G.L.Jain v. Commissioner of Income Tax-Xi

Order dasti.

S. RAVINDRA BHAT, J

AUGUST 28, 2012

R.V. EASWAR, J

WP (C) 876/2012 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI DECIDED ON: 28.08.2012 + WP (C) 876/2012 G.L. JAIN ..... Petitioner Through: versus COMMISSIONER OF INCOME TAX-XI & ORS. ..... Respondents Through: Mr. Deepak Chopra, Sr. Standing Counsel for Income Tax Deptt. with Mr. Harpreet Singh Ajmani, Advocate. Mr. M.P. Singh, Advocate for UOI. CORAM: MR. JUSTICE S. RAVINDRA BHAT MR. JUSTICE R.V. EASWAR MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT) % ADMIT. 2. With consent of counsel for the parties, matter was heard finally for disposal. 3. The petitioner seeks a writ or direction to the respondents to allow interest to the tune of Rs.22,85,842/- for the alleged inordinate delay in releasing the amount of Rs.92,82,700/- under Section 132-B (3) of the Income Tax Act. WP (C) 876/2012 Page 2 4. The brief facts of the case are that a search and seizure action was conducted on 16.02.2005, and cash amount of Rs.96,14,700/- was found out of which Rs.92,82,700/- was seized under a memo. This was subsequently remitted to the CIT for the purpose of depositing it in to its deposit account. The petitioner represented for release of the amount on 28.03.2005. Subsequently, upon receipt of the notice under Section-153A, the writ petitioner filed a return of income tax for assessment of block years 1999-2000 to 2004-2005 on 19.09.2006. The assessment was completed on 27.12.2006 for this year resulting in NIL tax demand. Apparently, the writ petitioner kept on representing to the AO as well as CIT by various letters dated 2.1.2007, 9.1.2007, 29.1.2007, 2.12.2010 and 16.3.2011 to release the cash amount but to no avail. 5. In the meanwhile, a sum of Rs.33,72,907/- was adjusted against the demand outstanding against the petitioner's brother vide letter dated 23.02.2007. Eventually, on 9.3.2011, Rs.54,09,793/- was released to the petitioner; balance of Rs.5 Lac was released on 5.4.2011. After these events, the petitioner made a series of representation on 11.4.2011, 3.5.2011, 6.5.2011 and 1.12.2011 for grant of interest in respect of the amount which has been withheld for about 6 years. 6. It is submitted that by virtue of the provisions under Section- 132B (4) read with Section 244A, the writ petitioner is entitled to interest for the entire period on the sum of Rs.92,82,700/- which was illegally withheld. Learned counsel also urged that the adjustment WP (C) 876/2012 Page 3 made by order dated 23.2.2007 of the sum of Rs.33,72,907/- is unauthorized and could not have been done in terms of Section-132 B (1). 7. After notice was issued, learned counsel for the respondents sought instructions. In the meanwhile, on 11.5.2012, a sum of Rs.4,72,783/- was paid to the petitioner towards interest under Section-132 B (4) for a period of 16 months i.e. on expiry of 120 days from the last date of authorization for search (2.5.2005) which came to 2.9.2005 till the date of assessment i.e. 26.12.2006. The calculation and reasons in support of the interest paid by the respondents was furnished to the Court through counsel. It reads as follows: - "XXX XXX XXX (ii) Section 132B (4) (a)/(b) provides for granting interest at the rate of 1/2 % for every month or part of a month from date of immediately following the expiry of the period of 120 days from the date on which the last of the authorization for the search under section 132 or requisition 132A was executed to the date of completion of assessment. The interest shall be provided on the amount of money seized u/s 132, as reduced by the amount of money, if any, released under the first proviso to the clause (i) of sub section (1) of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (i) of sub section (1), exceeds the aggregate of the amount required to meet the liabilities referred to in clause (i) of sub section (1) of section 132. The existing liability as per clause (i) of sub section 91) includes the liability determined on completion of the asses