Ashish Jayantilal Sanghavi ( v. Income Tax Officer

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 10667 of 2020 ========================================================== ASHISH JAYANTILAL SANGHAVI (PROP. OF M/S. VIR IMPEX) Versus INCOME TAX OFFICER ==========================================================Appearance: MR TUSHAR HEMANI, SENIOR COUNSEL WITH MS VAIBHAVI KPARIKH(3238) for the Petitioner(s) No. 1MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALAand HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 12/04/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1By this writ application under Article 226 of the Constitution ofIndia, the writ applicant has prayed for the following reliefs: “(a) direct the respondent to release the diamonds in question; (b) Pending admission, hearing and final disposal of this petition, directthe respondent to release the diamonds in question; (c) any other and further relief deemed just and proper be granted inthe interest of justice; (d) to provide for the cost of this petition.” 2The facts giving rise to this writ application may be summarized asunder: 3The writ applicant is engaged in the business of diamonds. Thebusiness is being carried out in the name of a proprietary concern namely “M/s. Vir Impex”. It is the case of the writ applicant that he soldpolished diamonds valued at Rs.92,09,550/- to one company by name“Akash Diamonds Pvt. Ltd.” vide the invoice No.112/19/20 dated 2[nd]July 2019. 4On 8[th] August 2019, a search action under Section 132 of the Actwas carried out by the department at the business premises of the“Akash Diamonds Pvt. Ltd.” It appears that during the search, one of theemployees of the writ applicant namely Parin N. Sheth was present andwas found to be in possession of polished diamonds of the value referredto above. According to the writ applicant, his employee Parin N. Shethhad visited the premises of the Akash Diamonds Pvt. Ltd. in order tocollect the signed invoice No.112/19-20 dated 2[nd] July 2019 referred toabove. The said invoice was also found during the course of the search. 5The diamonds referred to above were seized from the possessionof Parin N. Sheth. 6For the first time, on 6[th] September 2019, the writ applicant madea request in writing to release the seized asset (diamonds) in accordancewith the provisions of Section 132(1)(i) of the Income Tax, 1961 [forshort, “the Act”]. The application preferred by the writ applicant dated6[th] September 2019 reads thus: “6[th] September 2019 FromShri Ashish SanghviSurat.PAN : To,Income Tax Officer,Ward – 1(2)(1), Surat. Sub : Request to release the diamonds as per proviso S. 132B(1)(i). Ref: The search proceedings u/s. 132 conducted against my employeesShri Parin N. Sheth on 08.08.2019. Dear Sir, 1.The search was conducted at the premises of Akash DiamondsPvt Ltd at 35 Burtolla Street, Ground Floor, Kolkata-700007 on 08.08.2019. My employee Shri Parin N. Sheth was present at the time of thesearch and he was found to be in the possession of polished diamondswhich were subsequently valued at Rs.92,09,550/-. He visited thispremises for the purpose of collecting the signed sale bill raised by myproprietory firm M/s. Vir Impex on account of goods sold to this partyvide Invoice No. 112/19-20 dated 02.07.2019. The invoice was given tothis party for the purpose of signature. The invoice was also found inthe course of the search 2. That my employee was found to be in the possession of polisheddiamonds. Although he was found in possession of polished diamond ofRs. 92,09,550/-, the ownership of the goods belongs to M/s. Vir Impexin which I am the proprietor. 2. That my employee was found to be in the possession of polisheddiamonds. Although he was found in possession of polished diamond ofRs. 92,09,550/-, the ownership of the goods belongs to M/s. Vir Impexin which I am the proprietor. 3. My employee Shin Parin N. Sheth retracted his declaration made atthe time of the search for the value of the alleged polished diamonds.However, the same was disclosed in my hand. The diamonds werevalued at Rs.92,09,550/- but after deducting the gross profit of about5% the cost price of the diamonds comes to Rs.87,50,000/-. Withoutprejudice to the accounting of the said diamonds in the books ofaccounts of my propriatory firm Ms. Vir Impex, I am ready to surrenderthe income of Rs. 87,50,000-as my additional income for AY 2019-20 &AY 2020-21. I undertake to pay tax alongwith interest on declaration ofRs. 87,50,000/-. 4. Your honour is requested to release the diamonds to the as the saiddiamonds belongs to my proprietory firm Ms. Vir Impex. It is to benoted that although the diamonds were held by my employer as stockin trade on behalf of my firm the diamonds were seized in the course ofsearch Accordingly, it is very urgent to release the diamonds for thepurpose of the smooth running of the trade and to avoid any liquiditycrunch. 