BIMLA SINGH Vs. CHIEF COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY means of this petition under Article 226 of the Constitution, the petitioners had questioned the validity of various steps taken by the respondent-income-tax authorities in exercise of powers conferred on them under Sub-sections (1) and (3) of Section 132 of the Income-tax Act, 1961 (hereinafter to be referred as "the Act"). A direction has also been sought restraining such authorities from taking steps regarding attachment, removal or disposal of the bank amounts, fixed deposits, bank lockers and other immovable properties as also to take steps to return the entire amounts collected by them from the respondent-bank on the basis of premature encashment of various fixed deposits.

(2.) HAVING heard Mr. K.N. Jain, senior counsel appearing for the petitioners, and Mr. L.N. Rastogi, senior counsel for the income-tax authorities, as well as Mr. Shailendra Kr. Sinha, senior counsel appearing for the State Bank of India, this application is being disposed of at the stage of admission itself.

(3.) SECTION 132(5) of the Act indicates that till the tax liability is finally quantified by making an assessment, the Assessing Officer can only retain in his custody such assets or part thereof as, in his opinion, are sufficient to satisfy the amounts referred to in Clauses (ii), (ii)(a) and (iii) of this section. The provisions of SECTION 132 of the Act do not confer any authority to realise assets and convert them into cash. Such action can of course be possible, when the demand is finally quantified and assets are required to be realised in discharge of the liability. In the instant case, since such stage has not yet come, therefore, encashment or withdrawal of fixed deposit receipts, etc., would certainly be without any jurisdiction. Therefore, the impugned action of the authorities to that extent appears to be wholly unauthorised. Reference in this regard can be made to a decision of the Allahabad High Court in the case of Dheer Singh v. Assistant Director of Income-tax [1998] 230 ITR 343. Yet a reference can also be made to a decision of this court in the case of Santosh Verma v. Union of India [1991] 189 ITR 549. In the instant case also such steps of the Revenue authority were held unauthorised. It would be apt to notice a relevant passage of the report hereunder (page 552) :