IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sanjeet Singh and others ….Petitioners versus Principal Director of Income Tax (Investigation), Chandigarh and others …Respondents

1. The date when the judgment is reserved 31.01.2026 2. The date when the judgment is pronounced 18.02.2026 3. The date when the judgment is uploaded on the 19.02.2026 website

4. Whether only operative part of the judgment is Full pronounced or whether the full judgment is pronounced

5. The delay, if any, of the pronouncement of full Not judgment, and reasons thereof applicable CORAM: HON'BLE MR. JUSTICE DEEPAK SIBAL HON'BLE MS. JUSTICE LAPITA BANERJI Present: Ms. Radhika Suri, Senior Advocate with Ms. Parnika Singla, Advocate and Mr. Abhinav Narang, Advocate for the petitioners.

Mr. Ranvijay Singh, Senior Panel Counsel for the respondents.

DEEPAK SIBAL, J.

1. Through the present petition, the petitioners seek release of their jewellery, seized by the Income Tax authorities during search conducted on 03.03.2022 at the residential premises of petitioner No.1 because according to the petitioners, withholding of release of the said jewellery is arbitrary and violates the terms of the circular dated

16.10.2023, issued by the Central Board of Direct Taxes (for short – the CBDT).

THE FACTS

2. On 03.03.2022, the income tax authorities conducted a search operation at the residential premises and bank lockers of petitioner No.1 resulting in the seizure of jewellery which according to the income tax authorities was undeclared. A Panchnama dated 03.03.2022 with regard to the seized jewellery of petitioner No.1 and separate panchnama dated 05.03.2022 with regard to the seized jewellery of petitioner No.2 was prepared.

3. Petitioner No.1 stated before the respondent authorities that out of the seized jewellery, 901.030 grams belonged to petitioner Nos. 3 and 4 and the remaining seized jewellery was that of petitioner Nos. 1 and 2, who were husband and wife and that the jewellery of petitioners No.1 and 2 was wedding jewellery; received by way of inheritance; gifts and that some of it had also been purchased by petitioner Nos. 1 and 2.

4. Through assessment order dated 28.03.2024, the stand of petitioner No.1 with regard to 901.030 grams of the seized jewellery belonging to petitioner Nos. 3 and 4 was accepted because such jewellery was found to have been duly declared by petitioner No.4 in the wealth tax returns 7iled much prior to the search operation at the residential premises and bank lockers of petitioner No.1. However, the stand of petitioner No.1 with regard to the remaining jewellery was rejected resulting in the said jewellery being added to the income of petitioner No.1. Petitioner No.1 challenged the assessment order dated 28.03.2024 through 7iling of an appeal under Section 246(A) of the Income Tax Act, 1961 which remains pending.

5. In the meanwhile, petitioner Nos. 3 and 4 7iled a representation with the respondent authorities for release of 901.030 grams of the seized jewellery. It was explained by petitioner Nos. 3 and 4 that the said jewellery was duly declared by petitioner No.4 in the wealth tax returns 7iled for the assessment year 2012-2013 and that such jewellery also found reference in the assessment order dated

18.12.2019 passed under Section 63 of the Wealth Tax Act, 1957.

6. On 29.04.2024, petitioner No.1, through his Chartered Accountant, also wrote to the income tax authorities seeking release of the remainder of the seized jewellery which, through assessment order dated 28.03.2024, had been added to petitioner No.1’s income. When such representation was not responded to, the same request was repeated through subsequent representations dated 03.05.2024, 08.07.2024 and 09.09.2024.

7. In response to petitioner No.1’s afore request, through letter dated 19.11.2024/ 03.12.2024, the of7ice of the Principal Commissioner of Income Tax (Central), Gurugram wrote to the Joint Commissioner of Income Tax, Central Range, Chandigarh, asking the latter to fo