The Income Tax Department seizes assets, and they are stolen from the bank locker they are stored in – the situation is real, and the taxpayer whose seized jewellery was stolen, won a compensation case in Allahabad High Court.
According to an ET report, during an income tax raid at a Mr Jain’s premises, officials discovered and confiscated gold jewellery valued at more than Rs 90 lakh, as he failed to provide documentation for its possession. However, in an unusual turn of events, the confiscated jewellery, which was stored in a nationalised bank’s secure facility, disappeared.
The theft at the bank occurred whilst the income tax proceedings concerning the jewellery seizure were still ongoing. Consequently, Jain approached the Allahabad High Court to file a lawsuit against Union Bank of India, the Income Tax Department and the bank’s branch manager, seeking compensation for his substantial loss, the ET report said.
Seized jewellery stolen: How taxpayer won the case
In his legal petition, Jain demanded compensation of Rs 94 lakh (94,64,844) along with 9% interest per annum from July 30, 2025 until the settlement of payment.
In its verdict (WRIT TAX No. – 4160 of 2025) dated September 25, 2025, the Allahabad High Court made the following observations:
- The court noted evident delays in the process by Income Tax Authorities.
- The petitioner (Jain) should have received the funds in 2023 after agreeing to the settlement amount of Rs 41 lakh (41,52,146).
- The petitioner (Jain) has not received any compensation for the seized jewellery that the respondent Bank lost.
- The court stated that the petitioner (Jain) is entitled to compensation, regardless of whether it comes from the respondent Bank or Income Tax Authorities. Since the Income Tax Authorities initially seized the jewellery, they bear responsibility for its loss and must provide the compensation.
The High Court of Allahabad issued instructions requiring Income Tax Authorities to examine the valuation submitted by the petitioner (Jain) on July 30, 2025. Following verification of the valuation, authorities must process the payment within four weeks from the specified date.
The judgement read: “We make it clear that the petitioner (Jain) should be paid the amount within the aforesaid period, otherwise the Income Tax Authorities shall be liable to pay penal interest of 12% on the valuation of the Jewellery starting from the date of seizure of the said jewellery. The Income Tax Authorities are at liberty to recovery the amount from the respondent Bank in accordance with law. With the aforesaid directions, the writ petition is disposed of.”
Source #TOI
