2004 (11) TMI 100 - HC - Income Tax

Money retained u/s 132 interest on that money petitioner is praying that the respondents be directed to pay interest of Rs. 6, 49, 250 from October 25 1985 to April 9 1990 which is the date of refund of the amount at the rate of 15 per cent per annum and further interest on the above amount of Rs. 6, 49, 210 at the rate of 15 per cent. from April 9 1990 till the date of payment - In view of the provisions contained in section 132(5) and (11) and as also in view of section 132B it is clear that though there was a right in favour of the petitioner he had not approached the court within a reasonable period. The right to return of the article accrued on October 25 1985 or latest on October 4 1986 and he ought to have approached the court within a reasonable period from that date. It is clear that when he has approached this court in 1992 7 years later it cannot be said that it is within a reasonable period. Therefore on the ground of delay and laches we are not inclined to entertain this petition.

Summary

Issues involved:
1. Claim for interest on seized amount under Income-tax Act.
2. Application of section 132B of the Income-tax Act.
3. Delay in approaching the court for relief.

Analysis:
1. The petitioner sought a direction for the payment of interest on a seized amount under the Income-tax Act, from October 25, 1985, to April 9, 1990. The petitioner was found with a sum of Rs. 9,80,000 seized by income-tax authorities in 1984. Subsequently, an assessment order was made on October 25, 1985, treating the entire seized amount as concealed income. The petitioner contended that interest should be paid on this amount based on section 132B of the Act, at a rate of 15% per annum. However, the court noted that despite the assessment order and subsequent favorable decisions by the Commissioner of Income-tax (Appeals), the petitioner did not approach the court promptly for relief, leading to a delay of several years before filing the writ petition in 1992.

2. Section 132B of the Income-tax Act was crucial in this case. The provision outlines the application of retained assets seized under section 132 of the Act. It specifies the manner in which liabilities can be recovered from the seized assets, including the payment of interest by the Central Government. The court highlighted that the Assessing Officer had a duty to return the seized amount to the petitioner promptly, as per section 132B(3). However, the petitioner failed to make any application under this provision for the return of the amount, which led to a challenge regarding the omission of the Assessing Officer to return the amount in a timely manner.

3. The court emphasized the importance of timely action by the petitioner in seeking relief. Despite favorable decisions in appeal and the eventual return of the seized amount in 1990, the petitioner delayed approaching the court until 1992. The court held that the petitioner had not acted within a reasonable period from the date the right to claim the seized amount accrued, thereby dismissing the writ petition on grounds of delay and laches. The judgment underscored the significance of timely legal action to assert one's rights under the Income-tax Act, highlighting the principle of approaching the court promptly for relief.