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Bansal Commodities v/s Union of India and Others. (and Others Writ Petitions.)

Company & Directors' Information:- E-COMMODITIES LIMITED [Active] CIN = U72900WB2000PLC091569

Company & Directors' Information:- BANSAL CORPORATION LIMITED [Active] CIN = U74899DL1999PLC102216

Company & Directors' Information:- UNION COMMODITIES PRIVATE LIMITED [Active] CIN = U51909MP2012PTC028111

Company & Directors' Information:- B. BANSAL AND COMPANY PRIVATE LIMITED [Active] CIN = U24246UP1996PTC020088

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- COMMODITIES (INDIA) PRIVATE LIMITED [Active] CIN = U51900MH1990PTC056503

Company & Directors' Information:- UNION COMPANY LTD. [Active] CIN = U36900WB1927PLC005621

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- BANSAL COMMODITIES (INDIA) PRIVATE LIMITED [Converted to LLP] CIN = U51900MH1997PTC110342

Company & Directors' Information:- BANSAL AND COMPANY PRIVATE LIMITED [Active] CIN = U74140DL2000PTC108131

Company & Directors' Information:- UNION COMPANY PRIVATE LIMITED [Dissolved] CIN = U99999KA1942PTC000292

    CW No. 1253 of 1990

    Decided On, 28 August 1990

    At, High Court of Delhi


    For the Appearing Parties : ---

Judgment Text


The challenge in this writ petition is to an order passed on March 1, 1990, by the Commissioner of Income-tax, Delhi IX, as a result of which, sum of Rs. 49, 03, 000 is not being paid to the petitioners Briefly stated, the facts are that the premises of one Shri R. K. Aggarwal were searched pursuant to an authorisation issued under section 132 of the Income-tax Act. Simultaneously a search was also conducted in the premises of his business concerns. At that time, it transpired that there were pay orders dated April 25, 1989, which were issued by one Shri Surrinder Kumar totalling Rs. 50, 40, 000. These pay orders were issued to Hindustan Copper Ltd. The Deputy Commissioner of Income-tax passed an order under the second proviso to section 132(1) effecting a deemed seizure of these pay orders. Intimation was also sent to the Manager, Punjab National Bank. Thereafter, orders under section 132(5) were passed by the department against R. K. Aggarwal and also Surrinder Kumar. At that time, R. K. Aggarwal stated that Surrinder Kumar was only a name-lender and in fact the said pay orders had been issued on his own behalf

Appeals were filed under section 132 (11) by the petitioners alleging that Rs. 49, 03, 000 out of the aforesaid amount of Rs. 50, 40, 000 was really the petitioners' money. The contention raised was that in January, 1989, four pay orders had been issued by the petitioners in the names of sister concerns of R. K. Aggarwal and the pay orders of Rs. 50, 40, 000 included the aforesaid amount of Rs. 49, 03, 000. The Commissioner of Income-tax, Delhi IX, and the Commissioner of Income-tax, Delhi X, by two separate orders, accepted the contention of the petitioners and vacated the restraint order. The money, however, was not refunded to the petitioners and, subsequently, on March 1, 1990, the impugned order was passed by the Commissioner of Income-tax, Delhi IX, in which it has been stated that an assessment had been made in the case of Surrinder Kumar and the amount in question has been assessed in his name and, therefore, the orders passed by him earlier under section 132 (12) stood cancelledOn behalf of the petitioners, it is contended that the Commissioner of Income-tax had no power to review and reliance is placed on a decision of this court in the case of CIT v. K. L. Bhatt's 1990 (182) ITR 361, 1990 (84) CTR 152, 1990 (51) TAXMAN 436, 1990 (84) CTR(Del) 152. It is also submitted that the second proviso to section 132(1) did not permit such a seizure and the seizure itself was bad in law

Learned counsel for the petitioners has drawn our attention to the orders passed by the two Commissioners of Income-tax under section 132(12) whereby the appeals filed by the petitioners have been allowed. The case of the petitioners has already been set out above. We would have expected that any diligent officer, while concerned with large sums of money, would have made inquiries as to what had happened to the pay orders after the petitioners gave them to the sister concerns of R. K. Aggarwal. The Commissioners have accepted that R. K. Aggarwal received Rs. 49.03 lakhs and from that have concluded that the cash deposited in the name of Surrinder Kumar in April. 1989 amounting to Rs. 50.40 lakhs included the aforesaid amount. No inquiries were made and there was no mention in any, of the two orders as to how the pay orders, given by the petitioners not to R. K. Aggarwal but to four business concerns in which he was associated, were treated. The accounts of those four business concerns and of R. K. Aggarwal should have been examined in order to ascertain whether, in April, 1989, when over Rs. 50 lakhs were deposited in cash in a fictitious name, any money was even available as per the account books. No such enquiry was made nor has this aspect been even referred to by either of the two Commissioners. We are making these observations because, in our opinion, there is no manner of doubt that the transactions in question are not entirely straightforward and this court, while exercising its jurisdiction under article 226, should not encourage such efforts. Admittedly, according to the petitioners, Surrinder Kumar is a non-existing person. We fail to understand as to why, if money was given to R. K. Aggarwal by the petitioners for purchase of copper, that money should have been withdrawn and, assuming the petitioner is to be believed, the cash was deposited in the name of Surrinder Kumar and then pay orders issued by the alleged Surrinder Kumar in favour of Hindustan Copper Ltd. The money was paid by the petitioners to the business concerns of R. K. Aggarwal through the bank and there is no reason why further transactions should not have been carried out by R. K. Aggarwal or those concerns themselves. There is a gap of over three months between the payment of Rs. 49.03 lakhs by the petitioners and the deposit of Rs. 50.40 lakhs in cash in the name of Surrinder Kumar. No facts are stated which can lead any one to even a prima facie conclusion that money which was paid in January was still available for being put to use in April, 1989 There is no investigation done by the Commissioners of Income-tax nor have they referred to this aspectIn the instant case, a regular assessment has taken place. An assessment order has been passed in the name of Surrinder Kumar and a copy of the assessment order has been placed on record by the Addl. Solicitor General before us. According to this order dated February 13, 1990, the aforesaid amount of Rs. 50.40 lakhs has been included in the hands of Surrinder Kumar. A regular assessment having been made, we see no reason as to why, even assuming that the Commissioner of Income-tax had no power to review, he should be directed to release the money in favour of the petitioners

It is submitted by learned counsel for the petitioners that the only right the petitioner has is to file an appeal under section 132(11) and this right was exercised and valid orders passed in favour of the petitioners. We have already commented on the merits of the orders which were passed and we are of the opinion that there

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was no reason as to why the appeals should have been allowed, on the basis of the facts on record, and, therefore, if, ultimately, orders had been passed which result in the money not being paid back to the petitioners, we feel that injustice has been prevented. In our opinion, this is not a fit case where this court should exercise its jurisdiction under article 226 of the Constitution specially when regular assessment has been made in the name of Surrinder Kumar and the amount has been held to be his undisclosed income. As long as this assessment is not set aside, the question of the amount of Rs. 40.03 lakhs being ordered to be paid to the petitioners does not arise. Dismissed.