The Delhi High Court has directed the Income Tax Department to release and open a taxpayer’s locker that remained seized for over 30 years.
The Court held that the prolonged restraint served no legal purpose, particularly after the underlying tax dispute had been conclusively finalised in favour of the assessee by the Income Tax Appellate Tribunal (ITAT).
The Division Bench of Justices Dinesh Mehta and Aditi Choudhary was hearing a petition of Devi Dayal Aggarwal, who approached the Court alleging that the Assessing Officer had not passed an order giving effect to an ITAT order passed in 2004.
The petition has remained pending since 2011.
The petitioner submitted that a payment of ₹64,612 was deposited pursuant to an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)]. Following a subsequent ruling by the ITAT that partly allowed the assessee’s appeal, the petitioner contended that the revised outstanding tax demand should not exceed ₹27,000.
He said that Rs 45,000 seized in a search had been adjusted as advance tax; but the department did not determine the final tax liability, and it also failed to provide him the due refund even after the passage of several years.
For more than 30 years, the applicant’s locker had remained seized, the applicant’s counsel cited.
High Court noted that the facts show a sorry picture of the respondents’ work.
“Keeping someone’s locker seized for 30 years, that too when the ITAT has finalised the tax dispute, is something really troubling- the locker may contain jewellery, valuables and documents, and continued seizure does not serve any purpose,” it said.
The Court observed that there were no outstanding demands against the petitioner, and even if there were, merely seizing the locker would neither ensure recovery nor facilitate it.
Therefore, the Court asked the assessing officer to furnish a personal hearing to the applicant and pass suitable orders to implement the ITAT’s order.
Furthermore, the Court directed the AO to fix a mutually agreed-upon date prior to the next date of hearing to open the seized locker in the presence of the petitioner and the bank manager.
It is mandatory that the opening of the locker is videographed in the presence of the Assessment Officer (AO) and the bank manager.
The Court clarified that the locker would be opened, its contents examined, and inventoried, but the petitioner would not be allowed to remove any items.
After preparing the inventory, the locker is to be closed and cannot be opened again without the Court’s permission. However, the keys are to be handed over to the applicant.
The Court has fixed 12th October as the next hearing date for the case.
| Case Title | Devi Dayal Aggarwal vs. CIT Central II |
| Case No. | W.P.(C) 1565/2011 |
| For Petitioner | Mr Manish Yadav, Ms Poonam Raswant, Ms Mitika Chaudhary and Mr Rohan Aggarwal |
| For Respondent | Mr Vipul Agrawal, Sr. SC and Ms Sakshi Shairwal |
| Delhi High Court | Read Order |