5.Although I am liable to pay advance tax before 15.03.2020, I amready to pay tax on disclosed income instantly against the release of thediamonds.” 7A second reminder for the release of the diamonds is dated 16[th]September 2019 (Annexure : C). 8One affidavit was also filed by Parin N. Sheth stating as under: “16[th] September 2019 To,Income Tax Officer,Ward – 1(2)(1),Surat. Reg : Shri Ashish Sanghvi, Surat PAN : Sub : Request to release the diamonds as per proviso to S. 132B91)(i). Ref: The search proceedings u/s. 132 conducted against assessee’semployee Shri Parin N. Sheth on 08.08.2019. Dear Sir, 1.The search was conducted at the premises of Akash DiamondsPvt. Ltd. at 35 Burtolla Street, Ground Floor, Kolkata-700007 on08.08.2019 Assessee's employee Shri Parin N. Sheth was present at thetime of the search and he was found to be in the possession of polisheddiamonds which were subsequently valued at Rs.92,09,550/-. Hevisited this premises for the purpose of collecting the signed sale billraised by assessee's proprietary firm M/s. Vir Impex on account ofgoods sold to this party vide Invoice No. 112/19-20 dated 02.07.2019.The invoice was given to this party for the purpose of signature. Theinvoice was also found in the course of the search. 2.Assessee's employee was found to be in the possession ofpolished diamonds. Although he was found in possession of polisheddiamond of Rs.92,09,550/-, the ownership of the goods belongs to M/s.Vir Impex in which assessee is the proprietor. 3. Assessee's employee Shri Parin N. Sheth retracted his declarationmade at the time of the search for the value of the alleged polisheddiamonds as the diamonds seized belongs to assessee. The photocopy ofthe affidavit of Shri Parin N. Sheth is enclosed herewith. Assessee hasalso executed the affidavit claiming the ownership of the diamonds. The affidavit in original is enclosed herewith. 4.Your honour is requested to release the diamonds to assessee asthe said diamonds belongs to assessee's proprietary firm M/s. VirImpex. It is to be noted that although the diamonds were held byassessee's employee as stock in trade on behalf of assessee's firm, thediamonds were seized in the course of search Accordingly, it is veryurgent to release the diamonds for the purpose of the smooth runningof the trade and to avoid any liquidity crunch. 5.Assesseee has already requested your honour to release thediamonds vide letter dated 06.09.2019. 6. In view of the above, your honour is requested to release thediamonds either to assessoe or to his employee Shri Parin N. Sheth whowas holding the diamonds on behalf of assessee.” 9One affidavit was also filed by the writ applicant himself. Thesame reads thus: 5.Assesseee has already requested your honour to release thediamonds vide letter dated 06.09.2019. 6. In view of the above, your honour is requested to release thediamonds either to assessoe or to his employee Shri Parin N. Sheth whowas holding the diamonds on behalf of assessee.” 9One affidavit was also filed by the writ applicant himself. Thesame reads thus: “AFFIDAVIT I, Shri Ashish Sanghvi, aged about 40 years, Hindu by caste, resident of505, Chandanvan Apartment, Majura Gate, Surat PAN – ACVPS5819Edo hereby take oath and state on solemn affirmation as under: 1. That the search was conducted at the premises of Akash DiamondsPvt. Ltd at 35 Burtola Street, Ground Floor, Kolkata-700007 on08.08.2019 My employee Shri Parin N Sheth was present at the time.the search and he was found to be in the possession of polisheddiamonds which were subsequently valued at Rs 92.00.550F He visitedthis premises for the purpose of collecting the signed sale bill raised bymy propriatory firm Mis. Vir Impex on account of goods sold to thisparty vide Invoice No. 112/19-20 dated 02.07.2019 The invoice wasgiven to this party for the purpose of signature. The invoice was alsofound in the course of the search. 2.That my employee was found to be in the possession of polisheddiamonds Although he was found in possession of polished diamond ofRs. 92,09,550/-, the ownership of the goods belongs to M/s. Vir Impexin which I am the propriator. 3.That I am assessed to tax at ITO Vard-1(2)(1), Surat havingPAN-ACVPS5819E. My employee Shri Parin N. Sheth is assessed to taxat ITO, Ward-(1)(2)(4), Surat vide PAN . 