HYDERABAD: The Telangana High Court directed the Income Tax (I-T) Department to pay Rs 20,000 to Mectec — a firm involved in the purchase of agricultural lands and products — for fabricating a panchanama to draw up a case for seizure and retention of Rs 5 crore belonging to the petitioner company.
It found fault with the I-T Director, Investigation, Hyderabad, for fabricating the panchanama. There were no circumstances for the Principal Director of I-T, Hyderabad, to issue any warrant for search or seizure under the I-T Act on August 28, 2019, when the cash had been handed over to the department by the task force police. Therefore, the seizure of cash from the petitioner and its retention is illegal, it held.
A division bench of Justice MS Ramachandra Rao and Justice T Amarnarth Goud recently allowed the petitions filed by Gujarat-based Mectec and its employee Vipul Kumar Patle by directing the authorities to abstain from conducting any further inquiry pursuant to the said panchanama. The panchanama was prepared as if a search was organised by a team consisting of I-T employees, including the Director, without mentioning the location where the alleged search took place, the bench pointed out.
According to petitioner Vipul, he is not well versed in English but his statements were recorded by the officials in English and was made to sign under coercion. At the I-T office too, his statement was recorded in English and his signature obtained. The counsel appearing for the Ministry of Finance and the I-T Director contended that Vipul was not an employee of the petitioner company and the cash does not belong to Mectec. The bench told the authorities to refund the cash in four weeks to the company with 12 per cent interest from the date of seizure.