Facts of the Case

A batch of writ petitions, including that of the petitioner Ananya Vir, was filed before the Delhi High Court by members of the same family challenging continued retention of gold jewellery, bullion, cash/forex and other valuables seized during a search conducted by the Income Tax Department between 17.12.2024 and 20.12.2024 under Section 132 of the Income Tax Act, 1961.

The petitioners contended that despite the lapse of time after search, the Department had not finalized proceedings under Section 158BC of the Act. It was asserted that all seized assets were duly explained or explainable and that the petitioners were regular assessees filing returns and paying taxes. Special emphasis was placed on the case of Ananya Vir, whose marriage was scheduled in March 2026, and the seized jewellery was stated to have significant emotional and customary importance.

The total value of seized jewellery and bullion, as per the Department’s own valuation, was approximately ₹5.95 crore, apart from cash/forex of about ₹40 lakh.

Issues Involved

Whether the continued retention of seized jewellery, bullion and cash was justified when proceedings under Section 158BC had not been concluded, whether provisional release could be ordered subject to safeguards to protect the interest of Revenue, and whether deposit of advance/self-assessment tax could be directed as a condition for release.

Petitioner’s Arguments

The petitioners submitted that they were regular income-tax assessees and that the seized assets were not undisclosed. It was argued that prolonged retention of valuables without completion of assessment proceedings was arbitrary and caused undue hardship. In respect of Ananya Vir, it was specifically argued that the jewellery was required for her impending marriage. The petitioners expressed willingness to furnish solvent security or comply with any reasonable condition imposed by the Court, including deposit of advance/self-assessment tax.

Respondent’s Arguments

The Revenue opposed unconditional release and submitted that in order to safeguard the interest of the Department, the petitioners should be directed to deposit an amount equivalent to the probable tax liability as advance tax/self-assessment tax for Assessment Year 2025-26, so that any future demand could be secured.

Court Order / Findings

The Delhi High Court observed that the petitioners were assessees regularly filing returns and that proceedings under Section 158BC had not yet been finalized. The Court took note of the personal circumstances of the petitioners, including senior citizens and young family members, and the specific requirement of jewellery for Ananya Vir’s marriage.

Balancing the equities and safeguarding the Revenue’s interest, the Court accepted the proposal that two of the petitioners would deposit advance/self-assessment tax. The Court held that upon such deposit, continued retention of the seized jewellery, bullion and cash was not warranted and directed their release within a stipulated time. The Court clarified that no opinion was being expressed on the merits of the explanation regarding the seized assets.

Important Clarification

The High Court clarified that the release of seized assets was ordered purely on equitable considerations and subject to deposit of advance/self-assessment tax, without recording any finding on whether the seized jewellery, bullion or cash constituted undisclosed income. All contentions of both parties were left open to be raised in appropriate proceedings.

Final Outcome

The writ petitions, including that of Ananya Vir, were allowed. The Court directed that upon deposit of ₹1.25 crore each as advance/self-assessment tax by the specified petitioners on or before 15.01.2026, the Income Tax Department shall release the entire seized jewellery, bullion and cash/forex (approximately 6.862 kg of gold jewellery and bullion and ₹40 lakh in cash/forex) within seven days. All petitions were disposed of accordingly, with liberty to the parties to raise their respective pleas in subsequent proceedings.

 Link to download order https://www.mytaxexpert.co.in/uploads/1769503775_ANANYAVIRVsASSISTANTDEPUTYCOMMISSIONEROFINCOMETAXCENTRALCIRCLE27NEWDELHIANDANR.pdf

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