4. That the diamonds were valued at Rs.92,09,550/- but afterdeducting the gross profit of about 5% the cost price of the diamondscomes to Rs.57,50,000/-. Without prejudice to the accounting of thesaid diamonds in the books of accounts of my proprietory firm M/s. VirImpex, I am ready to surrender the income of Rs 87.50 000 as myadditional income for AY 2019-20 & AY 2020-21. I undertake to pay taxalongwith interest on declaration of Rs. 87,50,000/-. The above scaled facts and us and correct to the best of my knowledgeand belief and know that to make a false affidavit is a criminal offence.” 10A third reminder for the release of the diamonds was given on 6[th]March 2020 (Annexure : F). 11The employee of the writ applicant also sent a reminder dated 6[th]September 2019 to release the diamonds. The employee once again on17[th] September 2019 made a request to release the diamonds. The lastcommunication between the employee of the writ applicant and theIncome Tax Officer is dated 6[th] March 2020. 12At no point of time, the Income Tax Officer thought fit to give anyreply to all the aforesaid letters / applications filed under Section132B(1)(i) of the Act. 13In such circumstances referred to above, the writ applicant had tocome before this Court with the present writ application. 14Mr. Tushar Hemani, the learned Senior Counsel appearing for thewrit applicant invited the attention of this Court to Section 132B of theAct. The relevant part of Section 132B with which we are concernedreads thus: “[Application of seized or requisitioned assets: 132B. (1) The assets seized under section 132 or requisitioned undersection 132A may be dealt with in the following manner, namely:— 12At no point of time, the Income Tax Officer thought fit to give anyreply to all the aforesaid letters / applications filed under Section132B(1)(i) of the Act. 13In such circumstances referred to above, the writ applicant had tocome before this Court with the present writ application. 14Mr. Tushar Hemani, the learned Senior Counsel appearing for thewrit applicant invited the attention of this Court to Section 132B of theAct. The relevant part of Section 132B with which we are concernedreads thus: “[Application of seized or requisitioned assets: 132B. (1) The assets seized under section 132 or requisitioned undersection 132A may be dealt with in the following manner, namely:— (i) the amount of any existing liability under this Act, the Wealth-taxAct, 1957 (27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987),the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45of 1974), and the amount of the liability determined on completion ofthe assessment [under section 153A and the assessment of the yearrelevant to the previous year in which search is initiated or requisitionis made, or the amount of liability determined on completion of theassessment under Chapter XIV-B for the block period, as the case maybe] (including any penalty levied or interest payable in connection withsuch assessment) and in respect of which such person is in default or is[deemed to be in default, or the amount of liability arising on anapplication made before the Settlement Commission under sub section(1) of section 245C, may be recovered out of such assets]: [Provided that where the person concerned makes an application to theAssessing Officer within thirty days from the end of the month in whichthe asset was seized, for release of asset and the nature and source ofacquisition of any such asset is explained] to the satisfaction of theAssessing Officer, the amount of any existing liability referred to in thisclause may be recovered out of such asset and the remaining portion, ifany, of the asset may be released, with the prior approval of the[Principal Chief Commissioner or] Chief Commissioner or [PrincipalCommissioner or] Commissioner, to the person from whose custody theassets were seized: Provided further that such asset or any portion thereof as is referred toin the first proviso shall be released within a period of one hundred andtwenty days from the date on which the last of the authorisations forsearch under section 132 or for requisition under section 132A, as thecase may be, was executed;” 15Mr. Hemani concentrated more on the second proviso to Section132B of the Act referred to above. As per the first proviso of clause (i) ofsub-section (1) of Section 132B of the Act, where an application forrelease of the asset is made within thirty days from the end of the monthin which the asset was seized and the nature as well as source ofacquisition of such asset is explained, it is permissible to recover theamount of “existing liability” out of such asset and the remaining portionof such asset could be released with the prior approval of the competentauthority. 