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TMI Blog2013 (5) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... interest running under Section 132B(4)(a) - the question of determining the rate of interest under Section 132B(4) or the date from which the interest was to run, does not arise. Because all issues stood closed in February, 1999 as the petitioner made the payment of Rs. 3,29,670/- under the Kar Vivad Samadhan Scheme, 1998 the entire amount of Rs. 5,35,000/- became immediately returnable to the petitioner. However, that amount was returned a little later on 17.2.2000. Therefore, the said amount of Rs. 5,35,000/- was retained by the department to the detriment of the petitioner from February, 1999 to February, 2000 which is approximately one year. Therefore, petitioner is entitled to interest on the said amount. The rate of interest that should be applied would be 10% simple interest which was close to the rate of interest which was being provided by banks on fixed deposits. Thus amount of interest payable by the department will be Rs. 53,500/- to be paid within four weeks. The writ petition is partly allowed. - W.P.(C) No. 16143/2006 - - - Dated:- 11-4-2013 - Badar Durrez Ahmed and R.V. Easwar, JJ For the Appellant : Rajender Agarwal For the Respondent : Pradeep K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular assessment in respect of the assessment year 1986-87 was completed and the assessment order was framed on 30.3.1989 whereby a demand was raised of Rs. 5,92,980/- including interest. The cash amount which was available with the department was Rs. 5,35,000/-. It is obvious that the demand as per the assessment order exceeded the cash available with the department. 5. It is an admitted position that the petitioner wrote a letter on the very next day, that is, on 31.3.1989, seeking adjustment of the cash against the demand raised in terms of the assessment order dated 30.3.1989. In fact, the petitioner wrote several other letters over the years for adjusting the said demand, which was not done by the revenue. 6. The petitioner being aggrieved by the assessment order dated 30.3.1989 filed an appeal against the same sometime in April 1989. During the pendency of the appeal, the Kar Vivad Samadhan Scheme, 1998 was introduced by virtue of Finance (2) Act, 1998. Taking advantage of the said scheme, the petitioner paid an amount of Rs. 3,29,670/- in February, 1999 and obtained a certificate under the said scheme. In other words, by payment of the said sum of Rs. 3,29,670/- the enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 998. 9. We may straightaway state that we are in agreement with the learned counsel for the respondent that neither Section 240 nor Section 244A would apply in the facts and circumstances of the present case. Section 240 of the said Act would not apply because it deals with the provision of refund on an appeal. In the present case the petitioner has not received any refund consequent upon an appeal. On the contrary, the petitioner had opted for the Kar Vivad Samadhan Scheme, 1998 and had paid the amount under that scheme in February, 1999. The appeal was dismissed, as it had become infructuous, subsequently on 30.3.1989. 10. Insofar as the argument under Section 244A of the said Act is concerned, the provisions of sub-section (4) makes it clear that Section 244A applied only in respect of assessment for the assessment year commencing on 1.4.1989 and subsequent assessment years. The assessment year with which we are concerned is 1986-87. Therefore, Section 244A is clearly inapplicable in the case of the petitioner. 11. We are also in agreement with the second submission made by the learned counsel for the revenue that no amount of interest would be payable to the petitioner af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule. (2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act. (3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized. (4) (a) The Central Government shall pay simple interest at the rate of fifteen per cent per annum on the amount by which the aggregate of money retained under section 132 and of the proceeds, if any, of the asset sold towards the discharge of the existing liability referred to in clause (iii) of sub-section (5) of that section exceeds the aggregate of the amounts required to meet the liabilities referred to in clause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immiediately following the expiry of the period of six months from the date of the order under sub-section (5) of section 132 to the date of the regular assessment or reassessment referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates in force in the financial year in which the assets were seized and may also determine the interest or penalty, if any, payable or imposable accordingly: Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in clauses (ii), (iia) and (iii) or any part thereof, the income tax officer may, with the previous approval of the Chief Commissioner or Commissioner, release the assets or such part thereof as he may deem fit in the circumstances of the case." In the present case the Income Tax Officer passed an order under Section 132(5) on 20.11.1985. We have also mentioned that in terms of the said order the tax amount determined was Rs. 10,57,154/- and the penalty was also determined at Rs. 21,14,308/-. The total amount of tax and penalty came to Rs. 31,71,462/-. As against this the seized assets namely cash and jewellery totaled only Rs. 6,15,808/- and therefore the income tax officer retained the seized cash of Rs. 5,35,000/- in terms of the provisions of Section 132(5). 13. The question of payment of interest retained under Section 132 is covered by the provisions of sub-section (4) of Section 132B, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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