The Delhi High Court has recently instructed the Income Tax Department to refund Rs. 98 lakh seized by the Central Bureau of Investigation from Gautam Thadani in 2012.
The seizure was related to a case registered against Thadani, who was allegedly involved in offering a bribe to General VK Singh for the procurement of high-mobility vehicles for the defense forces.
A division bench comprising Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma ruled that if no formal charges have been filed against Thadani, the seized amount must be returned. The court emphasized that withholding the amount without any pending charges or assessments is unjustifiable.
Thadani’s counsel argued that the statutory time limit for completing the assessment under Section 153A of the Income Tax Act had already lapsed. As per the Act, assessments must be completed within a specified timeframe following a search or requisition.
Since this period had expired without any assessment being made, the petitioner contended that there was no legal basis for retaining the cash.
The High Court concurred with the petitioner’s argument, noting that the Income Tax authorities had failed to justify the prolonged retention of the seized amount. The bench observed that in the absence of an outstanding tax demand or pending assessment proceedings, the continued withholding of funds violated statutory provisions.
The court also pointed out that the requisition for the seized cash under Section 132A of the Income Tax Act was issued in 2016, several years after the initial seizure by the CBI in 2012. This delay further weakened the justification for retaining the funds.
Given these circumstances, the court directed the Income Tax Department to promptly refund the seized amount to Thadani. The ruling underscores the importance of adhering to statutory timelines in assessment proceedings and protecting individuals from undue financial hardship due to prolonged withholding of funds by authorities.
This decision reinforces the principle that unless there is a clear and valid reason backed by law, authorities cannot indefinitely withhold seized assets. It also serves as a reminder to ensure timely action in cases involving financial seizures to prevent unnecessary legal disputes.
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