16As per the second proviso of clause (i) of sub-section (1) ofSection 132B of the Act, the asset referred to in the first proviso shall bereleased within one hundred and twenty days from the date on whichthe last of the authorisations for search under Section 132 for requisitionunder Section 132A was executed. 17Mr. Hemani would like to raise manifold contentions, butaccording to him, he should succeed on the submission that the statutorytime limit of 120 days expired on 6[th] December 2019 i.e. 120 days fromthe date of the last of the authorisations for search i.e. 8[th] August 2019. 18According to Mr. Hemani, the issue raised above is squarelycovered by a decision of this High Court in the case of Nadim DilipbhaiPanjvani vs. Income Tax Officer, Ward No.3 reported in (2016) 383 ITR375 (Gujarat). 17Mr. Hemani would like to raise manifold contentions, butaccording to him, he should succeed on the submission that the statutorytime limit of 120 days expired on 6[th] December 2019 i.e. 120 days fromthe date of the last of the authorisations for search i.e. 8[th] August 2019. 18According to Mr. Hemani, the issue raised above is squarelycovered by a decision of this High Court in the case of Nadim DilipbhaiPanjvani vs. Income Tax Officer, Ward No.3 reported in (2016) 383 ITR375 (Gujarat). 19In such circumstances referred to above, Mr. Hemani prays thatthere being merit in his writ application, the same may be allowed andthe seized asset (diamonds) may be ordered to be released in favour ofthe writ applicant. 20Per contra, this writ application has been vehemently opposed byMs. Kalpana K. Raval, the learned Senior Standing Counsel appearing forthe Revenue. According to Ms. Raval, the asset was seized from oneParin Nareshkumar Sheth and not from the writ applicant. Parin N.Sheth in his statement recorded under Section 132(4) of the Actcategorically accepted that the diamonds belong to him. As Parin N.Sheth was not able to submit any documentary evidence during thecourse of the search or during the post search inquiry, the diamonds arenow to be treated as income of Parin N. Sheth and the assessment proceedings in respect of Parin N. Sheth are pending as on date. 21Ms. Raval also invited the attention of this Court to few relevantaverments made in affidavit-in-reply filed on behalf of the respondents. 22In such circumstances referred to above, Ms. Raval prays thatthere being no merit in the present writ application, the same may berejected. ANALYSIS: 23Having heard the learned counsel appearing for the parties andhaving gone through the materials on record, the only question that fallsfor our consideration is whether we should direct the respondents tohand over the diamonds to the writ applicant. 24The statutory provision of Section 132B of the Act is very clear.There appears to be a mandate and such mandate is mandatory and notdirectory. This is evident from the ratio of the decision of this High Courtin the case of Nadim Dilipbhai Panjvani (supra) wherein this Court hastaken the view that the Courts should attach considerable importance tothe time frame provided under Sections 132A and 132B resply of the Actwhen it comes to a question of retention of books of accounts or ofseized assets. It is not permissible for the Court to read the time limitprovided in the proviso to clause (i) of sub-section (1) of Section 132B ofthe Act as being merely directory. Any attempt on the part of the Courtto read it as directory would substantially dilute the rigors of thestatutory provisions and would give an unbridled power to the AssessingOfficer to retain the seized assets awaiting the finalization of futurepossible liability for indefinite period without deciding the application ofthe person concerned who may be legitimately in a position to explain the source of the asset so seized. 25In the aforesaid context, we may quote few relevant observationsfrom the judgement in the case of Nadim Dilipbhai Panjvani (supra): the source of the asset so seized. 25In the aforesaid context, we may quote few relevant observationsfrom the judgement in the case of Nadim Dilipbhai Panjvani (supra): “6. As per Section 1 of Section 132B of the Act, thus, the assets seizedunder Section 132 or requisitioned under Section 132A has to be dealtwith in the manner provided in Clauses (i) to (iii) thereof. Principally,under Clause (i), it is provided that the amount of any existing liabilityunder the Income Tax Act or the related fiscal statutes and the liabilitydetermined on completion of assessment under Section 153A and theassessment of the year relevant to the previous year, in which, search isinitiated or requisition is made, or the amount of liability determinedincluding the penalty and interest would be recovered out of suchassets. Provisio to Clause (i) of Section 1 of Section 132B, however,provides that where the person concerned makes an application to theAssessing Officer within thirty days from the end of the month, inwhich, the asset was seized, for release of the asset and the nature andsource of acquisition of any such assets is explained to the satisfactionof the Assessing Officer, the amount of existing liability referred to inthe said clause may be recovered out of such asset and the remainingportion, if any, may be released to the person from whose custody theasset was seized, with the prior approval of the officer prescribed underthe said proviso. 