M/S Sunita Finlease Limited v. Commissioner Of Income Tax Ministry Of Finance Department Ofrevenue, Central Revenue Building, Civil Lines, Raipur (Cg) ]Revenue, Central Revenue Building, Civi

HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition (T) No.7345 of 2011 M/s Sunita Finlease Limited through its Director, Rakesh GuptaG.E. Road, Opposite Rajkumar College, Raipur (CG) ---- Petitioner Versus 1. Commissioner of Income Tax Ministry of Finance Department ofRevenue, Central Revenue Building, Civil Lines, Raipur (CG) ]Revenue, Central Revenue Building, Civil Lines, Raipur (CG) ] 2. Assistant Commissioner of Income Tax Circle (II) Ministry ofFinance Department of Revenue, Central Revenue Building, CivilLines, Raipur (CG) Finance Department of Revenue, Central Revenue Building, CivilLines, Raipur (CG) ---- Respondents For Petitioner:Mr.N.K.Vyas, Advocate For Respondents:Mr.Amit Choudhary, Advocate Hon'ble Shri Justice Sanjay K. Agrawal Order On Board 25/04/2018 1. The petitioner is Income Tax Assessee. In a search conducted inthe office of the petitioner company on 21.7.1999 by the Income TaxAuthority, an amount of ₹ 2,00,000/- was seized from the petitionerand was kept in Public Deposit Account by the said authority andthereafter issued notice under Section 158BC(c) of the Income TaxAct, 1961 (hereinafter referred to as “the Act of 1961”) and pursuantto which, the petitioner submitted block assessment in theprescribed form showing undisclosed income as Nil. The AssessingOfficer passed the order dated 31.7.2001 holding undisclosedincome of the petitioner as ₹ 18,47,000/-, which was challenged bythe petitioner before the Commissioner of Income Tax Appeal. Thesaid authority by its order dated 28.12.2001 deleted the addition ofthe office of the petitioner company on 21.7.1999 by the Income TaxAuthority, an amount of ₹ 2,00,000/- was seized from the petitionerand was kept in Public Deposit Account by the said authority andthereafter issued notice under Section 158BC(c) of the Income TaxAct, 1961 (hereinafter referred to as “the Act of 1961”) and pursuantto which, the petitioner submitted block assessment in theprescribed form showing undisclosed income as Nil. The AssessingOfficer passed the order dated 31.7.2001 holding undisclosedincome of the petitioner as ₹ 18,47,000/-, which was challenged bythe petitioner before the Commissioner of Income Tax Appeal. Thesaid authority by its order dated 28.12.2001 deleted the addition of ₹ 18,47,000/- as undisclosed income. The said order was assailedby the Department in appeal before the Income Tax AppellateTribunal, Nagpur Bench at Raipur. The Tribunal dismissed theappeal of the Department. Thereafter, the petitioner claimed refundof the amount seized and ultimately, on 15.9.2010, an amount of₹ 60,613/- was refunded to the petitioner. Thereafter, the petitionerclaimed interest on the said amount. By order dated 6.6.2011, anamount of ₹ 8000/- was paid to the petitioner under Section 132B(4) of the Act of 1961. This writ petition has been filed by thepetitioner stating inter-alia that the petitioner is entitled for interestat the rate of 15% per annum as amount of interest has beenreduced w.e.f. 1.6.2002, whereas the petitioner case relates to priorto amendment, therefore, he is entitled for interest at the rate of15% per annum on the said amount. 2. Return has been filed by the respondents opposing the said prayer. 3. Mr.N.K.Vyas, learned counsel appearing for the petitioner, wouldsubmit that though 8% interest has been awarded to the petitioner,but he is entitled for interest at the rate of 15% per annum asSection 132 B (4) of the Act of 1961 suffered amendment w.e.f.1.6.2002.submit that though 8% interest has been awarded to the petitioner,but he is entitled for interest at the rate of 15% per annum asSection 132 B (4) of the Act of 1961 suffered amendment w.e.f.1.6.2002. 4. On the other hand, Mr.Amit Choudhary, learned counsel for therespondents opposes the submissions. respondents opposes the submissions. 2. Return has been filed by the respondents opposing the said prayer. 3. Mr.N.K.Vyas, learned counsel appearing for the petitioner, wouldsubmit that though 8% interest has been awarded to the petitioner,but he is entitled for interest at the rate of 15% per annum asSection 132 B (4) of the Act of 1961 suffered amendment w.e.f.1.6.2002.submit that though 8% interest has been awarded to the petitioner,but he is entitled for interest at the rate of 15% per annum asSection 132 B (4) of the Act of 1961 suffered amendment w.e.f.1.6.2002. 4. On the other hand, Mr.Amit Choudhary, learned counsel for therespondents opposes the submissions. respondents opposes the submissions. 5. I have heard learned counsel appearing for the parties andconsidered their rival submissions made herein-above and alsogone through the records with utmost circumspection. considered their rival submissions made herein-above and alsogone through the records with utmost circumspection. 