In a significant ruling by the Delhi High Court, the case of Amnesty International India Pvt Ltd vs Union of India & Ors regarding the freezing of bank accounts has been resolved. The court has ordered the immediate defreezing of accounts, highlighting the unsustainable nature of the continued freeze beyond the legal provision’s rigour period. Stay updated on this landmark decision!
Facts
- Petitioners were required to explain their transactions with the bank accounts but failed to respond to the summons under Section 131(1A) of the Act.
- Revenue was directed to obtain instructions on the issue.
- Various persons/entities were involved in hawala transactions using bogus RTGS and cryptocurrencies.
- Three weeks’ time was granted to the Revenue to file a reply.
- Accounts of the petitioners were debit frozen post a search and seizure operation due to suspicious transactions.
Arguments
- The petitioner, M/S Amnesty International India Private Limited, filed a petition against the Union of India & Ors. regarding the freezing of their account.
- The petitioner argued for the extension of the freezing of the account in their petition.
- The case was registered as W.P. No. 56621/2018 in the court.
- The arguments of the petitioner were presented through Mr. Indruj Rai, SSC, Mr. Sanjeev Menon, and Mr. Rahul Singh, JSCs.
- Accounts of the petitioners were lawfully frozen during the search operation
- The case of the petitioners has been sent for assessment to the relevant Assessing Officer
- The AO should be allowed to consider defreezing the bank accounts after completion of scrutiny assessment
- The rigour period ended on 30.06.2023, making continued freezing of accounts unsustainable
- Continued freezing of bank accounts goes against the provisions of the Act
Analysis
- The bank account in question was frozen on 30 April 2023.
- The Investigation Department’s report was uploaded on the portal on 01 March 2024.
- During the hearing on 01 April 2024, it was noted that the AO had received a report from the Investigation Wing advising action under Sections 147 and 148 of the Income Tax Act, 1961.
- The mentioned legal position was highlighted on the first hearing date.
- The Revenue has failed to provide any justification for the impugned action.
- The AO has not taken any steps under Section 147 to support the freeze of the bank account.
- No valid reason has been presented for the continued freeze of the bank account.
Decision
- Writ petitions allowed with a direction to defreeze the concerned bank accounts of the petitioners immediately
- Pending applications to be disposed of along with the writ petitions
- Writ petitions scheduled for final disposal on 05.04.2024
- Letter dated 30.04.2023 declared unenforceable beyond sixty days from issuance
Case Title: M/S POOJA TRADING CO. Vs. DEPUTY DIRECTOR OF INCOME TAX (INV) & ANR. (2024:DHC:3721-DB)
Case Number: W.P.(C)-735/2024
