram to release the seized jewellery valued at Rs.1,20,12,074/- seized from Locker at Punjab & Sindh Bank, Sector-17B, Chandigarh in the case of Sh. Sanjeet Singh (AQQPS7197E) (M/s Chandigarh Distillers & Bottlers Group) during search action u/s 132 of the Income Tax Act (D.O.S. 03.03.2022) as recommended by the AO and the Range Head in view of the fact that no adverse comments has been offered by the AO/RH against the request of the assessee in the matter. As regards the pending penalty proceedings as well as outstanding demand, the taxpayer has furnished a bank guarantee for Rs.1,25,00,000/-. The AO may go through the GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

In this connection, I am further directed to request you to kindly direct the AO concerned (i.e. DCIT, Central Circle-1, Chandigarh) to keep the original Bank guarantee in personal custody and to convey that the AO shall be personally responsible for ensuring that the Bank Guarantee is renewed in time and is handed over to his successor as part of handing over at the time of his transfer.”

A consequence of above was another letter dated 08.04.2025, addressed by the Joint Commissioner of Income Tax (O ), Central Circle-I, Chandigarh to the Deputy Director of Income Tax (Inv.), Investigation Wing, Parwanoo requiring the addressed authority to intimate a suitable time and place to petitioner No.1 so that he could come to receive the released jewellery against receipt. Relevant portion of such letter reads as follows:- “To The Deputy Director of Income Tax (Inv.), Investigation Wing- Parwanoo.

In this regard, it is submitted that a search and seizure action u/s 132 of the Income Tax Act, 1961 ("the Act") was conducted in CDBL Group of cases on 03.03.2022. During the course of search in the case of Sh. Sanjeet Singh (PAN:- AQQPS7197E), jewellery worth Rs.1,90,43,439/- was seized, which is tabulated as under:-

On receipts of the request from the subject assessee to release the seized jewellery, the same were sent to Pr. CIT(Central), Gurugram for his approval. Ld. Pr. Pr. CIT(Central), Gurugram has given the approval for release of seized jewellery of Rs 1,20,12,074/- in this case vide his office letter No. 7793, dated 21.03.2025 (copy enclosed). The details of the jewellery to be released are enclosed (letter dated 12.03.2025 sent to PCIT (Central), Gurugram, requesting for release).

It is therefore requested that a suitable date/time may please be intimated on which the assessee may be called for the completion of requisite procedure. Further, it is submitted that original receipt of deposit of jewellery in bank is required for release the jewellery, which is available with your office.”

Thus, as per the afore referred letter dated 21.03.2025 the competent authority under the circular of the CBDT dated 16.10.2023 had accepted petitioner No.1’s request for release of the seized jewellery items sought by him at the market value of the jewellery items in question, as had been determined by the respondent’s valuer, against which petitioner No.1 had also furnished adequate security in the form of a bank guarantee. That being so, in terms of the timelines given in the CBDT circular dated 16.10.2023 the 33 seized jewellery items should have been released within 15 days thereafter. Admittedly, the delay in such release is not attributed to either of the petitioners. Rather, such delay is accepted by the respondent authorities on account of “administrative reasons” which stand of theirs remains unexplained and vague, thus arbitrary. Such delay is also beyond the timelines prescribed in the CBDT circular dated 16.10.2023 which would at least be binding on the respondent authorities. Therefore, for the increase in the market GOPAL KRISHAN 2026.02.19 12:26 authenticity of this document

In the light of the above, we direct the release of 901.030 grams of jewellery to petitioner Nos. 3 and 4 but only after petitioner No.1 has furnished an af7idavit that he has no objection to such release and petitioner Nos. 3/ 4 have also 7iled af7idavit(s) claiming its ownership. So far the 33 seized jewellery items, the release of which is sought by petitioner No.1 is concerned, these jewellery items shall also be forthwith released to petitioner No.1 against the bank guarantee already furnished by him on 03.01.2025. However, before the release of such jewellery the respondent authorities shall require petitioner No.1 to 7ile an af7idavit claiming its ownership as also an af7idavit from petitioner No.2 that she has no objection to the release of such jewellery to petitioner No.1. 26. The writ petition stands allowed in the afore terms.

2026