7. Under Clause (i) of sub-section (1) of Section 132B, any seized assetswould be adjusted towards the recoveries not only against existing butalso liabilities which may crystallize on completion of the assessmentunder Section 153A and the assessment of the relevant year to theprevious year, in which, the search is initiated or the request is made orin the block assessment proceedings. Such liabilities would not onlyinclude the principal tax but also interest and penalties, if any.However, under the first proviso to Clause (i) of sub section (1), if theperson concerned makes an application within the prescribed time andalso satisfies the Assessing Officer about the source of acquisition ofsuch asset, the asset would be adjustable only against the existingliabilities. In other words, upon the concerned person applying to theAssessing Officer and satisfying him about the source of the acquisitionof the asset, the same would be released after adjustment towardsexisting liabilities, without waiting for the outcome of the assessmentproceedings under Section 153A of the Act or the assessment for theyear relevant to the previous year, in which, the search was initiated ora requisition is made or for the block period referred to under ChapterXIV-B. 8. Further proviso to Clause (i) of sub section (1) of Section 132B of the 8. Further proviso to Clause (i) of sub section (1) of Section 132B of the Act provides that such asset or any portion thereof, as is referred to inthe first proviso shall be released within a period of 120 days from thedate on which the last of the authorizations for search under Section132 or for requisition under Section 132A, as the case may be, wasexecuted. This further proviso, therefore, has to be viewed andinterpreted in the background of the provisions contained in Clause (i)of sub section (1) of Section 132B of the Act and the first provisio to thesaid clause. The further proviso, thus, requires that such assets orportion thereof referred to in the first provisio would be released withinthe prescribed time. Of course when this further proviso refers to anyportion of the asset, as is referred to in the first proviso, it necessarilypermits the Assessing Officer to apply the assets against the existingliability or even when not satisfied about the source of acquisition ofthe asset to refuse to release the same till the further liabilities whichmay arise upon completion of the assessment under Section 153A of theAct or the assessment of the year relevant to the previous year, inwhich, the asset was seized etc. are completed. To this extent, we fullyaccept the stand of the counsel for the revenue that the further provisowould have to be read in continuation of the first proviso and thereforewould not override the provision of the first proviso which requires theAssessing Officer to release the asset only upon being satisfied with thesource of its acquisition. However, this further proviso puts a time limit,within which, such asset must be released. The question of notreleasing the asset would arise only upon the decision on an applicationthat may have been made by the person concerned is taken by theAssessing Officer. If no decision is taken, necessarily, the option of theAssessing Officer to adjust such seized asset would be confined to theexisting liabilities. It is, in this context, in our opinion, the legislaturerequired the Assessing Officer to follow the time limit scrupulously. Inother words if the person concerned has made an application forrelease of the asset within the prescribed time, the authority can refusesuch request on the ground of not being satisfied about the source of itsacquisition. But if no such decision is taken within the time envisaged inthe further proviso, releasing of the asset becomes imminent. 