Search and seizure – Retention of seized articles – Section 132A – A. Y. 2012-13 – IT authorities requisitioning silver articles of assessee from railway police for purpose of investigation – Assessment order taking note of such seizure but no addition on account of seized articles – IT authorities to hand over seized articles to assessee

The railway police seized silver ornaments from the authorised person of the assessee and registered a case u/s. 124 of the Bombay Police Act. The Railway police informed the Income-tax Department about seizure of the silver ornaments pursuant to which the Income-tax Department requisitioned the ornaments for the purpose of investigation under the provisions of the Income-tax Act, 1961. Assessment order took note of the seizure but no addition was made on that count. Assessee’s applications for release of the articles were ignored.

The Gujarat High Court allowed the writ petition and held as under:

“i) The silver ornaments weighing 219.841 kgs. were requisitioned by the Income-tax Authorities in exercise of the powers of section 132A in the F. Y. 2011- 12. Thereafter the assessment was framed by the Assessing Officer of the assessee for the A. Y. 2012-13, whereby after taking note of such requisition made by the authorities, the return as filed by the assessee was accepted without making any addition on account of such seizure.

ii) Under the circumstances, without entering into the merits of the validity of the authorisation issued u/s. 132A and in view of the assessment order made in the case of the assessee, the Income-tax Authorities could no longer continue with the seizure of the ornaments and the seized ornaments were required to be returned to the assessee.

iii) The respondent authorities are directed to forthwith hand over the seized silver ornaments to the petitioner within a period of four weeks from today.”