6. Section 132B (4) (a) and (b) of the Act of 1961 prior to amendment dated 1.6.2002 provides as under:- “132B: Application of retained assets........ (4)(a) The Central Government shall pay simpleinterest at the rate of fifteen per cent per annum onthe amount by which the aggregate of moneyretained u/s 132 and of the proceeds, if any, of theassets sold towards the discharge of the existingliability referred to in clause 3 of sub-section (5) ofthat section exceeds the aggregate of the amountsrequired to meet the liability referred to in clause (i)of Sub-section (1) of this section. (b) Such interest shall run from the dateimmediately following the expiry of the period of sixmonths from the date of the order under Sub-Section 5 of section 132 to the date of the regularAssessment or reassessment referred to in Clause(i) of Sub-section (1) or, as the case may be, to thedate of last of such assessments or re-assessments.” 7. The above-stated provision came up for consideration before theSupreme Court in the matter of Chironjilal Sharma HUF v. UnionSupreme Court in the matter of Chironjilal Sharma HUF v. Union of India (UOI) and others1 in which Their Lordships held asunder:- “6. A close look at the above provisions and, particularly,clause (b) of Section 132B(4) of the Act clearly showsthat where the aggregate of the amounts retained u/s132 of the Act exceeds the amounts required to meet theliability u/s 132B(1)(i), the department is liable to paysimple interest at the rate of fifteen percent on expiry ofsix months from the date of the order u/s 132(5) of theAct to the date of the regular assessment or re-Assessment or the last of such assessments orreassessments, as the case may be. It is true that in theregular Assessment done by the Assessing Officer, thetax liability for the relevant period was found to be higherand, accordingly, the seized cash under Section 132 ofthe Act was appropriated against the assessee's taxliability but the fact of the matter is that the order of theAssessing Officer was over-turned by the Tribunal finallyon 20.2.2004. As a matter of fact, the interest for thepost assessment period i.e. from 4.3.1994 until refundon the excess amount has already been paid by thedepartment to the assessee. The department denied the payment of interest to the assessee under Section132B(4)(b), according to Mr. Arijit Prasad, learnedcounsel for the revenue on the ground that the refund ofexcess amount is governed by Section 240 of the Actand Section 132B(4)(b) of the Act has no application.But, in our view, Section 132B(4)(b) deals with pre-assessment period and there is no conflict between thisprovision and Section 240 or for that matter 244(A). Theformer deals with pre-assessment period in the mattersof search and seizure and the later deals with postassessment period as per the order in appeal.” payment of interest to the assessee under Section132B(4)(b), according to Mr. Arijit Prasad, learnedcounsel for the revenue on the ground that the refund ofexcess amount is governed by Section 240 of the Actand Section 132B(4)(b) of the Act has no application.But, in our view, Section 132B(4)(b) deals with pre-assessment period and there is no conflict between thisprovision and Section 240 or for that matter 244(A). Theformer deals with pre-assessment period in the mattersof search and seizure and the later deals with postassessment period as per the order in appeal.” 8. In the instant case, search was made on 21.7.1999 and amount of₹2,00,000/- was seized and tax was assessed on 31.7.2001 adding₹18,47,000/- which was deleted by the Commissioner of IncomeTax Appeal on 28.12.2001 i.e. prior to amendment in Section 132B(1) of the Act of 1961 w.e.f. 1.6.2002, therefore, the petitioner will beentitled for interest on the said amount at the rate of 15% perannum.₹2,00,000/- was seized and tax was assessed on 31.7.2001 adding₹18,47,000/- which was deleted by the Commissioner of IncomeTax Appeal on 28.12.2001 i.e. prior to amendment in Section 132B(1) of the Act of 1961 w.e.f. 1.6.2002, therefore, the petitioner will beentitled for interest on the said amount at the rate of 15% perannum. 9. Accordingly, the respondents are directed to pay the difference ofinterest at the rate of 15% per annum till the date of payment ofinterest adjusting the amount already paid. However, the petitioneris not entitled for any compensation or interest as per provisionscontained in Section 244A of the Act of 1961.interest at the rate of 15% per annum till the date of payment ofinterest adjusting the amount already paid. However, the petitioneris not entitled for any compensation or interest as per provisionscontained in Section 244A of the Act of 1961. 10.The writ petition is allowed to the extent indicatedhereinabove. No cost(s). hereinabove. No cost(s). Sd/- (Sanjay K. Agrawal) JudgeJudge