SOUMIL SINGHAL & ORS. vs. INCOME-TAX OFFICER & ANR.

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W.P.(C)/14938/2024HC DelhiDLHC01073088202424 February 2025Bench: HON'BLE CHIEF JUSTICE DEVENDRA KUMAR UPADHYAYA,HON'BLE MR. JUSTICE TUSHAR RAO GEDELA3 pages
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What did the High Court hold?

The Delhi High Court, by order dated February 24, 2025, allowed the writ petition. The Court bound the Revenue to the statement made by its learned Junior Standing Counsel. The Revenue was directed to process the case of the petitioners subject to the verification of the exact amount standing in their account and in accordance with law. Furthermore, the Court directed that applicable interest, in accordance with the provisions of the Income Tax Act, 1961, accruing in favour of the petitioners, shall also be released simultaneously. The petition was disposed of with these directions. A subsequent order on July 29, 2025, noted that the order of February 24, 2025, had not been complied with, and the Revenue assured compliance by August 14, 2025, leading to the closure of the petition with liberty to revive it if compliance was not met.

What were the facts?

The petitioners, Soumil Singhal & Ors., filed a writ petition before the Delhi High Court seeking directions for the release of amounts seized from their bank accounts under Section 132(3) of the Income Tax Act, 1961. The seizure occurred during a search and seizure operation on October 21, 2003. The petitioners contended that the funds were illegally seized and have not been refunded. The Revenue, represented by learned Junior Standing Counsel, stated that in view of a similar order passed in Pooja Singhal vs. Income Tax Officer Ward 34(1), Delhi & Anr. (W.P.(C) 12113/2022), the case could be processed subject to verification of the exact amount and adjustment of outstanding demands. The Court, on February 24, 2025, directed the Revenue to process the petitioners' case in accordance with law and release applicable statutory interest.

What were the issues?

1. Whether the Revenue should be directed to release amounts seized from the petitioners' accounts under Section 132(3) of the Income Tax Act, 1961, along with statutory interest, when the seizure occurred in 2003 and the funds have not been refunded. Assessee's Contention: The funds were illegally seized in 2003 and have not been refunded till date. The petitioners seek the release of these seized amounts along with statutory interest. Revenue's Contention: On instructions, the Revenue submitted that in view of a similar order passed in Pooja Singhal vs. Income Tax Officer Ward 34(1), Delhi & Anr. (W.P.(C) 12113/2022), the case of the petitioners can be processed subject to the verification of the exact amount standing in their account and adjustments of outstanding demands, if permissible and in accordance with law.

Which sections of the Income-tax Act were involved?

Section 132(3)

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$~65 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14938/2024

SOUMIL SINGHAL & ORS. .....Petitioners Through: Mr Manuj Sabharwal, Mr Drona Negi and Mr Devvrat Tiwari, Advocates.

versus

INCOME-TAX OFFICER & ANR. .....Respondents Through: Mr Indruj Singh Rai, SSC, Mr Sanjeev Menon and Mr Rahul Singh, JSCs, Mr Gaurav Kumar and Mr Tanishq Ahuja, Advocates

CORAM:

HON'BLE MR. JUSTICE V. KAMESWAR RAO

HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

29.07.2025 1. On 24.02.2025, following order was passed:- “1. Present petition has been filed seeking a direction to the respondents- Revenue for the release of amounts seized from accounts of the petitioners under Section 132(3) of the Income Tax Act, 1961 (hereafter the Act), which has been lying with the respondents-Revenue since 2003, alongwith statutory interest. 2. Learned counsel for the petitioner states that the amounts in question were seized from the bank accounts of the petitioners during the search and seizure operation conducted on 21.10.2003. It is the contention of the learned counsel that the funds were illegally seized by the respondents- Revenue in 2003 and have not been refunded till date to the Petitioners. 3. Earlier, on 23.10.2024, while issuing notice This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 05/08/2025 at 12:14:43

on the present petition, this Court has directed the learned counsel appearing for the Revenue to seek instructions regarding the grievance raised in the present petition. 4. Today, Mr. Sanjeev Menon, learned Junior Standing Counsel for the respondents-Revenue appears and on instructions submits that in view of the order dated 19.09.2022 passed in W.P.(C) 12113/2022 captioned “Pooja Singhal vs Income tax Officer Ward 34(1), Delhi & Anr.”, annexed herewith as Annexure – P-22, stated to have been filed by family member of the petitioners, this Court may pass similar orders. Learned Junior Standing Counsel on instructions submits that the case of the petitioners can be processed subject to the verification of the exact amount standing in their account and adjustments of outstanding demands if permissible, and in accordance with law. 5. Binding the Revenue to the statement made by the learned Junior Standing Counsel, we allow the present writ petition in terms of order dated 19.09.2022 passed in W.P.(C) 12113/2022 captioned “Pooja Singhal vs Income tax Officer Ward 34(1), Delhi & Anr.” of this Court, by directing the Revenue to process the case of the petitioners subject to the verification of the exact amount standing in their account, in accordance with law. 6. We also direct that applicable interest, in accordance with the provisions of the Income Tax Act, 1961, accruing in favour of the petitioners shall also be released simultaneously. 7. The present petition stands disposed of in above directions alongwith pending applications, if any. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 05/08/2025 at 12:14:43

8.

List for compliance on 19.05.2025.”

2.

Since this petition was listed for compliance and it is the case of the petitioner that the order dated 24.02.2025, had not been complied with, and Mr. Sanjeev Menon, learned Junior Standing Counsel, on instructions, states that the order shall be complied with, on or before 14.08.2025, by taking the said submission on the record, the petition having been disposed of, is closed. We grant liberty to the petitioner, in case the order dated 24.02.2025 is not complied with on or before 14.08.2025, to file application for revival of the petition.

V. KAMESWAR RAO, J

VINOD KUMAR, J JULY 29, 2025 M

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 05/08/2025 at 12:14:43

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