Rajendra Prasad Mittal v. Union Of India, Through Chief Commissioner Of Incometax Rajasthan, Jaipurtax Rajasthan, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D. B. Civil Writ Petition No. 3414/2011 Rajendra Prasad Mittal S/o Shri Kishori Lal Ji Mittal, aged app. 55years, C/o N.G. Jewellers, Sarrafa Bazar, Main Market, Nagar,Bharatpur, Rajasthan ----Petitioner Versus 1. Union of India, through Chief Commissioner of IncomeTax Rajasthan, JaipurTax Rajasthan, Jaipur 2. Commissioner of Income Tax (Central), Jaipur 3. Assistant Commissioner of Income Tax, Central Circle,AlwarAlwar ----Respondents For Petitioner : Mr. Anant Kasliwal Senior Advocate assisted by Mr. Raghav Krishnatri Advocateassisted by Mr. Raghav Krishnatri Advocate For Respondents: Mr. Anuroop Singhi Advocate with Mr. Aditya Khandelwal AdvocateMr. Aditya Khandelwal Advocate HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE ASHUTOSH KUMAROrder 10/09/2024 1.Heard. 2.After a long drawn litigation and availing departmentalremedy which culminated in passing of a common order dated18.12.2009 by the Income Tax Appellate Tribunal, Jaipur Bench ‘A’,Jaipur (hereinafter referred to as ‘the Tribunal’), the petitioner hadto file this writ petition in the year 2011 for another relief ofconsequential nature, i.e., claim of interest on the amount ofrefund. 3.At the outset, there is no dispute between the parties thatduring pendency of the petition so far as refund aspect is concerned, the same has already been returned to the petitioner-assessee. 4.The only issue which remains to be decided is with regard tothe right of the petitioner to interest. 5.The records speak that block assessment orders were passedin respect of the petitioner-assessee resulting in various additionsand deletions. The matter went up to the Tribunal. The revenue’sappeals against deletion were dismissed whereas appeals of thepetitioner-assessee against addition were allowed. 6.The order passed by the Tribunal resulted in claim of refund.It is also not in dispute that the petitioner-assessee has beengranted refund also after passing of the order by the Tribunal.What remains to be decided in this petition is the interest on theamount of refund which the petitioner-assessee claims. 7.Mr. Anant Kasliwal, learned Senior Advocate appearing onbehalf of the petitioner would submit that in case where refund isordered, provisions contained in Section 132B(4) of the IncomeTax Act, 1961 (hereinafter referred to as ‘the Act’) speak in favourof the petitioner-assessee and sub-section (4) of Section 132B ofthe Act provides for payment of simple interest in the manner andto the extent provided therein. Despite various representationsmade, the respondent-authorities did not pass any order on theaspect of interest on refund to which the petitioner is entitledunder the law. For this purpose alone, this petition has been filedby the petitioner. Prayer has been made that the respondents bedirected to examine the claim of interest in accordance with theprovisions contained in Section 132B(4) of the Act as was applicable in respect of claim of refund pertaining to differentassessment years which were subject matter of consideration inthe block assessment proceedings. 8.Learned Senior Advocate would further submit that as thecase of the petitioner is that the interest payable to him underSection 132B(4) of the Act was illegally retained and not released,the petitioner is also entitled to interest on interest as per theprovisions contained in Section 244A(1A) of the Act. 9.Learned counsel for the respondents would submit thatthough the return has not been filed in the present case,petitioner’s claim for interest under Section 132B and Section244A(1A) of the Act is required to be examined in accordance withlaw. 10.In the present case, no return has been filed by therespondents though this petition has remained pending since2011. 8.Learned Senior Advocate would further submit that as thecase of the petitioner is that the interest payable to him underSection 132B(4) of the Act was illegally retained and not released,the petitioner is also entitled to interest on interest as per theprovisions contained in Section 244A(1A) of the Act. 9.Learned counsel for the respondents would submit thatthough the return has not been filed in the present case,petitioner’s claim for interest under Section 132B and Section244A(1A) of the Act is required to be examined in accordance withlaw. 10.In the present case, no return has been filed by therespondents though this petition has remained pending since2011. We fail to understand what prevented the respondents-authorities in deciding petitioner’s claim for interest despiterepeated representations and for the said relief, the petitioner hadto again approach this Court even though the Tribunal passedvarious orders both in the appeals filed by the revenue as well asthe appeals filed by the petitioner-assessee. 