ANIL DEV SINGH, J. - (1.)THIS is a writ petition whereby the petitioner challenges the order, dt. 14th March, 1988, made by the fourth respondent, the ITO, Special Circle II, Jalandhar, and the order dt. 28th Feb., 1989, passed by the second respondent, the CIT, Central Revenue Building, Jalandhar, and also seeks an order directing the respondents to release and hand over the jewellery alleged to be belonging to the petitioner which was seized on 14th March, 1988. The facts giving rise to the writ petition are as under
The petitioner was married to Shri Suresh Singal on 27th Nov., 1987. After her marriage, she resided with her husband at the house of her father -in -law, Shri Prithipal Singal at 34/56, Punjabi Bagh (West), New Delhi. The petitioner claims that at the time of her marriage, she had brought 454.2 grams of gold ornaments to the house of her in -laws. It is the case of the petitioner that she had acquired the ornaments from her personal income which were duly declared before the ITO at Bombay before her marriage. The petitioner asserts that she filed four returns under the voluntary disclosure scheme on 30th March, 1987, for the asst. yrs. 1982 -83 to 1986 -87 and along with the returns she had filed balance -sheets and papers disclosing the acquisition of the aforesaid jewellery by her. According to the petitioner, the returns filed by her were accepted by the IT Department and an assessment order with regard thereto was framed on 6th Oct., 1987. The petitioner also asserts that her mother -in -law, Smt. Krishna Kumari, had given gold ornaments weighing 149.3 grams at the time of her marriage. Therefore, the petitioner claims that she owned and possessed jewellery weighing 603.5 grams. On 10th Dec., 1987, the IT Department conducted a search under s. 132 of the IT Act, 1961, at the residence of Shri Prithipal Singal at 34/56, Punjabi Bagh (West), New Delhi. During the search, the first respondent, the Asstt. Director of Income -tax, Mayur Bhawan, New Delhi, seized jewellery weighing 405.03 grams from the house of Shri Prithipal Singal. The jewellery was seized under a panchnama (annexure "J" to the writ petition). On 1st Jan., 1988, the petitioner filed an affidavit before the ITO, Special Circle II, Jalandhar, wherein she stated that ornaments detailed at Sl. Nos. 1, 2, 4 -9 of the panchnama (annexure "J") weighing 405.03 grams belonged to her. On 14th March, 1988, the fourth respondent passed an order under s. 132(5) of the IT Act, 1961, in regard to the search and seizure conducted at the premises of Shri Prithipal Singal. The order shows that the same was passed in regard to Shri Prithipal Singal considering the jewellery to be belonging to him. By that order, the ITO declined to release the assets seized during the search of the house of Shri Prithipal Singal on 10th Dec., 1987. Aggrieved by the order passed by the fourth respondent, the petitioner filed an application under S. 132(11) of the IT Act on 30th Aug., 1988, before the second respondent, CIT, Jalandhar Range, Jalandhar. In that application, the petitioner, inter alia, stated that the gold ornaments weighing 405.03 grams seized during the course of search and seizure operations, belonged to her and the same were seized from her possession. It was also averred that the petitioner along with her husband was residing with Shri Prithipal Singal at 34/56 Punjabi Bagh (West), New Delhi. Furthermore, the petitioner stated that she had acquired the jewellery before her marriage and the same was declared under the voluntary disclosure scheme at Bombay. The father -in -law of the petitioner also filed an application under S. 132(11) before the CIT, Jalandhar, on 8th Nov., 1988. The CIT, by his order dt. 28th Feb., 1989, dismissed the application of Shri Prithipal Singal holding that the cash and jewellery were rightly seized by the ITO to meet the liabilities estimated under S. 132(5) of the IT Act. The petitioner is aggrieved of the order dt. 14th March, 1988, and order dt. 28th Feb., 1989, passed by the ITO, Special Circle II, Jalandhar, and the CIT, Jalandhar, respectively.

(2.)I have heard learned counsel for the parties. It is not disputed by the respondents that the petitioner was not given any opportunity of hearing before the passing of the impugned orders. At the foot of the panchnama, it is mentioned that jewellery was also seized from the person of the two ladies, Smt. Krishna Singal and Smt. Sunita Singal, but six churies and one mangalsutra were returned to them.
Having regard to the aforesaid endorsements in the panchnama, the petitioner was a person who ought to have been given an opportunity of being heard. It is not disputed that when the impugned order under S. 132(5) was passed by the second respondent, she was not heard.

