Labh Construction and Industries Limited vs Commissioner of Income Tax

B.C. Patel, J.—Mr. Soparkar, learned advocate seeks permission to delete respondents No. 6 to 11. Permission granted.

Rule. Mr. Bhatt, learned advocate waives service of rule.

The present petition is preferred against six orders of assessment pertaining to stolen cash. The copies of the Assessment Orders are placed on

record.

The petitioners have come out with a case that their cash amount of Rs.22,35,000/- was handed over to Harin K. Shah. The said Mr. Harin K.

Shah filed a complaint before the policed interalia alleging that 7 persons apprehended and looted a sum of Rs.5000/-. After few days, in his

further statement, the amount looted was increased to Rs.22,35,000/-. We are not here to appreciate the facts and circumstances of the case as

the Court competent to try the accused has passed an order of acquittal after recording the evidence. The amount was claimed and ultimately that

was the subject matter of proceedings before this Court wherein at the admission stage, in Criminal Revision Application No. 418 of 1996, learned

Single Judge (Coram: K.J. Vaidya, J., as he then was), on 27.12.1996 opined that remedy would be available under the facts and circumstances

of the case before the Income Tax Officer and permitted the petitioner of that Criminal Revision Application to make an appropriate application to

the concerned officer regarding the return of the cash and directed that the same shall be decided on merits and according to law, within a period

of one month from the date of the application. The grievance made by the petitioner in this petition is that the petitioners were not given an

opportunity of hearing, and without hearing the petitioners, the orders have been passed.

During the hearing of this matter, the police officers who conducted investigation in this matter were summoned by the Government Pleader.

They produced before us a bunch of records including the statement of the accused, which have been returned to them. We are not sitting in

appeal over the order passed by the learned Single Judge. Therefore, on merits, we would not like to say anything. Suffice it to say that rules of

natural justice requires that the petitioners ought to have been heard before passing any orders affecting them, more particularly when the learned

Single Judge has directed the department to decide the application. However, it seems that the assessing officer was of the wrong notion that the

moment there is an order of acquittal, the property which is alleged to have been stolen ceases to be a stolen property and the persons from whom

the property recovered become the owners of the property. Merely because the prosecution has not been able to prove the charge pertaining to

property in the instant case levelled against the accused in a criminal trial resulting into their acquittal, it does not mean that the amount belongs to

the persons from whom the same was recovered, more particularly when the accused themselves have stated in their statements that the property

was stolen. The question is required to be considered in accordance with law.

For the reasons recorded hereinabove, we direct the assessing officers to pass the orders after hearing the petitioners. It would be open for the

assessing officers to summon the police officers to remain present with the papers of investigation including the statement of the accused.

Government Pleader appearing in the matter has assured that the police officers shall remain present before the assessing officer without fail on

issuance of summons by the Income Tax Department. We direct that the Assessing Officers shall pass appropriate orders after hearing the

petitioners and taking into consideration the police papers. In the result, 6 block assessment orders passed in this case, copies of which are

produced before us, are quashed and set aside. As a consequence of this order, there is no question of refund of the amount at this stage.

This petition stands disposed of with the aforesaid directions. Rule is made absolute accordingly, with no order as to costs.