9. Somewhat similar question arose before this Court in case of MitabenR. Shah vs. Deputy Commissioner of Income tax and anr (supra), inwhich also, the application for release of the seized assets and books ofaccounts was decided after expiry of 120 days from the last of theauthorizations. Division Bench of this Court held and observed asunder: “18. Having heard the learned advocates appearing for theparties and having considered their rival submissions in light ofthe statutory provisions and facts and circumstances of the case,the Court is of the view that the impugned order passed by therespondent rejecting the petitioner's application for release ofjewellary and gold ornaments is not tenable at law and hence 9. Somewhat similar question arose before this Court in case of MitabenR. Shah vs. Deputy Commissioner of Income tax and anr (supra), inwhich also, the application for release of the seized assets and books ofaccounts was decided after expiry of 120 days from the last of theauthorizations. Division Bench of this Court held and observed asunder: “18. Having heard the learned advocates appearing for theparties and having considered their rival submissions in light ofthe statutory provisions and facts and circumstances of the case,the Court is of the view that the impugned order passed by therespondent rejecting the petitioner's application for release ofjewellary and gold ornaments is not tenable at law and hence the same deserves to be quashed and set aside. The provisionscontained in Section-132B(1) are very clear and unambiguous.Section-132B deals with the assets seized under Section- 132 orrecognized under Section-132A of the Act. A detailed procedureis prescribed under Section-132B(1)(i) of the Act. Out of suchseized assets, the amount of the existing liability or the amountof the liability determined on the completion of the regularassessment or reassessment including any penalty levied orinterest payable in connection with such assessment orreassessment is required to be recovered. The first proviso of thisSection enables the assessee to make an application within 30days from the end of the month in which the asset was seized.For release of the assets the assessee is required to explain thenature and source of acquisition of such assets to the satisfactionof the Assessing Officer. On such satisfaction and with priorapproval of the Chief Commissioner the Assessing Officer isempowered to release the asset to the person from whosecustody the assets were seized. The second proviso to thisSection makes it clear that the assets are required to be releasedwithin a period of 120 days from the date on which the last ofthe authorization for search under Section-132 or for requisitionunder Section- 132A, as the case may be, was executed. 19. Considering the above provisions, the petitioner made anapplication within the permissible time limit. Despite the factthat the period of 120 days was over, the assets were notreleased. The petitioner thereafter sent reminder and still noaction was taken on behalf of the respondent. The petitioner,therefore, approached this Court by way of writ petition. Duringthe pendency of this petition, the petitioner's application wasrejected and since the order was passed by the respondent givingfresh cause of action the earlier petition was allowed to bewithdrawn with a liberty to file fresh petition. The action of therespondent authorities is highly objectionable in view of the factthat in earlier petition, after issuance of notice time was soughtfor to file the reply affidavit. However, this time was utilized forthe purpose of passing the order so as to make the earlierpetition as infructuous one. In the affidavit-in-reply therespondents have come out with the stand that a detailed notewas prepared by the Assistant Director of Investigation wherebythe the petitioner's claim for release of the gold ornaments andjewellary was rejected. However, the said note was nevercommunicated to the petitioner. The petitioner is not concernedwith the stand taken by the respondent in the affidavit-in-reply.With regard to the change of jurisdiction one has to see thecompliance of the provisions of Section-132B(1) (i) of the Act.The first thing is to make an application in time explaining thenature and source of acquisition of the asset which was duly made by the petitioner. No dispute was raised during thepermissible time of 120 days. It is only after the expiry of thesaid period the order was passed raising all sorts of contentions.However, this is not permissible in view of the mandatecontained in second proviso to Section-132B(1)(i) of the Act. Itclearly says that the assets or any portion thereof shall have to bereleased within a period of 120 days. Once this period is over therespondents have no authority to retain these assets. Interpretingsomewhat similar provisions, this Court has already taken theview in Cowasjee Nusserwanji Dinshaw (Supra) wherein thebooks of accounts were retained beyond the period of 180 daysfrom the date of seizure without communicating