Delhi High Court directs return of ₹98 lakh seized in case filed over bid to bribe Gen VK Singh

The Delhi High Court on January 10 directed the Income Tax department to return ₹98 lakh seized from one Gautam Thadani by the Central Bureau of Investigation (CBI) in 2012 in connection with an alleged bribe offered to General VK Singh for procurement of High Mobility Vehicles for the defence forces..The Court clarified that the amount be returned if no charge has been made against Thadani. A Division Bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma said,“In the present case, it is contended on behalf of the petitioner that the time period for framing an assessment under Section 153A of the Act has expired. Undisputedly, if the time period for framing an assessment under Section 153A of the Act has expired, and there is no outstanding demand, the Income Tax Authorities would have no justification in retaining the seized cash. In view of the above, this court directs that if no demand has been crystalized against the petitioner as yet, the seized cash be returned to the petitioner within a period of four weeks from date.”.Thadani claimed that the funds seized by the CBI were legitimate—₹52,70,000 from his company’s cash sales (M/s Global Healthline) and ₹18,50,000 as an advance for the sale of his car, which was later canceled. However, these explanations were deemed insufficient by the authorities.When informed about the seizure, the IT department sought to investigate whether the cash represented undisclosed income. A requisition for the funds was issued under Section 132A of the Income Tax Act in 2016, several years after the initial seizure.Thadani filed a writ petition before the High Court challenging the validity of the IT department's requisition and arguing for the return of the seized cash. He contended that the delay was unjustified, the requisition lacked legal basis, and that his explanations regarding the source of the funds were adequate..The Court noted that while the petitioner’s explanation for the source of the seized funds was inconsistent and lacked supporting documentation, the primary concern was whether the cash could be retained for over twelve years. It acknowledged that the petitioner had failed to provide adequate proof to substantiate his claims, particularly regarding the source of the cash and the absence of deposits into his bank account.“In view of the above, the petitioner’s contention that the Income Tax Authorities had no reason to believe that the cash as seized was an undisclosed asset, is rejected. We find no infirmity with the decision of the Income Tax Authorities to issue the impugned requisition. Clearly, it is necessary for the authorities to examine the source of funds seized from the petitioner’s premises.".It said that Section 153A of the Income Tax Act empowers the authorities to issue a notice requiring the person to furnish returns of income if a search has been conducted. However, Section 153B(1)(a) mandates that the assessment under Section 153A must be completed within 21 months from the date of the search.In this case, the search warrant was executed on December 15, 2016. The Court observed that if the assessment period under Section 153A has expired and no demand has been raised against the petitioner, the Income Tax authorities have no legal justification to retain the seized cash..“In the present case, the warrant under Section 132A(1)(c) of the Act was executed on 15.12.2016, thus, the Income Tax Authorities are required to complete the assessment within the time period stipulated under Section 153B(1)(a) of the Act which was required to be reckoned from 15.12.2016,” the court said. It thus directed the IT department to return the amount in four weeks if no charges are crystalised. .Thadani was represented by Advocates Ved Jain, Nischay Kantoor and Soniya Dodeja.The IT department was represented by Senior Standing Counsel Indruj Singh Rai, Junior Standing Counsel Sanjeev Menon and Rahul Singh, and Advocate Anmol Jagga.CBI was represented by Special Public Prosecutor Rajesh Kumar and Advocates Mishika Pandita and Mohd. Changez Khan..Read Judgment