Capl/5268/2022 Of Vidit Kumar Agarwal v. Sri Arun Kumar And 2 Other Assistant Commissioner Income Tax Range -2(1)(1)

Court No. - 1 Case :- CONTEMPT APPLICATION (CIVIL) No. - 5268 of 2022 Applicant :- Vidit Kumar AgarwalOpposite Party :- Sri Arun Kumar And 2 Other Assistant Commissioner Income Tax Range -2(1)(1)Counsel for Applicant :- Suyash AgarwalCounsel for Opposite Party :- Gaurav Mahajan Hon'ble Salil Kumar Rai,J. The present contempt application has been filed pleading willfuldisobedience of the order dated 06.10.2021 passed in Writ Tax No.988 of 2018. The relevant part of the order dated 06.10.2021 is reproducedbelow:- Keeping in mind the provisions of Section 132 B (4) (b) read with Section244A (1) (b), the petitioner is further found entitled to interest at the rate of 1and 1/2 per cent per month from the expiry of 20 days from the lastauthorization issued against him, arising from the seizure/detention ofRs.32,34,600/- made by the police authorities, on 03.06.1998. Thus the petitioner would be entitled to a refund of Rs. 16,00,000/- togetherwith interest as above. The interest at that rate would be applied from thatstart date, up to the date of actual payment made to the petitioner, on theamount of 16,00,000/- only. As to the balance amount of the other persons namely Sri Ram KirshnaAgarwal (vis-a-vis for seizure of Rs. 8,00,000/-) and Sri Deepak KumarAgarwal (vis-a-vis for seizure of Rs. 8,34,600) they may remain similarlyentitled. We find that interest of justice has been met in the present case inasmuch asthe block assessment order arising from the seizure, was made in the status ofA.O.P. While that finding may have been erroneous, the Tribunal quashed theentire assessment proceedings, without allowing the revenue authorities tomake a regular reassessment. Hence we do not find it a fit case to award anyfurther amount to the petitioner, by way of cost or compensation. The writ petition is thus allowed. No order as to costs. Subsequently the order dated 06.10.2021 was corrected by anorder dated 18.11.2022 passed on an application filed forcorrection of the order dated 06.10.2021 numbered as Civil Misc. Correction Application No. 3 of 2022. The application was filed bythe opposite parties in Writ Tax No. 988 of 2018. The order dated18.11.2022 is reproduced below:- Re: C.M. Correction Application No. 3 of 2022 1. Heard Sri Gaurav Mahajan, learned counsel for the applicant and ShriRakesh Ranjan Agrawal, Senior Advocate, assisted by Shri Suyash Agarwal,learned counsel for the assessee. 2. In the first place, there is a typographical error while specifying the periodfrom which interest is to be computed in view of the clear language of Section132B(4)(b) of the Income Tax Act, 1961. That period is 120 days. 3. Typographical error mentioning of the period '20' days appearing in fourthline of the second paragraph of the page number 3 of the order dated06.10.2021 is corrected to read '120' days. 4. As to the second correction prayed to correct the rate of interest 1.5%, thesame is declined. 5. Keeping in mind the interest liabilities that arise under Section 132B(4)(b)read with Section 244A(1)(b) of the aforesaid Act, in exercise of jurisdictionunder Article 226 of the Constitution of India, the Court had provided forinterest payment at the rate of 1 and 1/2 per cent (cumulatively). That beingthe exercise on merits, no error is shown to exist on the face of record as mayrequire correction. 6. Accordingly, application is disposed of. It is on record and admitted by the parties that Rs. 42,32,000/- hasbeen paid to the applicant. The opposite parties, i.e., alleged contemners and the officers ofthe Revenue plead that the aforesaid payment is in compliance ofthe order passed by this Court. The applicant pleads that the aforesaid payment is not in fullcompliance of the order passed by this Court as the amount paid tothe applicant has been computed after giving only simple interestto the applicant even though as a consequence of the order dated06.10.2021, corrected by the order dated 18.11.2022, the applicantwas entitled to compound interest on the principal amount. 6. Accordingly, application is disposed of. It is on record and admitted by the parties that Rs. 42,32,000/- hasbeen paid to the applicant. The opposite parties, i.e., alleged contemners and the officers ofthe Revenue plead that the aforesaid payment is in compliance ofthe order passed by this Court. The applicant pleads that the aforesaid payment is not in fullcompliance of the order passed by this Court as the amount paid tothe applicant has been computed after giving only simple interestto the applicant even though as a consequence of the order dated06.10.2021, corrected by the order dated 18.11.2022, the applicantwas entitled to compound interest on the principal amount. The contention of the applicant is not accepted. A perusal of the order dated 06.10.2021 extracted above showsthat the interest was awarded to the applicant under Section 244 A(1) (b) read with Section 132 B (4) (b) of the Income Tax Act which provides only for payment of simple interest. The observation of the Court in the order dated 18.11.2022 that ithad provided for interest payment at the rate of one and a halfpercent (cumulatively) is not a part of the order dated 06.10.2021.The order dated 18.11.2022 was passed on an application filed bythe opposite parties for correction of the order and the Court in itsorder dated 18.11.2022 states that the order does not require anycorrection on the aforesaid count. No provision under the IncomeTax Act has been brought to the notice of the Court showing theformula for computing cumulative interest. It is the plea of theapplicant that cumulative interest means compound interest. Thereis no statutory provision from which any inference can be drawnthat cumulative interest means compound interest. In any case, thelack of any statutory provision regarding payment of cumulativeinterest or the formula to calculate the same leads to the conclusionthat the opposite parties cannot be held liable for willfuldisobedience of the order of this Court. As the order passed by the Writ Court has been complied by theopposite parties, no further orders are required to be passed in thepresent contempt application. The application is disposed of and consigned to records. Order Date :- 29.4.2025Vipasha