The application under S. 132(11) of the IT Act filed before the CIT, Jalandhar, was neither considered nor disposed of by him. She was not given any opportunity of hearing either by the second respondent or the fourth respondent. It is no consolation for the petitioner that the application of Shri Prithipal Singal was disposed of by the CIT. Rather disposal of the application of Shri Prithipal Singal by the CIT works to the prejudice of the petitioner as without hearing her on her application, the application filed by Shri Prithipal Singal was dismissed. Learned counsel for the petitioner submits that 454.2 grams of gold ornaments were acquired by the petitioner before her marriage and for this purpose she had filed a return before the ITO. He further contended that it is natural that the petitioner would be keeping her jewellery with herself at her in -laws' place for her use as she was newly married. Learned counsel further canvassed that the conclusion of the second and fourth respondents that she would not be keeping the jewellery with her and would have left the same at some safe place instead of keeping it at her in -laws' house, is without any basis. He also alluded to the fact that the CIT was not right in observing that the petitioner and her husband were staying separately at 39/44, Punjabi Bagh, New Delhi, and not at the residence of Shri Prithipal Singal at 34/56, Punjabi Bagh (West), New Delhi. He pointed out the mistake in this regard by reference to the order passed by the fourth respondent. The fourth respondent in the impugned order has clearly stated that the petitioner and her husband were staying at 34/56, Punjabi Bagh (West), New Delhi, with Shri Prithipal Singal. This is clear from the following observations of the fourth respondent :

"It is added that out of total cash balance of Grover Timber Private Ltd. amounting to Rs. 3,43,080 a sum of Rs. 2,99,300 was lying with Shri Suresh Singal, who lives with his father, Shri Prithipal Singal, in 34/56, Punjabi Bagh (West), New Delhi."

Learned counsel submitted that the entire premise on the basis of which the second respondent came to the conclusion that the petitioner was staying separately from her father -in -law and the jewellery seized from the house of the father -in -law did not belong to her, was incorrect. He also reiterated that the jewellery seized by the IT Department belonged to the petitioner and she had disclosed the same under the amnesty scheme before her marriage. On the other hand, learned counsel for the respondents submitted that the jewellery did not belong to the petitioner and belonged to her father -in -law and the same was rightly seized in order to meet the liabilities of Shri Prithipal Singal under S. 132(5) of the IT Act. He also contended that at the time of the raid, the petitioner did not claim the jewellery to be belonging to her. He further submitted that neither her father -in -law nor her mother -in -law at the time of the raid claimed that the jewellery belonged to their daughter -in -law. He also canvassed that while the voluntary disclosure scheme gave immunity to the person making such a disclosure, no such immunity was available to another person who was the actual owner of the disclosed asset. In this regard, learned counsel relied upon the decision of the Supreme Court in Jamnaprasad Kanhaiyalal vs. CIT (1981) 23 CTR (SC) 146 : (1981) 130 ITR 244 (SC).

(3.)I have considered the submissions of learned counsel for the parties. The merits of the controversy, whether the ornaments belonged to the petitioner or to her father -in -law cannot be gone into in a writ petition under Art. 226 of the Constitution. It seems that the only question which can be gone into in this petition is whether the principles of natural justice have been violated in so far as the petitioner is concerned. Undoubtedly, there has been a violation of principles of natural justice qua the petitioner. The jewellery was seized from a house where the petitioner was staying. Some of the jewellery was seized from her person as is apparent from the panchnama (annexure "J"). The panchnama also mentions the name of the petitioner though it is not clear as to whether her name occurs because she was residing at 34/56, Punjabi Bagh (West), New Delhi, or whether the jewellery belonged to her. In these circumstances, the petitioner was an affected party and she should have been heard by the ITO and also by the CIT. Both these authorities passed the orders without hearing the petitioner, thus infringing her right to be heard and to have her say in the matter. The CIT even failed to dispose of her application under S. 132 (11) of the IT Act. It is well -settled that a party must be heard before passing an order adverse to his/her interests. In the instant case, the petitioner has not been heard and her application under s. 132(11) of the IT Act has not been disposed of. Therefore, I am of the view that the impugned orders cannot be sustained. In the circumstances, however, it will be sufficient if the impugned order dt. 28th Feb., 1989, passed by the second respondent, in so far as it relates to 405.03 grams of gold seized under the panchnama (annexure "J" to the writ petition) is quashed as it has been passed without disposing of the application of the petitioner under S. 132(11) of the IT Act, thereby rendering her application otiose. Accordingly, the order dt. 28th Feb., 1989, passed by the second respondent to the extent indicated above is hereby quashed. The second respondent is also directed to dispose of the application of the petitioner under S. 132(11) of the IT Act after providing her with an opportunity of hearing. It will be open to the second respondent to pass fresh orders on the application of Shri Prithipal Singal under S. 132(11) of the IT Act regarding 405.03 grams of gold in the light of the decision on the application of the petitioner under S. 132(11) of the IT Act, 1961. The application of the petitioner will be decided by the second respondent within six weeks. The rule is made absolute.