HC directed the revenue to grant interest @ 12% on delay in release of seized cash.
On 12th March 2013, Hon`ble HC directed the revenue to grant interest @ 12% on delay in release of seized cash
Assessee have file writ petition before hon`ble High court to grant the interest for inordinate delay in releasing the amount amounting to Rs. 6,33,800/- u/s 132B(3) of the Act seized during the course of search u/s 132(1) of the Act on 17.2.2005 as per the provisions of Sec. 132B(4)(a)(b) & 244A(1)(b) or under any other relevant provisions of the law along with interest on interest due till the date of payment.
Whether the petitioner is entitled to any interest on the seized cash of Rs. 6,63,800/- from the date on which the assessment was completed under section 153A of the Act i.e. 26.12.2006 till it was actually released to him on 24.05.2011, and if so, at what rate ?
Hon`ble high court observed that, the Tribunal held that the cash found from the possession of the assessee actually belonged to M/s. S. K. Industries Pvt. Ltd. The AO gave effect to the order of the Tribunal and revised the assessment which resulted in a nil tax demand. After the aforesaid order passed by the AO, the petitioner made further requests to the CIT seeking release of the cash seized since there was no demand outstanding against him. While these letters were pending, the appeal preferred by the revenue against the order of the Tribunal was dismissed by this Court by order dated 23.05.2011 passed in ITA No.79/2011.
Further Hon`ble high court also observed that, in an identical situation, order passed by a Division Bench of this Court reported in (2012) 6 TaxCorp (DT) 52858 (DELHI) has directed the revenue to grant interest @ 12%. In that case certain amounts had been returned to the petitioner (in that case) and accordingly adjustments were directed to be made in respect of those payments while quantifying the amount on which the interest was directed to be paid. However, so far as the period for which the interest was payable to the petitioner in that case is concerned, there is no dispute that the direction of this Court was that it should be paid from the day next following the day on which the assessment was completed till the amount was actually released to the petitioner. Interest was directed to be paid @ 12% in respect of this period on varying amounts as quantified in paragraph 19 of the order.
The only argument of the revenue was that the judgment of the Supreme Court reported in (2006) 193 TAXATION 163 (SC) has been doubted in a later case before the Supreme Court in (2012) 6 TaxCorp (DT) 52927 (SC) and the matter has been directed to be placed before the Chief Justice of India on the administrative side for appropriate orders. A copy of the above order of the Supreme Court passed on 23.08.2012 was filed before us. However, the judgment of the Supreme Court in (2006) 193 TAXATION 163 (SC) holds the field as of now. It was this judgment which was applied by a Division Bench of this Court in the case of Ajay Gupta that was invoked by the Division Bench of this Court in the case of (2012) 6 TaxCorp (DT) 52858 (DELHI). We, therefore, do not see any reason to take a view different from the one taken by this Court in the case of (2012) 6 TaxCorp (DT) 52858 (DELHI).
In the result, we hold that the petitioner is entitled to be paid interest @ 12% in respect of the amount of Rs. 6,33,800/- for the period from 27.12.2006 to 24.05.2011 and a writ of mandamus directing the payment of the interest is accordingly issued. The respondent shall pay the interest within a period of six weeks from today.
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Rupesh Srivastava
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