TMI Blog2020 (2) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Commissioner of Income Tax, Chennai who may himself decide or nominate a senior officer from the department to investigate the case. The 1st and the 2nd petitioners along with 3rd and 4th petitioners and the 4th respondent may thereafter file appropriate written submission together with evidence in support of this case before the Chief Commissioner of Income Tax or any other senior officer of the Income Tax Department who may be nominated by the Chief Commissioner of Income Tax, Chennai for the aforesaid purpose. It is for the said officer to conclude as to whether the 1st petitioner and/or the 4th respondent or both can claim ownership over the seized gold bullion and jewellery which was seized from the 4th petitioner by the 2nd respondent on 01.07.2016. If on further investigation such officer comes to a conclusion that the explanation offered by the 1st and 2nd petitioners along with the 4th petitioner and 4th respondent are unsatisfactory, appropriate steps shall be thereafter taken in accordance with law. On the other hand, if on enquiry it is concluded that the 1st petitioner or the 4th respondent are indeed the owner of the seized gold bullion and jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent and consequently direct the 2nd respondent to release the gold bullion and jewellery seized vide Panchanama dated 01.07.2016 by the 2nd respondent to the custody of the 1st petitioner and also to pay interest in accordance with Section 132B of the Income Tax Act, 1961. Brief facts of the case as follows:- 3.About 18043.960 g of fine gold (Bullion) and about 1765.45 g of used gold ornaments ostensibly meant for manufacturing repair and polishing were seized from the custody of the 4th petitioner in the early hours of 01.07.2016, at the Netaji Subash Chandra Bose International Airport, Kolkata by the officers under the 2nd respondent. 4.The aforesaid seizure took place when the 4th petitioner disembarked from a flight from Chennai and was about to leave the airport. It appears that on receipt of specific intelligence from the officers of the 1st respondent at the Chennai Kamaraj International Airport, the officers of the 2nd respondent seized the aforesaid quantity of gold from the 4th petitioner. 5.The aforesaid seizure was purportedly made by the officers under the 2nd respondent under Section 132 of the Income Tax Act, 1961. Statement was also recorded fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose and 1765.450 g of gold jewellery for repair and polishing purpose. The 3rd petitioner represented by the 4th petitioner and therefore it cannot be treated as undisclosed income of the 4th petitioner. 11.In the course of the event, notice under Section 274 read with Section 271 AAB Of the Income Tax Act, 1961 was also issued to the 4th petitioner stating that pursuant to search that was conducted the said petitioner and that he was found to have undisclosed income and therefore 4th petitioner was called for a hearing on 30.1.2019 to show cause as to why an order imposing a penalty should not be made under Section 271 AAB of the Income Tax Act, 1961. 12.On 31.12.2018 an assessment order was passed by the 5th respondent for the Assessment Year 2017-18 assessing the 4th petitioner of undisclosed income of ₹ 6,41,92,737/-. The 5th respondent has extracted the statements of the petitioners and the 4th respondent to conclude that the 4th respondent had purportedly issued a invoice dated 04.07.2016 whereas part of gold in question was seized from the possession of the 4th petitioner on 01.07.2016 and therefore the sale which has taken place on 04.07.2016 could not form par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espite information recorded from both the 1st and 2nd petitioners and furnishing of details which clearly established that the seized goods were handed over by the 1st petitioner to the 2nd petitioner who in turn sub-contracted the work to the 4th petitioner and was given the seized gold for the purpose of manufacture and polish/repair only. 20.It is therefore submitted that the 2nd respondent ought not to have effected seizure and the 5th respondent ought not to have treated the seized gold as formally part of undisclosed income of the 4th petitioner. It is submitted that even if the respondents had doubts about the claim of the 1st and 2nd petitioners, the seized gold ought to have been sent to the jurisdictional Income Tax Officers at Chennai within whose jurisdiction the 1st and the 2nd petitioners are assessees and their incomes were being regularly assessed. 