Case at a glance
Case Name: Miraj Digvijay Shah v. ACIT
- Subject
- Inspection of seized jewellery kept in sealed packages, during Section 263 proceedings
- Issue
- Before reopening a sealed package of seized jewellery for inspection under Rule 112(13), must the Revenue give the assessee the reasons or information that prompted the inspection?
- Citation
- (2026) 349 CTR 389; 183 taxmann.com 174 (Cal)
- Court
- Calcutta High Court (writ)
- Assessment year
- 2023-24
- Provisions
- Rule 112(13), Income-tax Rules 1962; Section 263, Income-tax Act 1961
- Outcome
- In favour of Revenue
Background
Facts of the Case
- Jewellery was seized from the assessee during search operations and kept in sealed packages.
- The PCIT initiated revision proceedings under Section 263 and, as part of that inquiry, sought to inspect the seized assets.
- The Revenue issued notices to the assessee for inspection of the sealed jewellery.
- The assessee filed a writ petition, arguing that the reasons and information behind the inspection should have been supplied before it was carried out.
The ruling
Summary of Decision: What the High Court Held
- The power under Rule 112(13) to reopen a sealed package does not depend on any information or “reason to believe”. It can be used even without such information, as long as it is needed for any purpose of the Act.
- Neither the Act nor the Rules require the Revenue to share its reasons with the person from whom the items were seized. Only reasonable notice to be present has to be given.
- The assessee’s presence is meant to keep the process transparent and rule out tampering. Inspection of seized jewellery is not an invasive act like a search and does not intrude into private space.
- The PCIT may make any inquiry he considers necessary in Section 263 proceedings, so the inspection notice did not breach Rule 112(13). The writ petition was dismissed.
Practice point
Key Takeaway on Inspection of Seized Jewellery
- An inspection notice cannot be resisted only because the reasons for it were not shared.
- What the assessee is entitled to is reasonable notice and the right to be present. Attend, and check that the seals are intact before the package is opened.
- A Section 263 inquiry can extend to seized assets, including physical inspection.
- Any objection is better aimed at the Section 263 proceedings themselves than at the inspection notice.
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