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TMI Blog2013 (4) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner no.1 and son of the petitioner no.2 are partners, are running a wholesale jewellery business in one room on the first floor of the said property. One Jeevan Kumar Agrawal with which none of the petitioners have any concern is also residing on the ground floor and has a shop on the ground floor of the said building. The Income Tax Department issued a search warrant in the name of Sri Jeewan Kumar Agrawal and Banarasi Misthan Bhandar (P) Limited including the names of the petitioner nos. 1 and 2 namely Vijay Prakash Agrawal and Satya Prakash Agrawal. In pursuance thereof, a search and seizure operation was carried on by the respondents on 17th October, 2006. There was no warrant of authorization either in the name of the petitioner no.3 or 4. However, the search party searched the residential accommodations of all the four petitioners and seized cash belonging to them from their respective rooms. The particulars thereof are as follows:- A. Viajy Prakash Agrawal Rs.17,10,000/- B. Satya Prakash Agrawal Rs. 50000/- C. Jai Prakash Agrawal Rs. 2,50000/- D. M/s. Agrawal Chemical Company and Jewellers Rs. 4,90000/- Total Rs.25 Lakhs. The proceedings for block ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the respondents that any kind of dues is outstanding against any petitioner. The only defence is that Sri Jeewan Kumar Agrawal and Banarasi Misthan Bhandar (P) Limited are in the arrears of tax. The question which falls for consideration is whether this is a valid defence to negate the claim of the petitioner for return of the cash amount seized from the possession of the petitioner. Section 132 B of the Act deals with the application of seized or requisitioned assets. Its sub-section (1) provides the manner of their disposal. A reading of section 132 B would show that the seized assets shall be applied for payment of liability of the assesee under the Income Tax Act, Wealth Tax Act, the Expenditure Tax Act, Gift Tax Act and Interest Tax Act. It can be applied towards the existing liability of the assessee as well as towards the liability determined on the completion of the assessment under section 153 A and assessment year relevant to the previous year in which the search is initiated or requisition is made. After discharging the liabilities, the manner of disposal of surplus money seized in the search operation has been provided for under sub-sections (3) and (4) of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 540 106250 503550 60542 9 Date of Order CIT(A) 18.05.2011 30.03.2011 18.05.2011 04.03.2011 10 Revised order by A.O. 88780 36680 169130 15020 11 Date of order (revised by AO) 30.08.2011 30.08.2011 30.08.2011 30.08.2011 12 Refund of disputed tax 45661 4481 201011 26693 13 Date of Refund 30.08.2011 30.08.2011 30.08.2011 30.08.2011 The only point urged by Sri R.K. Upadhyay, learned counsel for the department is that the petitioners are not entitled either to get the refund of Rs.25 Lakhs or any interest thereupon in view of the fact that Jeewan Kumar Agrawal and Banarasi Misthan Bhandar (P) Limited are in arrears of tax. It was stated that a joint warrant of authorisation was drawn against the petitioner nos. 1 and 2 and Jeewan Kumar Agrawal and M/s. Banarasi Misthan Bhandar(P) Limited as also a joint Panchnama. Therefore, the petitioner nos. 1 and 2 are related and connected with Jeewan Kumar Agrawal and Banarasi Misthan Bhandar (P) Limited. The said argument is wholly misconceived and untenable. It is necessary to have a look to the pleadings of the parties in this regard first. The petitioners have come out with the specific case that none of them h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of an association of persons or body of individuals consisting of such persons. (2) Notwithstanding that an authorisation under section 132 has been issued or requisition under section 132A has been made mentioning therein the name of more than one person, the assessment or reassessment shall be made separately in the name of each of the persons mentioned in such authorisation or requisition." The aforesaid section has been inserted by the Finance Act, 2012 but has been given a retrospective effect w.e.f. 1st of April, 1976. The object and purpose of introduction of the aforesaid section to validate the joint authorisation as it was held by this Court with a joint authorisation for search is invalid. To overcome the said difficulty, section 292 CC was introduced with retrospective effect. It in no uncertain terms provides that the mention of names of more than one person on such authorisation under section 132 shall not be deemed to construe that it was issued in the name of association or persons or body of individuals consisting of such persons. The aforesaid section has put the things beyond pale of doubt that the mention of names more than one in the warrant of authorisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order, Section 244 of the Act deals with the liability of the Central Government to pay interest for the subsequent stage which comes into existence after the completion of the assessment/reassessment order. At this stage, the learned Standing Counsel has placed reliance upon Section 240 of the Act and submitted that in view of words "except as otherwise provided in this Act" disentitles the petitioner to claim interest under Chapter XIX which deals with 'refunds'. Elaborating the argument it was submitted that the provisions relating to search and seizure as contained in Chapter XIII-C contains special provision dealing with the matter relating to search and seizure. The legislators have made necessary provisions for grant of interest on the amount of refund, where ever they have thought fit. Chapter XIX relating to 'refund' contains provisions of refund relating to refund and as such the special provision shall exclude the general provision. The said argument is misconceived. Chapter XIII does not contain the provisions relating to assessment and refund of the excess amount found as consequence of the assessment order. The heading and sub heading of Chapter XIII suggest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the month in which the total income is determined under the Act. The assessment order was framed on 31st January, 1977, the liability of interest would start running after three months i.e. from April, 1978 till the date of payment. We, therefore, hold that the petitioner is entitled and the respondents are liable to pay interest under Section 244 of the Act on a sum of Rs. 31,060/- for the period commencing from 1.4.1978 to the date of actual payment of excess/refund amount." Having regard what has been said above, it may be noted that in pursuance of the order passed by the Commissioner of Income Tax (Appeals), revised assessment order was passed by the Assessing Authority on 30th of August, 2011 in all the cases of the petitioners. Excluding a period of three months, the department is liable to pay interest w.e.f. 1st of January, 2009 to the date of actual payment at the rate of 18 per cent per annum on a sum of Rs.25 Lakhs in all to the petitioners till the date of actual payment as per seizure order. The learned counsel for the petitioners submitted that in view of the decision of the Apex Court in the case of Sandvik Asia Ltd. Versus Commissioner of Income Tax, (2006) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt true that collection of revenue is a serious matter for the State -and the bounden duty of the authorities functioning under the Act is to implement the provisions of the Act, there should be safety and assurance to an honest tax-payer. An honest tax-payer should not be subjected to unnecessary harassment and an action not warranted in law, which can be of very serious consequence to the tax-payer if is allowed to remain without correction, such harassment and browbeating of an honest tax-payer will otherwise drive even such honest tax-payers to become cynical and lead to a situation where tax-payers will get a feeling that paying taxes honestly is not a worthwhile exercise; that the tax authorities are a menace to the society rather than simply being representatives of the State for enforcing the tax provisions. [(See Raghavendra Sherrigar Versus Assistant Commissioner of Commercial Taxes, (2005) 1425 STC 153)] The Apex Court in the case of Sandvik Asia Ltd. (supra) by the following paragraph has recorded their displeasure for this kind of attitude of the department. For the sake of convenience, the said paragraph is reproduced below:- "49. The decision of the Delhi High C ..... 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