The burden of proof lies on the parties involved in a transaction to establish the legitimacy of the source of income, especially in cases of benami transactions.

JUDGMENT :

ASHOK KUMAR VERMA, J.

1. The petitioners- Deepika Oberoi and Hina Oberoi who were minor at the time of filing this petition under Articles 226/227 of the Constitution of India have sought a writ of certiorari etc. for setting aside the impugned action of the respondent Nos. 1 to 3- Union of India/Income Tax Department (for short “the Income Tax Department”) whereby they have encashed 4 FDRs of the petitioners in the denomination of Rs. 20,000/- each made on 6.5.1996. The petitioners have also sought a writ of mandamus thereby directing the said respondents to return and restore the said FDRs to their original status with damages and interest thereon.

2. Briefly culled out the facts of the case of the petitioners are that respondents-Income Tax Department encashed 4 FDRs dated 6.5.1996 in the denomination of Rs. 20,000/- each which were in the names of Deepika Oberoi, Hina Oberoi, Baby Deepika Oberoi and Baby Hina, daughters of Kavita Oberoi and deceased Shanti Nath. The said 4 FDRs which were lying with respondent no.4-Oriental Bank of Commerce, Yamunanagar (for short ‘the Bank’), had been encashed by the respondents-Income Tax Department. Petitioners- Deepika Oberoi and Hina Oberoi who are minors have approached this Court through their mother and guardian-Kavita Oberoi being the LRs of deceased Shanti Nath who was an employee-cum-driver of one Ved Parkash Anand, a businessman of Yamunanagar. Deceased Shanti Nath is said to have died in an accident on 26.04.1996 at the age of 38 years alongwith one Ashwani Kumar, son of Ved Parkash Anand. The petitioners have challenged the action of the respondents, who have encashed the aforesaid FDRs, through this petition in the year 1997.

3. Respondent Nos. 2, 3 and 4 have filed their written statements. In the written statements, the case of the respondents have averred that a search and seizure operation was launched by the Income Tax Department on 24.12.1996 in the premises of one Ved Parkash Anand, a businessman of Yamunanagar, Surinder Anand, Smt. Bindoo Anand, Raj Pal Anand (brother of Ved Parkash Anand) and his daughters Smt. Asha Talwar and Smt. Varsha Taneja. A large number of benami assets of the Anand Group were recovered. Smt.Varsha Taneja in her statement stated that the briefcase, which contained the benami FDRs and other documents, was handed over to her by her brother, Sanjay Anand. It was from the contents of the said briefcase, the Income Tax Department came to know that Anand Group is involved in all these dubious transactions. The said 4 FDRs of Rs.20,000/- each which actually belonged to Hina Oberoi, Rupinder Oberoi, Baby Hina and Deepika Oberoi alongwith one more FDR made on 3.8.1996 in the denomination of Rs.14,000/- in the name of Kavita Oberoi, mother and guardian of the petitioners which has never been challenged by her, were held benami by said Sanjay Anand who is said to be in partnership firm, M/s Om Parkash Sanjay Kumar and M/s Lime and Chemical Industries. During the assessment proceedings, the statement of Kavita Oberoi, mother and guardian of the petitioners was recorded on 06.1.1997. She stated that she was not even aware of any bank account held by her or by her husband in any bank. The amount of these FDRs were assessed in the hands of Sanjay Anand vide order dated 26.02.1998 passed by the Assistant Commissioner of Income Tax, Investigation Circle, Yamunanagar (Annexure R-1). On appeal filed by Sanjay Anand, the Tribunal held vide order dated 03.01.2003 (Annexure R-2) that the said FDRs were rightly added in the income of assessee- Sanjay Anand as no third party has made the claim of these FDRs.

4. Learned counsel for the petitioners, inter alia, contends that the action of the Income Tax Department is totally illegal and arbitrary. It is contended that many FDRs belonging to public at large had also been taken away by the respondents- Income Tax Department which is also clear from a letter dated 25.03.1997 written by respondent-Bank. It is vehem