Jiwan Kumar v. Principal Commissioner Of Income Tax, Bathinda And Others

CWP No. 23680 of 2019} 1] IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH CWP No. 23680 of 2019Date of decision: 21.1.2020 Jiwan Kumar .. Petitioner V. Principal Commissioner of Income Tax, Bathinda and others.. Respondents CORAM:HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEESH JHINGANHON'BLE MR. JUSTICE AVNEESH JHINGAN Present: |Mr. K. L. Goyal, Senior Advocate withMr. Avneet Singh, Advocate for the petitioner,Mr. Avneet Singh, Advocate for the petitioner, Mr. Vivek Sethi, Senior Standing Counsel withMr.Varun Issar, Junior Standing Counsel for the respondents.Mr.Varun Issar, Junior Standing Counsel for the respondents. AVNEESH JHINGAN, J. The writ petition has been filed seeking quashing of order dated12.6.2019 whereby interest on the seized amount has been restricted till thedate of assessment. Further prayer is for direction to the respondents to payinterest on the seized amount for the period from 21.1.2014 to 4.7.2017. The facts are that cash of415,02,530/- was seized by theInvestigation Wing of Income Tax Department from the petitioner onl6.1.2012, while he was travelling trom Patiala to Mansa. The cash wasimpounded vide intimation dated 12.1.2012. The petitioner filed returndeclaring total income ofL2,04,330/-. The assessment for the year 2012-13was framed vide order dated 21.1.2014 whereby addition ofL50,000/- wasMANOJ KUMAR2020.01.31 09:54I attest to the accuracy andmade. Agegrieved of the assessment order, an appeal was filed and additioauthenticity of this documentHigh Court,Chandigarh CWP No. 23680 of 2019|2] ot450,000/- was reduced to435,000/- by the I[(*]Appellate Authority, theappeal was partly allowed on 27.8.2014. Thereafter, proceedings undersection 263 of the Income Tax Act, 1961 (for short, ‘the Act’) wereundertaken and the order dated 21.1.2014 passed by the Assessing Officerwas set aside. The Assessing Officer was directed to decide the matterafresh after giving opportunity of hearing to the assessee and examining theevidence. An appeal was preferred against the revisional order, the Tribunalallowed the appeal on 26.8.2016 allowed the appeal and order of revisionwas quashed. The order of the Tribunal was accepted by the revenue. Inspiteof various requests, the amount seized was refunded to the petitioner onlyon 4.7.2017. As the amount was kept For almost 5 years, the petitionerapproached the respondents for grant of interest. When no action was taken,CWP No. 7536 of 2019 was filed, the petition was disposed of on19.3.2019 directing the respondents to pass a speaking order. Theapplication was considered, order dated 12.6.2019 was passed under Section132B(4) of the Act and interest for the period from 5.5.2012 to 21.1.2014amounting to41,57,765/-was paid after 21.1.2014. The issue involved in narrow circumference is that there wasno demand against the petitioner justifying retention of the seized amount,yet no interest was paid. The stand taken by the respondents in the written statement isthat interest as per the provisions of Section 132B(4) of the Act has beenpaid and there is no provision for payment of interest. Reliance is placedupon the decision of Madhya Pradesh High Court in |Manohar Lal v.Commissioner of Income Tax and others&(2001) 249 ITR 1. It would be pertinent to note here that the respondents have not CWP No. 23680 of 2019}3] controverted the factual position that there was no demand pending againstthe petitioner for the said period. There is no plausible reason put forthjustifying non-refund of amount even after finalisation of the assessmentand the fact that the order of the Tribunal setting aside the revisional orderwas accepted by the revenue. The provisions of Sections 132B(4) and 244A of the Act andArticle 300A of the Constitution of India are quoted below: Gsections 132(B) and 244A of the Act Application of seized or requisitioned assets, 132B.(1) The assets seized under section 132 orrequisitioned under section 132A may be dealt with in thefollowing manner, namely:- AX XX XX It would be pertinent to note here that the respondents have not CWP No. 23680 of 2019}3] controverted the factual position that there was no demand pending againstthe petitioner for the said period. There is no plausible reason put forthjustifying non-refund of amount even after finalisation of the assessmentand the fact that the order of the Tribunal setting aside the revisional orderwas accepted by the revenue. The provisions of Sections 132B(4) and 244A of the Act andArticle 300A of the Constitution of India are quoted below: Gsections 132(B) and 244A of the Act Application of seized or requisitioned assets, 132B.(1) The assets seized under section 132 orrequisitioned under section 132A may be dealt with in thefollowing manner, namely:- AX XX XX (4)(a) The Central Government shall pay simple interest atthe rate of one-half per cent for every month or part of amonth on the amount by which the aggregate amount ofmoney seized under section 132 or requisitioned undersection 132A, as reduced by the amount of money, if any,released under the first proviso to clause (1) of sub-section(1), and of the proceeds, if any, of the assets sold towardsthe discharge of the existing liability referred to in clause (1)of sub-section (1), exceeds the aggregate of the amountrequired to meet the liabilities referred to in clause (1) ofsub-section (1) of this section. (b) Such interest shall run from the date immediatelyfollowing the expiry of the period of one hundred and CWP No. 23680 of 2019|4] twenty days from the date on which the last of theauthorisations for search under section 132 or requisitionunder section 132A was executed to the date of completionof the assessment under Section 153A or under ChapterXIV-B. Interest on refunds where no claim is needed. J44 A,(1) Where refund of any amount becomes due to theassessee under this Act, he shall, subject to the provisions ofthis section, be entitled to receive, in addition to the saidamount, simple interest thereon calculated in the followingmanner, namely:- (a) where the refund is out of any tax collected at sourceunder section 206C or paid by way of advance tax ortreated as paid under section 199, during thefinancial year immediately preceding the assessmentyear, such interest shall be calculated