'Really Troubling': Delhi High Court Orders Opening Of Taxpayer's Locker Seized For Over 30 Years

The Delhi High Court has directed the Income Tax Department to open a taxpayer's locker, which has remained seized for more than 30 years, observing that continued seizure of the locker serves no purpose after the tax dispute had already been finalised by the Income Tax Appellate Tribunal (ITAT).

The Division Bench of Justices Dinesh Mehta and Aditi Choudhary was hearing a petition filed by Devi Dayal Aggarwal, who approached the Court alleging that the Assessing Officer had failed to pass an order giving effect to an ITAT order passed in 2004.

The petition has been pending since 2011.

Petitioner submitted that he had paid ₹64,612 pursuant to an order passed by the Commissioner of Income Tax (Appeals), following which the ITAT partly allowed his appeal. According to him, the outstanding demand after the Tribunal's order could not exceed ₹27,000.

He further submitted that ₹45,000 seized during a search had been adjusted as advance tax, but despite the passage of several years, the Department had neither determined the final tax liability nor provided him the due refund.

During the hearing, Petitioner's counsel also pointed out that Petitioner's locker had remained seized for more than 30 years.

The High Court observed that the facts presented a “sorry picture” of the respondents' functioning.

“Keeping someone's locker seized for 30 years, that too when the ITAT has finalized the tax dispute is something really troubling- the locker may contain jewellery, valuables and documents and continued seizure does not serve any purpose,” it observed.

It noted that there is no demand against Petitioner and even if there is a demand, seizure of locker by itself does not ensure or help recovery.

The Court accordingly directed the Assessing Officer to provide a personal hearing to Petitioner and pass appropriate orders giving effect to the ITAT's order.

It further directed the AO to decide a mutually convenient date, before the next date of hearing, for opening the seized locker in the presence of Petitioner and the bank manager.

The opening of the locker is to be videographed in the presence of the AO and the bank manager.

The Court clarified that while the locker would be opened and its contents verified and itemised, Petitioner would not be permitted to remove any article.

After the inventory is prepared, the locker is to be closed and cannot be opened again without the Court's permission. The keys, however, are to be handed over to Petitioner.

The matter is next listed on October 12.

For Petitioner: Advocates Manish Yadav, Poonam Raswant, Mitika Chaudhary and Rohan Aggarwal

For Respondents: Vipul Agrawal, Sr. SC, and Sakshi Shairwal, Jr. SC