Fatema Hussain / Zakir Hussain v. The Union of India / Department of Income-tax / The CIT / The DDIT(I) / The DCIT / The ACIT/The ITO
[Citation -2017-LL-0518-62]

Citation 2017-LL-0518-62
Appellant Name Fatema Hussain / Zakir Hussain
Respondent Name The Union of India / Department of Income-tax / The CIT / The DDIT(I) / The DCIT / The ACIT/The ITO
Court HIGH COURT OF PATNA
Relevant Act Income-tax
Date of Order 18/05/2017
Judgment View Judgment
Keyword Tags existing liability
Bot Summary: The petitioners were issued with summons vide Annexure-5 on 24.03.2014 and immediately on 12.05.2014 the petitioners appeared before the authority in pursuance to the said notice and it is stated that the documents and explanation with regard to the amount was submitted. Except for contending that the aforesaid liabilities are to be discharged by the petitioners and the assessment for the year 2015- Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 3/6 2016 is pending, there is no explanation from the Department for retaining the amount. On analyzing the aforesaid provision, it is clear that the amount seized under Section 132 can be utilized for the purpose of discharging the liability already determined on completion of the Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 4/6 assessment proceedings and if that be the position then at best the amount that could be retained for discharging the liability will only be with regard to the assessment made in this particular case for the assessment year 2002-2003, 2003-2004 and 2004-2005 as admitted by the petitioners in the rejoinder to the counter affidavit. On going through the statutory provisions, as are detailed hereinabove, it is crystal clear that the amount seized can only be utilized for the purpose of discharge of liability with regard to tax liability already determined and not paid by the assessee and for nothing more. Apart from the aforesaid, no further amount can be retained by the petitioners as the provisions to sub section of Section 132B clearly indicates what we have been stated hereinabove, which reads as under : Any assets or proceeds thereof which remain after the liabilities referred to in clause of sub-section are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized. Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 5/6 That being the position, we are of the considered view that with regard to the amount in question, at best the respondents can retain the amount so far as it pertains to discharge of tax liability of the petitioners for the year 2002-2003. The amount of interest shall be paid within a period of two months from the date the entire amount is refunded.


IN HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.7587 of 2016 1. Fatema Hussain Wife of Zakir Hussain, resident of 68, South Gandhi Nagar, Boring Road, P.S.- Srikrishnapuri, Patna- 800001 2. Zakir Hussain, Son of Late Wazir Hussain Khan, resident of 68, South Gandhi Nagar, Boring Road, P.S.- Srikrishnapuri, Patna- 800001 Petitioner/s Versus 1. Union of India through Secretary, Ministry of Finance, North Block, New Delhi 2. Department of Income Tax, Government of India, through Commissioner of Income Tax, Central Revenue Building, Patna 3. Commissioner of Income Tax, Central Revenue Building, Patna 4. Deputy Director of Income Tax (Investigation), Unit-I (3), E-2, A.R.A. Centre, Jhandewala Extension, New Delhi 5. Income Tax Officer (Investigation), Unit-I (1), E-2, A.R.A. Centre, Jhandewala Extension, New Delhi 6. Deputy Commissioner of Income Tax, Central Revenue Building, Patna 7. Assistant Commissioner of Income Tax, Central Revenue Building, Patna Respondent/s Appearance : For Petitioners : Mr. A.K. Rastogi, Advocate Mr. Suraj Samdarshi, Advocate Mr. Sushil Kr. Singh, Advocate For Income Tax : Mr. Rishi Raj Sinha, Sr. Standing Counsel Mrs. Archana Prasad, Jr. Standing Counsel CORAM: HONOURABLE CHIEF JUSTICE and HONOURABLE MR. JUSTICE SUDHIR SINGH ORAL JUDGMENT (Per: HONOURABLE CHIEF JUSTICE) Date: 18-05-2017 Facts on record go to show that on 21.03.2014 when Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 2/6 petitioners were carrying sum of Rs.30 lacs in New Delhi purportedly having received it as certain sale proceeds, authorities of income tax department at New Delhi seized amount and thereafter when amount was not released and no action was taken for period of about two years, this writ petition has been filed. In meanwhile, petitioners were issued with summons vide Annexure-5 on 24.03.2014 and immediately on 12.05.2014 petitioners appeared before authority in pursuance to said notice and it is stated that documents and explanation with regard to amount was submitted. Thereafter, when nothing was done, petitioners filed this writ petition and sought for release of amount in question. On notice being issued Department authorities have filed counter affidavit and that only justification for retaining amount is one, contained in para 8 of counter affidavit, which for