NANDITA ACHARJEE Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner, Smt. Nandita Acharjee, carries on a business of money -lending under the name and style of Hindustan Mortgage Institution. The petitioner's husband, Parima Acharjee, is lecturer in Lumding College. The petitioner and also her husband are assessees under the Income -tax Office, Nagaon. Having completed the assessment of income -tax payable by the petitioner in respect of the assessment years 2000 -01, 2001 -02, 2002 -03 and 2003 -04, demand notices were issued to the petitioner on March 31, 2006. In terms of the demand notices, the petitioner was to make payment within a period of 30 days from the date of service of the notice. As the petitioner had not paid the assessed tax till May 16, 2006, a letter was issued, on May 16, 2006, by the Department concerned requesting the petitioner to pay the assessed income -tax within ten days of the receipt of the said letter. Responding to this letter, the petitioner submitted a representation, on May 29, 2006, to the Income -tax Office at Nagaon, stating, inter alia, that she had preferred an appeal against the orders of assessments aforementioned. By a letter issued, on June 30, 2006, the Income -tax Office, Nagaon, informed the petitioner that filing of appeal is not in itself a bar for realization of the income -tax. The petitioner was accordingly requested to make payment of the assessed income -tax within seven days of the receipt of the letter, dated June 30, 2006, aforementioned. The petitioner did not, however, make payment of the assessed tax. On September 26, 2006, a search operation was conducted not only at the residence -cum -business premises of the petitioner and her husband, but also at the residence of the petitioner's employee, Rajib Acharjee, and also her former employee, namely, Tapash Chanda. During the search, prohibitory orders under Section 132(3) of the Income -tax Act, 1961 (in short, 'the Act') were served on two banks, namely, Punjab National Bank, Lumding Branch, Lumding, and United Bank of India, AT Road Branch, Guwahati. During the course of the search, at the residence -cum -business premises aforementioned, books of account and several other documents were seized by the income -tax authorities. Though jewellery were found at the said premises, the same were not seized, nor was any cash seized. For the books of account/and other documents so seized, inventories were prepared. After revoking prohibitory orders aforementioned, bank lockers at the said two banks, maintained in the name of the petitioner, were also searched and several documents and valuable securities including KVPs and NSCs, found in the said lockers, were seized. From the lockers maintained at the United Bank of India, several KVPs, NSCs and other valuable securities, in the form of bond, held by the petitioner and her husband were seized. Following such search and seizure, the statements of the petitioner and her husband were recorded. In the statements, so recorded, it was admitted by the petitioner's husband that the assets held and maintained in the name of Minu Acharjee, Nibeta Acharjee and Minakshi Acharjee belong to the same person, namely, Smt. Nandita Acharjee, i.e., the writ petitioner. Rest of the assets found, at the said lockers, were either held in the name of the petitioner or in the name of the petitioner's husband, who is the constituted attorney of the petitioner in respect of her said business, which is carried on under the name and style of Hindustan Mortgage Institution.

(2.) THE petitioner, then, made representations to the authorities concerned informing them that some of the KVPs and NSCs were held by her as security for the loan advanced by her to people, who had obtained loans from her proprietary concern, namely, Hindustan Mortgage Institution, and since the payments had been made by the loanees, she was required to return the said KVPs and NSCs to those loanees, who had pledged the KVPs and NSCs with her said proprietary concern for the purpose of securing loans. During the course of the search and seizure, the petitioner declared Rs. 25,00,000 as her undisclosed income. The petitioner did not, however, make payment of income -tax for the voluntarily made disclosure of her undisclosed income.

(3.) WHILE the writ petition was pending, the petitioner applied to the Joint Commissioner of Income -tax seeking release of some of the KVPs and NSCs on the ground that those were pledged articles and as the loanees had repaid their loans, the securities, lying in the form of KVPs and NSCs, were required to be returned to the loanees. By a letter, dated May 25, 2007, the Department concerned informed the petitioner that the Department is not in a position to release the materials as these materials were required for correctly making the assessment. By this letter, dated May 25, 2007, the respondents also contended that in terms of Section 132(4A)(i) of the Act, where any books of account or other documents are found in the possession or control of any person in the course of search, it may be presumed that such documents, money, valuable articles, etc., belong to the person with whom the same were found and, consequently, when the books of account and other documents, including the KVPs, NSCs, etc. seized, either from the residence of the petitioner and her husband or from the bank lockers maintained by her and her husband jointly the Department was justified in presuming that the KVPs as well as NSCs aforementioned belong to the petitioner and her husband, though the said KVPs and NSCs may be in the name of the persons other than the petitioner and her husband. Though an additional affidavit was filed by the writ petitioner bringing on record the order, dated May 25, 2007, aforementioned, the fact remains that the writ petition was not amended. Thus, the reasons, assigned by the letter, dated May 25, 2007, declining to release the KVPs and NSCs, in question, have not been specifically impugned in the writ petition.