TaxTMI 
TaxTMI 
2026 (7) TMI 51
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....r. S.C. ORDER 1. Heard learned counsel for the parties. 2. The rule is made returnable forthwith at the request of and with the consent of the learned counsel for the parties. 3. The petitioner, by instituting this petition, had sought for the release of the seized cash amount of Rs. 9,00,000/- along with statutory rate of interest in terms of Section 132 of the Income Tax Act, 1961. 4. During the pendency of this petition, the seized cash amount of Rs. 9,00,000/- was released to the petitioner. However, no interest was paid to the petitioner on this amount. Hence, Mr Sumeet Gadodia, the learned counsel for the petitioner, made it clear that this petition is now restricted to the payment of interest @ 18% per annum on the sei....
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.... under Section 132 of the I.T. Act. During these search and seizure operations Rs. 9,00,000/- in cash was seized from the petitioner and deposited into the personal deposit account of the 2nd respondent. 9. Admittedly, within 120 days from the date on which the last of the authorisations for search under Section 132 or requisition under Section 132A was executed, no assessment proceedings were taken. Therefore, upon the expiry of the statutorily prescribed period, the petitioner represented to the respondents for a refund of the seized amount of Rs. 9,00,000/- together with interest at the statutorily prescribed rate. Since the amount with interest was not refunded, the petitioner instituted the present petition. 10. As noted earlier,....
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....f Section 132B(4)(b), such interest should run from the date immediately following the expiry of the period of 120 days from the date on which the last of the authorisations for search under Section 132 or requisition under Section 132A was executed to the date of completion of the assessment, reassessment or recomputation. 13. However, in this case, no assessment was undertaken. Therefore, Mr. Gadodia argued that compensatory interest must be awarded to the petitioner. He relied upon the decisions of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax I, Pune and others, (2006) 2 SCC 508 and of the Allahabad High Court in the case of Umang Agrawal Vs. Commissioner of Income Tax (Central Circle) and ....
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....erest thereon to the assessee. The payment of interest to the assessee cannot be further delayed on account of such a reference. 17. Further, we clarify that this order shall not affect or influence the reference proceedings referred to by Mr Kumar Vaibhav. They can always proceed in accordance with the law. However, for the reasons discussed above, the pendency of such a reference will not be a sufficient reason to further delay payment of interest to the petitioner. 18. Accordingly, we allow this petition and direct the respondents to pay the petitioner interest at the rate of one-half per cent per month or 6% per annum on the amount of Rs. 9,00,000/- commencing from the expiry of 120 days from 01.05.2019 till the date of refund of ....