sake of convenience is reproduced herein under : 8. That it is stated that demand is pending against assessee amounting to Rs.21,755/- for A.Y. 2002-03, Rs.62,860/- for A.Y. 2003-04 and Rs.17,111/- for A.Y. 2004- 05. Further, assessment is pending for A.Y. 2015-16. amount will be released after adjustment of due tax. Except for contending that aforesaid liabilities are to be discharged by petitioners and assessment for year 2015- Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 3/6 2016 is pending, there is no explanation from Department for retaining amount. Even if entire liability as indicated for year 2002-2003 and 2003-2004 are taken note of, it would not be beyond 85,000/- rupees. statutory provision under Income Tax Act of 1961 for dealing with issue in question is under sub- section (1) to Section 132B, which provides that when asset like one is seized under Section 132B, procedure for dealing with it is contained in sub-section (i) of aforesaid Section, which reads as under : (i) amount of any existing liability under this Act, Wealth-tax Act, 1957 (27 of 1957), Expenditure-tax Act, 1987 (35 of 1987), Gift-tax Act, 1958 (18 of 1958), and Interest-tax Act, 1974 (45 of 1974), and amount of liability determined on completion of assessment [under section 153A and assessment of year relevant to previous year in which search is initiated or requisition is made, or amount of liability determined on completion of assessment under Chapter XIVB for block period, as case may be] (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, may be recovered out of such assets. On analyzing aforesaid provision, it is clear that amount seized under Section 132 can be utilized for purpose of discharging liability already determined on completion of Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 4/6 assessment proceedings and if that be position then at best amount that could be retained for discharging liability will only be with regard to assessment made in this particular case for assessment year 2002-2003, 2003-2004 and 2004-2005 as admitted by petitioners in rejoinder to counter affidavit. Apart from aforesaid, merely because assessment for year 2015-2016 is pending, no statutory right is available to Department to retain any amount on this count. On going through statutory provisions, as are detailed hereinabove, it is crystal clear that amount seized can only be utilized for purpose of discharge of liability with regard to tax liability already determined and not paid by assessee and for nothing more. In this case, Department is only entitled to retain amount of tax determined, as contained in para 8 of counter affidavit, i.e. tax liability for assessment year 2004-2005 as admitted by petitioners. Apart from aforesaid, no further amount can be retained by petitioners as provisions to sub section (3) of Section 132B clearly indicates what we have been stated hereinabove, which reads as under : (3) Any assets or proceeds thereof which remain after liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to persons from whose custody assets were seized. Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 5/6 That being position, we are of considered view that with regard to amount in question, at best respondents can retain amount so far as it pertains to discharge of tax liability of petitioners for year 2002-2003. 2003-2004 and 2004-2005, out of which according to petitioners showing for assessment year 2002-2003 and for year 2004-2005 certain amount has already been paid by them as is detailed in para 5 of their rejoinder along with documents Annexures 8/A and 8/B. In view of aforesaid, we are very clear in our mind that amount of Rs.30 lacs retained by Department cannot be permitted any further. They are liable to return same after adjusting liability for years 2002-2003 and 2004-2005 that also after causing enquiry with regard to amount already paid by petitioners as deailed in para 5 of rejoinder. remaining amount should be returned back to petitioners after causing enquiry with regard to averments made in para 5 of rejoinder within period of one month from date of receipt of copy of this order. That apart for amount to be released to petitioners after such detention respondents shall also pay interest to petitioners as provided under sub section 4A of Section 132B to be calculated in accordance with law. amount of interest shall be paid within period of two months from date entire amount is refunded. Patna High Court CWJC No.7587 of 2016 dt.18-05-2017 6/6 amount be refunded to petitioners within period of 30 days from date of presentation of copy of this order. With aforesaid, writ petition stands allowed and disposed of. (Rajendra Menon, CJ) (Sudhir Singh, J) Narendra/- AFR/NAFR N.A.F.R. CAV DATE N.A. Uploading Date 24.05.2017 Transmission Date Fatema Hussain / Zakir Hussain v. Union of India / Department of Income-tax / CIT / DDIT(I) / DCIT / ACIT/The ITO
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