21.Opposing the writ petition, the learned counsel for the respondents submits that the writ petition is without jurisdiction in as much as the entire cause of action has arisen Kolkata and therefore outside the jurisdiction of this court. He therefore submits that the writ petition ought to have been dismissed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 SCC OnLine Del 92. xii. Union of India Vs. Ajit Jain and Another , 2003 (260) ITR 80. xiii. Dimondstar Exports and Others Vs. Director General of Income Tax (Investigation) and Others , 2004 SCC OnLine Bom 1255. xiv. Sterling Agro Industries Ltd. Vs. Union of India and Others , 2011 (122) DRJ 693 (FB). xv. Sterling Agro Industries Ltd. Vs. Union of India and Others , 2011 (124) DRJ 633 (FB). xvi. Vishnu Security Services Vs. Regional Provident Fund Commissioner , 2012 (129) DRJ 661 (DB). xvii. Sonu Sardar Vs. The Union of India and Another , 2016 SCC OnLine Del 6206. xviii. M/s. Venkata Sai Ram Traders Vs. The customs, Central Excise Service Tax Settlement Commission , 2017 SCC OnLine Mad 37515. xix. Additional Commissioner of Income Tax Vs. S.Pichaimanickam Chettiar , 1982 SCC OnLine Mad 257. xx. Commissioner of Income Tax Vs. Mrugesh Jaykrishna , 1999 SCC OnLine Guj 415. xxi. Commissioner of Income Tax, Delhi Vs. Anoop Jain , 2019 SCC OnLine Del 9718, xxii. Firm Kaura mal Bishan Dass Vs. Firm Mathra Dass Atma Ram, Ahmedabad and Others , 1959 SCC OnLine P H 2. xxiii. Smt. Shakuntala Devi Vs. Banwari Lal and Others , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and were handed over to the 4th petitioner only for the aforesaid purpose. Thus, the official respondents can no longer rely on presumption under Section 292C of the Income Tax Act, 1961. The 5th respondent also cannot deem the seized gold as that of the 4th petitioner for the purpose of Section 69 of the Income Tax Act, 1961. 33.Therefore, the 2nd respondent was not justified in seizing the gold bullion/jewellery from the custody of the 4th petitioner on 01.07.2016. The 5th respondent was also not justified in concluding that the seized gold/jewellery was undisclosed income of the 4th petitioner in terms of Section 69A of the Income Tax Act, 1961. Only question therefore to be answered is whether this court can exercise jurisdiction and interfere with the seizure effected by the 2nd respondent at Calcutta on 01.07.2016 and quash the consequential assessment order passed by the 5th respondent holding the explanation offered by the 4th petitioner as unsatisfactory to tax as income from undisclosed source? 34.Admittedly, the 4th petitioner had carried the gold bullion and jewellery from Chennai on 30.06.2016 and seizure was effected by the officers of the 2nd respondent on 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of gold jewellery. 41.If the 1st respondent had any doubts regarding the ownership, he should have detained the 4th petitioner and effected a seizure at the Chennai Airport before the 4th petitioner boarded the flight. Instead, after the 4th petitioner was airborne to Kolkatta, he informed the 2nd respondent. Merely because the seizure was effected at Kolkata by itself is not a sufficient ground to conclude that this court will have no jurisdiction to pass appropriate orders as the basis of the seizure itself is on account of tip off/exchange of intelligence by the officers located at the Chennai Kamaraj International Airport. The fact that ownership is claimed by persons located in Chennai, also shows that investigation should have been transferred over to the officers in Chennai by the 2nd respondent. 42.Further, to exercise the power to search and seize under Section 132(1)(c) of the Income Tax Act, 1961, an officer concerned has to form a subjective opinion that gold bullion/jewellery either represents wholly or partly income or property which has not been, or would not be disclosed in the return. If the seized gold were transferred to the 1st respondent, the 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nothing either in Section 132 or any other provision of the Act to indicate that the presumption provided under Section 132 which is a self-contained code for search and seizure and retention of books, etc. can be raised for the purposes of framing of the regular assessment as well. Wherever the legislature intended the presumption to continue, it has provided so. Reference may be made to Section 278-D of the Act which provides that where during the course of any search under Section 132, any money, bullion, jewellery or other valuable articles or things or any books of account, etc. are tendered by the prosecution in evidence against the person concerned, then the provisions of sub-section (4-A) of Section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents. This clearly spells out the intention of legislature that wherever the legislature intended to continue the presumption under sub-section (4- A) of Section 132, it has provided so. It has not been provided that the presumption available under Section 132(4-A) would be available for framing the regular assessment under Section 143 as well. 26 [Ed.: Para 26 corrected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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