at the rate ofone-half per cent for every month or part of a monthcomprised in the period,--under section 206C or paid by way of advance tax ortreated as paid under section 199, during thefinancial year immediately preceding the assessmentyear, such interest shall be calculated at the rate ofone-half per cent for every month or part of a monthcomprised in the period,-- (i) from the 1[(*]day of April of the assessment year to thedate on which the refund is granted, if the return ofincome has been furnished on or before the due datespecified under sub-section (1) of Section 139; ordate on which the refund is granted, if the return ofincome has been furnished on or before the due datespecified under sub-section (1) of Section 139; or (11) from the date of furnishing of return of income to thedate on which the refund is granted, in a case notcovered under sub-clause (1);date on which the refund is granted, in a case notcovered under sub-clause (1); (aa) where the refund is out of any tax paid under section CWP No. 23680 of 2019}>] 140A, such interest shall be calculated at the rate ofone-half per cent for every month or part of a monthcomprised in the period, from the date of furnishingof return of income or payment of tax, whichever islater, to the date on which the refund is granted: Providedthat no interest under clause (a) or clause (aa)Shall be payable, if the amount of refund is less thanten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment;Shall be payable, if the amount of refund is less thanten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment; (aa) where the refund is out of any tax paid under section CWP No. 23680 of 2019}>] 140A, such interest shall be calculated at the rate ofone-half per cent for every month or part of a monthcomprised in the period, from the date of furnishingof return of income or payment of tax, whichever islater, to the date on which the refund is granted: Providedthat no interest under clause (a) or clause (aa)Shall be payable, if the amount of refund is less thanten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment;Shall be payable, if the amount of refund is less thanten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment; (b) in any other case, such interest shall be calculated atthe rate of one-half per cent for every month or partof a month comprised in the period or periods tromthe date or, as the case may be, dates of payment ofthe tax or penalty to the date on which the refund isgranted.the rate of one-half per cent for every month or partof a month comprised in the period or periods tromthe date or, as the case may be, dates of payment ofthe tax or penalty to the date on which the refund isgranted. Article 300BA ot the Constitution 300-A. Persons not to be deprived of property save by authority of law,-No person shall be deprived of hisproperty save by authority of law. | It may be noted at this stage that clause (a) of Section 244A ofthe Act was amended w.e.f. 1.6.2016 and it is the amended provision whichis reproduced above, however, the same would not affect the decision in thepresent case as for the reasons mentioned below would be covered underclause (b) of Section 244A of the Act and same was not amended. The stand of the revenue that the amount was requisitionedunder Section 132A of the Act and hence interest only as per provision CWP No. 23680 of 2019160] under Section 132B(4) of the Act can be granted is not acceptable. Depriving of individual of its property without authority of lawviolates Article 300-A of the Constitution of India. In the absence of anylegal backing for not refunding the seized amount to the petitioner entitleshim to interest even under general law. Be that as it may, the provision ofinterest on delayed refund is there in Section 244A of the Act, There is no quibble with the proposition that Section 132B(4)of the Act deals with interest to be paid after 120 days of the date of lastauthorisation till the date of completion of assessment under Section 153Aor Chapter XIV-B of the Act. The said provision cannot be read in isolationespecially in the tacts of the present case where inspite of completion ofassessment on 21.1.2014, the amount was not refunded till 4.7.2017. The area of operation of Section 132B(4) of the Act ends withthe completion of assessment. If there is delay thereafter in refunding theamount, Section 244A of the Act takes such a case within its ambit, it dealswith payment of simple interest where refund becomes due to the assesseeunder the Act. Clause (b) of Section 244A of the Act talks of all other casesthan mentioned in clause (a) and (aa) for giving interest from the date ofpayment to the date on which the refund is granted. The refund of amountbecame due to the petitioner under the Act after finalisation of theassessment i.e. 21.1.2014 and the same was refunded on 4.7.2017, in suchcircumstances, the case is covered under clause (b) of Section 244A of theAct. sections 132B and 244A of the Act are independent provisions|and are not over-lapping. Rather, Section 132B(4) of the Act deals withinterest for the period from seizing of the amount till finalisation of the CWP No. 23680 of 2019|/] assessment and Section 244A of the Act operates for the period after therefund has become due under the Act. sections 132B and 244A of the Act are independent provisions|and are not over-lapping. Rather, Section 132B(4) of the Act deals withinterest for the period from seizing of the amount till finalisation of the CWP No. 23680 of 2019|/] assessment and Section 244A of the Act operates for the period after therefund has become due under the Act. Madhya Pradesh High Court inManohar Lal:Scase (supra)took a view that Section 132B of the Act is a self contained code, the assetsseized have to be dealt with under Section 132(6) of the Act and payment ofinterest is to be made under Section 132B(4) of the Act and Section 244 ofthe Act had no application. With utmost respect, we are not in agreementwith the view taken by Madhya Pradesh High Court for the reasonsmentioned above. The writ petition is allowed. The petitioner shall be entitled tointerest under Section 244A of the Act for the period from 22.1.2014 till thedate of payment. (AVNEESH JHINGAN)(AJAY TEWARI)JUDGE JUDGE 21.1 2020=8Whether speaking/reasoned:Yes/NoWhether reportable:Yes/No