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Issues: Petitioner seeking interest for wrongful retention and delayed payment of funds by respondent authorities under the Income-tax Act, 1961.
Analysis: The petitioner filed a petition seeking interest of Rs. 1,734 for wrongful retention and delayed payment of Rs. 7,750 by the respondent authorities. The petitioner's residential premises were searched by the authorities under section 132 of the Income-tax Act, 1961, resulting in the seizure of cash. Subsequently, the Income-tax Officer released a portion of the seized amount but retained Rs. 7,750 due to alleged tax liability. The petitioner contended that the tax liability was of a different firm, which was paid, and therefore, the amount should be released. Despite various communications and requests, the interest was not paid to the petitioner, leading to the filing of the petition. The petitioner argued that he was entitled to interest under section 132B(4) of the Income-tax Act, which mandates the payment of interest by the Central Government on retained assets. Additionally, the petitioner claimed interest under section 243 for delayed refunds. The court acknowledged the petitioner's entitlement to interest and found no justification for the authorities' failure to award interest. The respondent authorities were directed to pay interest to the petitioner for the retention of Rs. 7,750 and delayed refund, as per the law. Furthermore, the court ordered the payment of interest at a rate of 15 per cent from the date of filing the petition until the actual payment date. Costs amounting to Rs. 1,500 were also imposed on the Department, and the rule was made absolute in favor of the petitioner.
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