1. This writ petition under Article 226 of the Constitution is directed against the order of the Commissioner of Income-tax, Allahabad Range, Allahabad, dated November 24, 1978, refusing to release and return the seized assets unconditionally to the petitioner.
2. The brief facts are these. The petitioner, Bhagwat Prasad, carries on money-lending and pawning business at Jajauli in the district of Azamgarh. A search was conducted of his business premises and residence under Section 132(1) of the I.T. Act, 1961, hereinafter ' the Act', from October 18 to 20, 1974, and some account books, assets consisting of silver ornaments, old silver coins and Z.A.C. Bonds were seized by the income-tax authorities. The ITO passed an order under Section 132(5) of the Act on January 13, 1975, and estimated the undisclosed income relevant for the assessment year 1975-76 at Rs. 9,05,739, tax on which was determined at Rs. 8,41,661. Another order under that provision was made on April 5, 1977, and the total concealed income for the assessment year 1975-76 was estimated at Rs. 18,46,950. The total tax liability and penalty were determined at Rs. 18,27,952, and the total value of the assets seized and retained was Rs. 8,54,526. Regular assessment for the aforesaid assessment year was made by the ITO under Section 143(3) of the Act on October 27, 1977, and now the petitioner's total income was estimated at Rs. 2,20,270, raising a demand of Rs. 1,57,382 by way of tax. After that order some of the assets of the value of Rs. 1,52,400 were released and the remaining assets of the value of Rs. 5,34,744 were retained.
3. The petitioner filed an appeal against the assessment order dated October 27, 1977, before the Commissioner (Appeals), Allahabad, disputing its legality as well as the quantum of income estimated. The Commissionerby his order dated November 15, 1978, set aside that assessment order and remanded the case to the ITO for making the assessment afresh. After that decision, the petitioner moved an application before the Commissioner, Allahabad Range, Allahabad, on November 22, 1978, praying for unconditional release of the seized and retained assets. The Commissioner, Allahabad, rejected that application by his order dated November 24, 1978, and now the petitioner has come up to this court by way of this writ petition for quashing the said order and for a mandamus directing the ITO, A-Ward, Azamgarh, respondent No. 2, to release the seized and retained assets forthwith to the petitioner.
4. Two submissions were made before us on behalf of the petitioner by his learned counsel Sri K.B. Bhatnagar; firstly that, as provided in Clause (i) of Sub-section (1) of Section 132B, the assets retained are to be dealt, inter alia, to defray the amount of liability determined on completion of the regular assessment or reassessment for the relevant assessment year and since in view of Section 153(1)(a)(iii) of the Act it will be a fresh assessment which will be made after the decision of the Commissioner (Appeals), the retained assets cannot be utilised for meeting any liability determined on its basis and, secondly, that after the setting aside of the assessment by the Commissioner (Appeals), there was no existing liability outstanding against the petitioner and, hence, the seized assets cannot be any further retained,
5. We do not find any merit in either of these two submissions. There is no dispute on facts which we have stated above. Under Sub-section (6) of Section 132 of the Act, the assets retained under Sub-section (5) may be dealt with in accordance with the provisions of Section 132B. Section 132B provides for the application of retained assets, and Clause (i) of Sub-section (1) which is relevant for the present purpose reads :
'(1) The assets retained under Sub-section (5) of Section 132 may be dealt with in the following manner, namely :-- (i) the amount of the existing liability referred to in Clause (iii) of the said Sub-section and the amount of the liability determined on completion of the regular assessment or reassessment for all the assessment years relevant to the previous years to which the income referred to in Clause (i) of that Sub-section relates (including any penalty levied or interest payable in connection with such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets.'
6. Apart from the existing liability referred to in Clause (iii) of Section 132(5), this clause speaks of the amount of the liability determined on completion of the regular assessment or reassessment. The scheme of the Act is that an assessment is made under Section 143(3) after giving an opportunity to the assessee of hearing and giving evidence and after taking into account allrelevant material which is on the record of the case. It is in the nature of a regular assessment. Secondly, a best judgment assessment may be made under Section 144 of the Act if the situation mentioned therein obtains in a case. Lastly, in respect of escaped income proceedings are taken under Section 147 and reassessment is made under Section 148. There is no other category of assessment provided in the Act. Section 153 lays down the time limit for completion of assessments and reassessments. Under Sub-section (2A) of this section the time limit for completing the assessment in the present case would be any time before the expiry of two years from the end of the financial year in which the order cancelling the assessment was passed by the Commissioner (Appeals). In other words, under this provision the time limit in the present case for making a fresh assessment would be March 31, 1981. This provision does not provide for any particular category or nature of assessment. As noted above, the Act contemplates only three types of assessments, one under Section 143(3) after hearing the assessee and considering the evidence and other material on record, the second under Section 144 which is a best judgment assessment and is made in certain types of cases, for instance, when the assessee fails to file a return within the time required by the notice issued under Section 139(2) or within the time prescribed in Sub-sections (4) and (5) of Section 139 or where he fails to comply with all the terms of notice issued under Section 142(2) or having made a return fails to comply with all the terms of the notice issued under Section 143(2). The third category of assessment is the one which is made in pursuance of the proceedings under Section 147 and this is called reassessment. This being the position, the assessment which must have been made after the remand of the case will be either a regular assessment under Section 143(3) or an ex parte assessment under Section 144 and for the amount of liability determined on completion of the same, the seized assets retained would be liable to be utilised.
7. As regards the second submission, the regular assessment made by the ITO was only set aside by the Commissioner (Appeals) and the case was remanded for making the assessment afresh. It cannot be said that the assessment for the year under consideration has been completed or that the proceedings have been quashed. The assets retained under Section 132(5), therefore, have to be retained to deal with in the manner provided under Section 132B. It is, hence, not correct to say that there is no liability under the Act outstanding against the petitioner.
8. The petition is, hence, wholly misconceived and is, Accordingly, dismissed with costs.