TMI Blog2024 (1) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... fiscated/seized - HELD THAT:- The provisions of Section 132B of the Income Tax Act, 1961 inter alia provides for application of seized and requisitioned assets which provides that the assets seized may be dealt with in the manner provided therein, whereby, the amount of any existing liability and the amount of liability determined on completion of the assessment may be recovered out of such assets, however, such power is, thereafter, governed by two provisos A bare look at the first proviso would reveal that on an application made for release of the assets while indicating the source of acquisition of such assets, after adjusting the liability, remaining portion of the assets has to be released. The second proviso indicates that such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious representations made for release of assets, which action cannot be countenanced. Respondents despite release of the seized currency are free to make the determination of the show cause notice, qua which no relief has been claimed presently. Action of the respondents in not releasing the seized assets of the petitioners is essentially in violation of Section 132B of the Act, 1961, which is applicable in terms of Section 37(3) of the FEMA, 1999 and, therefore, the inaction of the respondents in this regard cannot be sustained. Petition is partly allowed. The respondents are directed to pass appropriate orders for release of the seized assets pursuant to the search conducted on 14/3/2019 within a period of four weeks from today. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and seizure conferred on the Directorate of Enforcement is under Section 37 of the Foreign Exchange Management Act, 1999 ( FEMA, 1999 ) which inter alia provides that the officers shall exercise powers which are conferred on Income Tax authorities under the Income Tax Act, 1961 ( the Act, 1961 ) and shall exercise such powers subject to such limitations laid down under the said Act. Under the Act, 1961 search and seizure provisions are contained under Section 132 of the Act, 1961 and application of seized or requisitioned assets is dealt with under Section 132B of the Act, 1961. It was submitted that besides the fact that under proviso to Section 132 (1)(c)(B) (iii) stock-in-trade of the business could not have been seized and that the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been issued to the petitioners to which reply has been filed and respondents are in the process of adjudicating the same and, therefore, the petition deserves dismissal. However, it was not denied that several representations made by the petitioners seeking release of the seized currency were made in the year 2019 and 2020, which have not been responded to / decided by the authorities. 8. We have considered the submissions made by leaned counsel for the parties and have perused the material available on record. 9. The fact of search conducted by the authorities of Directorate of Enforcement and consequent seizure of Indian currency/Foreign currency are not in dispute. It is also not in dispute that the petitioners inter alia are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose custody the assets were seized: Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed; 12. A bare look at the first proviso would reveal that on an application made for release of the assets while indicating the source of acquisition of such assets, after adjusting the liability, remaining portion of the assets has to be released. 13. The second proviso indicates that such asset or any portion thereof shall be released within a period of 120 days from the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representations made for release of assets, which action cannot be countenanced. 18. The respondents despite release of the seized currency are free to make the determination of the show cause notice, qua which no relief has been claimed presently. 19. In view of the above discussion, the action of the respondents in not releasing the seized assets of the petitioners is essentially in violation of Section 132B of the Act, 1961, which is applicable in terms of Section 37(3) of the FEMA, 1999 and, therefore, the inaction of the respondents in this regard cannot be sustained. 20. Consequently, the petition is partly allowed. The respondents are directed to pass appropriate orders for release of the seized assets pursuant to the search ..... X X X X Extracts X X X X X X X X Extracts X X X X
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