S.132B(1)(i) Income Tax Act | Power Of Assessing Authority To Decide Application For Release Of Seized Assets Not Automatically Abated After 120 Days: Allahabad HC

The Allahabad High Court has held that the jurisdiction of the Assessing Authority to decide the application for release of seized assets under Section 132B does not abate after a period of 120 days from the date on which the last of the authorizations for search under section 132 or for requisition under section 132-A was executed. The Court held that the word “shall” in 2nd proviso to Section 132B is directory in nature as no stipulation is made for the automatic release of goods after the period of 120 days. Payability of interest may arise only in a case where the order may have remained to be passed within a time stipulation provided under the second proviso to Section 132 B of the Act.” However, the Court observed that Section 132B does not contemplate any automatic release of the seized assets if the application is not decided. Distinguishing the said case, the Court held that no such provision for automatic release has been provided in Section 132B which stipulates automatic release of seized assets upon expiry of 120 days. The Court held that “in absence of statutory intent shown to exist, it may not be inferred through the process of legal reasoning-that if no order is passed within a time of 120 days, seized assets must be released notwithstanding its impact on the recovery of existing and likely demands.” Accordingly, the Court held that the jurisdiction of the Assessing Authority did not abate upon expiry of 120 days and the petitioner was not entitled to the automatic release of goods under the 2nd proviso to Section 132B.