TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 687
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....3th March, 1995. An appeal under Section 132 (11) of the Act, 1961 was filed by the petitioner before the Commissioner of Income Tax on 3rd April, 1995, which remained pending. The Assessing Officer made an order dated 28th September, 1995 adjusting the cash of Rs. 67, 038/- against the existing demands against the petitioner. He further adjusted Rs. 1,92, 862/- against the existing demands against late Pushpa Devi (mother of the petitioner). This exhausted the entire cash of Rs. 2,59,900/- seized from the Bank account of the son of the petitioner. In response to the notice under Section 148 of the Act return of income for the assessment year 1992-1993 showing an income of Rs. 3,466/- was filed. Assessment order was made under Section 143/148 of the Act, 1961 for the assessment year 199201993, income was determined at Rs. 84,959/- under the head of other source and Rs. 16,50,000/- under the head of long term capital gains. No credit was given to the petitioner-assessee by the Assessing Officer for the money retained under Section 132 (5) of the Act, 1961. Not being satisfied with the assessment order, assessee filed an appeal before the Commissioner of Income Tax (Appeals), whi....
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....rity date had expired and the value has been transferred to unclaimed account. However, there is no issue in that regard before this Court as the counsel for the department has assured the assessee-petitioner to do the needful so that certificates are encashed. The dispute between the parties before us is confined to the payment of interest on the money seized on 22nd November, 1994 till the date the tax liability of capital gains of Rs. 3,71,653 for the assessment year 1992-1993 was adjusted and on the remaining assets till the date they were released. In the alternative, the assessee has prayed for a direction for renewal of seized investments in shape of Indira Vikash Patras and Kishan Vikash Patras and deposits with the banks with interest on the prevailing rates on the maturity value till the assets were appropriated/released. It is the case of the petitioner that during all these period, the money would have augmented by nearly four times of its value in the year 1994. Learned counsel for the petitioner submitted that as per the order of retention under Section 132 (5) of Act, 1961, the seized assets comprise of cash, Indira Vikash Patras, Kishan Vikash Patras etc. of Rs. 3....
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....essment period also under Section 132B (4) (b) of Act, 1961. It has also been explained that interest on post assessment period is to be dealt with in accordance with Section 240 or Section 244A of Act, 1961. Reference has also been made to the judgment of the Apex Court in the case of Sandvik Asia Ltd. vs. Commissioner of Income Tax, Pune & Others reported in (2006) 2 SCC 508, wherein it has been held that if a person can be taxed in accordance with law and hence where excess amount is collected or any amounts are withheld wrongfully, the revenue must compensate the assessee. (Reference paragraph-30 of the judgment). In paragraph nos. 31 and 41 of the said judgment, it has been explained that any amount becoming due to the assessee under Section 240 of the Act, 1961 would encompass interest also. Sri Dhanajay Awashthi, learned counsel for the respondent-department disputes the correctness of the stand so taken on behalf of the assessee. It is submitted that no interest is payable to the assessee-petitioner in respect of the assets not sold or converted into money and that the cash which was seized from the petitioner assessee, has already been utilized, hence there is no cash, ....
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.... Indira Vikash Patras etc. for the inaction on the part of the department especially when the money lay with the Union of India itself. We are of the considered opinion that the facts of this case are more or less identical to those in the case of Chironjilal Sharma Huf and Sandvik Asia Ltd. (supras). We may also refer to the recent judgment of the Apex Court in the case of Commissioner of Income-Tax vs. Gujarat Fluoro Chemical reported in (2013) 358 ITR 291 (SC), wherein while noticing the law laid down in the case of Sandvik Asia Ltd. (Supra), it has been noticed that in the case of Sandvik Asia Ltd. the Apex Court had come to the conclusion that where there had been inordinate delay on the part of the Revenue in returning the money, which will include statutory interest, Revenue must compensate and the same is not payment of interest on interest. (Reference paragraph 7 of the judgment). In the case of South Eastern Coalfields Ltd. vs. State of M.P. & Others reported in (2003) 8 SCC 648, in paragraph 29 the Apex Court has laid down as follows: "29. Once the doctrine of restitution is attracted, the interest is often a normal relief given in restitution. Such interest is not c....