11.Section 132B(4) of the Act as it stood on the day, order waspassed by the Tribunal, reads thus: “132B. (1) xxxxxxxx (2) xxxxxxx (3) xxxxxxx (4)(a) The Central Government shall pay simpleinterest at the rate of [one-half per cent for every month or part of a month] on the amount by which theaggregate amount of money seized under Section 132or requisitioned under Section 132A, as reduced by theamount of money, if any, released under the firstproviso to clause(i) of sub-section (1), and of theproceeds, if any, of the assets sold towards thedischarge of the existing liability referred to in clause(i)of sub-section (1), exceeds the aggregate of theamount required to meet the liabilities referred to inclause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immediatelyfollowing the expiry of the period of one hundred andtwenty days from the date on which the last of theauthorisations for search under Section 132 orrequisition under Section 132A was executed to thedate of completion of the assessment [or reassessmentof recomputation].” 12.The above provision clearly shows that the petitioner-assessee is entitled to interest in the manner and to the extentprovided therein. Therefore, the respondents were under anobligation to examine petitioner’s representations and makepayment of interest on the refund amount as is allowable underthe law. However, no orders were passed, either allowing orrejecting such a claim, much less, giving any reason therefor. 13.Learned Senior Advocate also submits that where there isdelay in payment of interest payable under the law, Section244A(1A) of the Act also eventually speaks to grant interest oninterest. Relevant provision is also quoted hereinbelow as under: “244A. (1) xxxxxxxxxxx 12.The above provision clearly shows that the petitioner-assessee is entitled to interest in the manner and to the extentprovided therein. Therefore, the respondents were under anobligation to examine petitioner’s representations and makepayment of interest on the refund amount as is allowable underthe law. However, no orders were passed, either allowing orrejecting such a claim, much less, giving any reason therefor. 13.Learned Senior Advocate also submits that where there isdelay in payment of interest payable under the law, Section244A(1A) of the Act also eventually speaks to grant interest oninterest. Relevant provision is also quoted hereinbelow as under: “244A. (1) xxxxxxxxxxx [(1A) In a case where a refund arises as a result ofgiving effect to an order under section 250 or section254 or section 260 or section 262 or section 263 orsection 264, wholly or partly, otherwise than by makinga fresh assessment or reassessment, the assessee shallbe entitled to receive, in addition to the interestpayable under sub-section (1), an additional interest onsuch amount of refund calculated at the rate of threeper cent per annum, for the period beginning from thedate following the date of expiry of the time allowedunder sub-section (5) of section 153 to the date onwhich the refund is granted:] giving effect to an order under section 250 or section254 or section 260 or section 262 or section 263 orsection 264, wholly or partly, otherwise than by makinga fresh assessment or reassessment, the assessee shallbe entitled to receive, in addition to the interestpayable under sub-section (1), an additional interest onsuch amount of refund calculated at the rate of threeper cent per annum, for the period beginning from thedate following the date of expiry of the time allowedunder sub-section (5) of section 153 to the date onwhich the refund is granted:] [Provided that where proceedings for assessmentor reassessment are pending in respect of an assessee,in computing the period for determining the additionalinterest payable to such assessee under this sub-section, the period beginning from the date on whichsuch refund is withheld by the Assessing Officer inaccordance with and subject to provisions of sub-section (2) of section 245 and ending [with the date upto which such refund is withheld], shall be excluded].” 14.Learned counsel for the respondents seriously disputes the above submission by submitting that Section 244A(1A) of the Actmay not allow interest on interest, but interest on the amount ofrefund. 15.We are of the view that the provisions, which have beenreferred to above, make out a case for consideration of claim forinterest on refund which the respondent-department should haveconsidered in the light of the provisions contained therein. Neitherthe representations made by the petitioner were decided, norreply was filed in this petition even after lapse of 13 years. Thus,we are inclined to direct the respondents to calculate the interestpayable on refund amount as is payable under the provisionsreferred to hereinabove by appropriate computation and whateveramount is found due and payable towards interest be paid to thepetitioner within an outer limit of three months from the date ofreceipt of copy of this order. 16.Writ petition is, accordingly, allowed. (ASHUTOSH KUMAR),J (MANINDRA MOHAN SHRIVASTAVA),CJ Manoj Narwani-Aarzoo /52