C S ROOPASINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner who had approached the Settlement Commission in the year, 1994, and who is a party to the order made on May 2, 1995, by that Commission complains that the recovery has been effected by the Assessing Officer without any authority of law and contrary to the terms of the Settlement Commission's order. It is his case that the fixed deposit receipts seized after search in his premises on December 20, 1990, had been retained contrary to the mandate of Section 132(8) of the Income-tax Act, 1961. It is not in dispute that the fixed deposit receipts have since been encashed by the Assessing Officer for the adjustment of the amounts against the arrears of tax, etc.

(2.) THE order of the Settlement Commission in so far as it is relevant for the purpose of this case is extracted and set out below :

(3.) COUNSEL for the petitioner submitted that the recovery of the amount from others, who held money for the benefit of the assessee as also the encashment of the fixed deposit were illegal. The encashment of the fixed deposit receipt was valid on account of the default committed by the assessee even after the order of the Settlement Commission. It was, therefore, open to the authorities to recover the amount from and out of the documents retained as also by requiring others, who held money on behalf of the assessee, to make the payment to the authorities. The complaint of counsel for the petitioner that the authorities could have waited till the assessee paid the money in instalments, though appears to be reasonable, cannot be accepted. In view of the fact that the assessee had committed default in the payment of Rs. 10 lakhs and had not come forward to pay the amounts in instalments, the recovery effected by the Assessing Officer cannot be held to be illegal. The stand of the assessee appears to have been that the fixed deposit receipts and other documents should not have been returned and it is only after their return, the assessee would have become liable for the payment of the amounts directed to be paid by the Settlement Commission. The obligation to pay the money was not postponed till such time the documents were returned. The retention of the documents was done in a manner which was in accordance with law. The retention also did not result in the assessee being relieved from the obligation to pay the amounts required to be paid under the Settlement Commission's order.