the reasonsrecorded by the authorised officer and approval of theCommissioner was held to be illegal and unlawful. The ratio ofthe said decision would squarely cover the present case and in allthese cases the respondent authorities have retained the seizedassets beyond the period of 120 days. The orders passed by therespondent authorities beyond such period are of noconsequence and they are not tenable at law. 20. In the above view of the matter, all these orders which arechallenged in the present group of petitions retaining the assetsbeyond the period of 120 days are hereby quashed and set asideand the respondent authorities are directed to release the goldornaments and jewellary seized by them during the course ofsearch and seizure operation forthwith and in any case not latterthan two weeks from the date of receipt of the writ of this Courtor from that date of receipt of certified copy of this order,whichever is earlier.” 10.We may also refer to the decision of Division Bench of this Court incase of Cowasjee Nusserwanji Dinshaw vs. Income Tax Officer reportedin 165 ITR page 702, in which, the Court found that the books anddocuments of the assessee, which were seized during search and seizureoperation, were retained beyond a period of 180 days withoutcommunicating the reasons recorded by the Assessing Officer for suchpurpose. The Court held that, continued retention of the books andaccounts and seized documents would, therefore, be illegal and invalid.It was observed as under: “In the present case, the accountbooks/documents were seized in November/December,1984.Admittedly, after the expiry of the period of 180 days, the documentshave been retained by the revenue authorities without communicatingthe reasons stated by the authorized officer and the approval of theCommissioner. To date, no such intimation has been given to theassessee and, therefore, in view of the ratio of the above decision, therecan be no doubt that the extended retention of the accountbooks/documents is wholly illegal and unlawful. We are, therefore, ofthe opinion that the grievance made by the assessee is well founded.” 11. It can thus be seen that the Courts attach considerable importanceto the time frame provided under Sections 132A and 132B of the Actwhen it comes to a question of retention of books of accounts or ofseized assets. We cannot read the time limit provided in further provisoto Clause (i) of sub section (1) of Section 132B of the Act as beingmerely directory. Any such view would substantially water down therigors of the statutory provisions and would give an unlimited authorityto the Assessing Officer to retain the seized assets awaiting finalizationof future possible liability for indefinite period without deciding theapplication of the person concerned who may be perfectly legitimatelyin a position to explain the source of the asset so seized. 11. It can thus be seen that the Courts attach considerable importanceto the time frame provided under Sections 132A and 132B of the Actwhen it comes to a question of retention of books of accounts or ofseized assets. We cannot read the time limit provided in further provisoto Clause (i) of sub section (1) of Section 132B of the Act as beingmerely directory. Any such view would substantially water down therigors of the statutory provisions and would give an unlimited authorityto the Assessing Officer to retain the seized assets awaiting finalizationof future possible liability for indefinite period without deciding theapplication of the person concerned who may be perfectly legitimatelyin a position to explain the source of the asset so seized. 12. Facts, noted above, are rather glaring. The application of thepetitioner for the purpose of releasing of the seized asset, which wasmade on 17.04.2014, came to be decided only on 20.07.2015 i.e. overone year later. In the meantime, the petitioner had sent two reminders.Action of the Assessing Officer cannot be countenanced. Impugnedorder dated 20.07.2015 is set aside. The seized cash shall be released infavour of the petitioner alongwith interest as per the statute. 13. With this direction, the petition is disposed of.” 26In view of the aforesaid, this writ application succeeds and ishereby allowed. The respondents are directed to hand over the seizedasset (diamonds) to the writ applicant within a period of four weeksfrom the date of receipt of the writ of this order. It is needless to clarifythat the assessment proceedings, if initiated against Parin N. Sheth withrespect to the seized asset or even in the case of the writ applicanthimself, may continue in accordance with law. Direct service ispermitted. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J)