Delhi High Court Asks Income Tax Department To Explain 13-Year Delay In Releasing Seized Jewellery

The Delhi High Court has directed the Income Tax Department to file a “comprehensive affidavit” explaining the 13-year delay in releasing jewellery seized from an assessee.

The Department informed the Court that the jewellery had now been released and assured that the balance refundable amount, along with applicable interest, would be paid within four weeks.

However, the Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta sought to know from the Assessing Officer, the reasons for the delay not only from the date when he joined office (21.05.2025) but also for the period prior thereto.

The direction follows the court's sharp observations in its earlier order, when it noted that cash of ₹32.50 lakh and jewellery valued at ₹23.16 lakh, seized in September 2010, continued to remain with the department despite no outstanding tax demand against the Petitioner.

The court had termed the situation a "shocking state of affairs."

Petitioner had contended that although an amount of ₹22.53 lakh had been adjusted towards tax demand pursuant to the assessment order in 2013, the balance refundable amount and the seized jewellery had not been returned.

It was also submitted that repeated representations to the Department went unheard and unheeded.

Expressing dissatisfaction with the Department's explanation, the Bench had observed that its conduct reflected an attitude of "high handedness and red-tapism."

“In the present era, when one expects honesty and uprightness from the assessees and the tax payers, the least what is expected from the officers is, that they do what is enjoined upon them to do in timely manner,” the Court had remarked earlier.

The matter is now listed on September 22.

For Petitioner: Senior Advocate Sachit Jolly with Advocates Arjun Syal, Rohit Kumar, Sahib Kochhar, Abhyudaya Shankar Bajpai, Sohum Dua and Saloni Ray.

For Respondents: Senior Standing Counsel Indruj Singh Rai with Junior Standing Counsels Sanjeev Menon, Rahul Singh and Priya Sarkar, along with Advocates Gaurav Kumar and Prateek Bhati. Deputy Commissioner of Income Tax, Central Circle-27 Ankur Kumar Jain.