ANIL KUMAR TALWAR vs. CENTRAL BOARD OF DIRECT TAXES AND OTHERS

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CWP/26819/2021HC Punjab & HaryanaPHHC01122255202125 January 2023Bench: MS. JUSTICE RITU BAHRI,MRS. JUSTICE MANISHA BATRA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition, setting aside the orders dated 20.09.2021 and 21.09.2021 passed by the PCIT (Central), Ludhiana. The Court reasoned that the assessment order dated 27.05.2021 had, in effect, attained finality because the petitioner had deposited the entire tax demand and the revenue had not exercised any revisional powers or issued any notice against the said assessment order. The Court noted that the release of jewellery for the purpose of a marriage would not serve any purpose for the department. Therefore, the respondent-department was directed to release the entire jewellery of the petitioner within two weeks from the date of the order. The Court did not expressly leave any issue undecided.

What were the facts?

The petitioner, Anil Kumar Talwar, filed his return for AY 2017-18 on 17.10.2017. A search by the Directorate of Enforcement on 27.12.2016 led to the seizure of cash and jewellery. A notice under Section 153-A was issued on 18.01.2019. The Assessing Officer, vide order dated 27.05.2021, assessed the petitioner's income at Rs.80,99,990/-, making additions of Rs.30,99,600/- under Section 69-A for unexplained jewellery and Rs.28,39,000/- under Section 69-C for undisclosed payments. The total demand was Rs.68,81,323/-, which the petitioner deposited. The petitioner appealed the assessment order and subsequently applied for the release of seized jewellery. The PCIT (Central), Ludhiana, rejected this application on 20.09.2021, citing the pending appeal and the potential evidentiary value of the jewellery.

What were the issues?

1. Whether the Principal Commissioner of Income Tax (PCIT) erred in rejecting the petitioner's application for the release of seized jewellery, despite the entire assessed tax demand for AY 2017-18 having been deposited by the petitioner and the revenue not having exercised any revisional powers against the assessment order. Assessee's Contention: The petitioner argued that since the entire tax demand for AY 2017-18 had been deposited and the revenue had not initiated any revisional proceedings against the assessment order dated 27.05.2021, the assessment order had attained finality. Therefore, the seized jewellery, which was the subject of the additions, should be released, especially as it was needed for a marriage. The petitioner relied on the fact that the revenue had accepted the assessment order. Revenue's Contention: The revenue, through the PCIT's order, rejected the release of jewellery on the grounds that the petitioner's appeal against the assessment order was pending and had not attained finality. The revenue also contended that the seized jewellery might hold evidentiary value crucial for the appellate proceedings.

Which sections of the Income-tax Act were involved?

Section 153-A, Section 69-A, Section 69-C

AI-generated summary — verify with the full judgment below

CWP-26819-2021 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-26819-2021 Date of decision:- 25.01.2023 Anil Kumar Talwar ....Petitioner vs. Central Board of Direct Taxes and others ...Respondents CORAM: HON'BLE MS. JUSTICE RITU BAHRI HON'BLE MRS. JUSTICE MANISHA BATRA Present: Mr. Pankaj Jain, Sr. Advocate assissted by Mr. Divya Suri, Advocate and Mr. Sachin Bhardwaj, Advocate for the petitioner. Ms. Pradhi Jaswinder Sandhu, Advocate for the respondent-deparment. *** Ritu Bahri, J. (Oral) The present petition has been filed seeking a writ of certiorari for quashing of order dated 20.09.2021 (Annexure P-9) and order dated 21.09.2021 (P-10) passed by PCIT (Central), Ludhiana rejecting the request of the petitioner for release of jewellery. Brief facts of the case are that the petitioner-assesse has filed his return of Income for the Assessment Year 2017-18 on 17.10.2017 declaring income of Rs.21,61,390/-. A search was conducted by the Directorate of Enforcement at the residential premises of the petitioner- assessee on 27.12.2016 and cash and jewellery was seized in the said action. A notice under Section 153-A of the Income Tax Act, 1961 (for short 'Act 1961') was issued on 18.01.2019. Vide assessment order dated 27.05.2021 (P-1), the petitioner's income was assessed at Rs.80,99,990/- under Section 153-A of Act 1961 whereby Assessing Officer made the additions of GAURAV ARORA 2023.01.30 15:06 I attest to the accuracy and integrity of this document

CWP-26819-2021 2 Rs.30,99,600/- under Section 69-A of Act 1961 qua unexplained jewellery (ii) Rs.28,39,000/- under Section 69-C of Act 1961 qua undisclosed payments not recorded in books of accounts since sources of such expenditure have not been disclosed. The net weight of gold jewellery came out to be 1957 grams and out of which, benefit of 850 grams of gold was found to be reasonably allowed (Sh. Anil Talwar-Male-100 grams), Smt. Rakesh Talwar-Wife-500 grams and Ms. Anshit Talwar unmarried 250 grams). Thus, the total demand came out to be Rs.68,81,323/-. In pursuance of the demand for the assessment year 2017-18, a sum of Rs..68,81,323/- was deposited by the petitioner. Thereafter, the petitioner went in appeal against the order of assessment and during the pendency of the appeal, he filed an application seeking release of jewellery, which was seized during search but the application was dismissed on 20.09.2021 (P-9) on the ground that the appeal of the petitioner is pending and the same has not attained finality and release of jewellery, even after payment of tax, cannot be done as the same may have evidentiary values which may be one of the cruicial deciding factos in appeallate proceedings, till finality of the case. Today, on a specify query put by this Court to learned counsel for the respondent that whether any revisional powers were exercised by the respondent, pursuant to assessment order dated 27.05.2021 (P-1), she replied in 'No'. She stated that no notice has been given to the assessee till date. Thus, the Revenue-department has accepted the order passed by the Assessing Officer on 27.05.2021. Further it is also not in dispute that the petitioner had deposited the entire tax, as assessed by the Assessing Officer. GAURAV ARORA 2023.01.30 15:06 I attest to the accuracy and integrity of this document

CWP-26819-2021 3 The release of jewellery on account of marriage of the daughter of the petitioner, will not serve any purpose for the department. Thus, the assessment order has attained finality. In view of the above factual position, the writ petition is allowed and order dated 20.09.2021 (Annexure P-9) and order dated 21.09.2021 (P-10) passed by PCIT (Central), Ludhiana are set aside. The respondent-department shall release the entire jewellery of the petitioner within a period of two weeks from the date of passing of this order. (RITU BAHRI) JUDGE 25.01.2023 (MANISHA BATRA) G Arora JUDGE Whether speaking/reasoned : Yes/No Whether reportable : Yes/No GAURAV ARORA 2023.01.30 15:06 I attest to the accuracy and integrity of this document

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