Nation Other News 14 Jan 2021 Telangana High Court ...

Telangana High Court rebukes IT dept, orders return of Rs 5 crore seized from firm

DECCAN CHRONICLE. | VUJJINI VAMSHIDHARA
Published Jan 14, 2021, 1:15 am IST
Updated Jan 15, 2021, 2:53 pm IST
The petitioner contented that the task force had detained him and certain others on August 13, 2019, for carrying Rs 5 crore
Mectec and Vipul Kumar also filed a petition seeking release of the amount.— DC Image
 Mectec and Vipul Kumar also filed a petition seeking release of the amount.— DC Image

HYDERABAD: Pointing  to technical  flaws  and  procedural  faults by the income-tax (I-T) authorities here regarding the Rs 5 crore that were seized from a private firm, which did not have  books of accounts, the Telangana High Court directed the authorities to refund the amount to the person from whom it had been seized along with 12 per cent interest. The court also directed the I–T authorities to pay Rs 20,000 to the petitioner.

A division bench, comprising Justice M.S. Ramachandra Rao and Justice T. Amarnath Goud, was dealing with two petitions of Mectec Company and its employee Vipul Kumar Patel from Gujarat, who challenged seizing of the amount by the director of income-tax.

 

The petitioner contented that the task force had detained him and certain others on August 13, 2019, for carrying Rs 5 crore and handed him over to the I-T department four days later, only after a habeas corpus was filed for illegal detention. Mectec and Vipul Kumar also filed a petition seeking release of the amount.

The I-T department explained that it had seized the money on October 28, 2019, after conducting panchnama and issuing a search warrant under Section 132 of the I-T Act. It did not mention about where and at what time the search was conducted.

 

The police said that they had handed over Vipul Kumar, along with the seized cash, to the principal director of income-tax at Ayakar Bhavan in the city on August 27, 2019.

The court opined that there is no basis for the I-T department to invoke the provisions of Section 132, l32A and l32B of  the I-T Act since there is no ‘reason to believe’ that the assessee had violated any provision. The court said that the submission of I-T officers regarding the warrant and conducting searches was fabricated only to make out a case for retention of cash illegally.

 

The court made it clear that the I-T inspection or an investigation would be permissible only in respect of a past event but not for possible future contingencies. If the petitioner was going to disclose and explain the cash of Rs 5 crore in the I-T returns for 2019-20, there was no basis for proceeding with any coercive action against the petitioner, the court said.

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Location: India, Telangana, Hyderabad




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