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TMI Blog2015 (5) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... lidated/renewed been encashed by the department. In the facts and circumstances of the case on record we are satisfied that the order of the Assistant Commissioner of Income Tax insofar as it refuses to make payment of interest under Section 132B of the Act, 1961 on the ground that Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. had not been encashed, cannot be legally sustained and is hereby quashed. The Assistant Commissioner of Income Tax is directed to redetermine the interest as per the representation dated 28th September, 2010, in light of what has been recorded above and in light of the judgment of the Apex Court in the cases of Chironjilal Sharma Huf, Sandvik Asia Ltd. (2013 (12) TMI 71 - SUPREME COURT ) strictly in accordance with the provisions of the Income Tax Act. Let necessary calculation of interest be done within four weeks from the date a certified copy of this order is filed before him. All consequential action shall be taken immediately thereafter. So far as the refund of the interest paid under Section 220 of Act, 1961 is concerned, we find no reason to interfere with the order of the Commissioner of Income Tax dated 21st May, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department being not satisfied with the order of the appellate authority, filed an appeal before the Income-Tax Appellate Tribunal. The appeal was partly allowed by the Tribunal. Not being satisfied with the order of the Tribunal, assessee petitioner filed an appeal under Section 260A of the Act, 1961 before the High Court being Income Tax Appeal No. 92 of 2005, which remained pending. In pursuance to the order of the Tribunal, fresh order was passed by the Assessing Officer on 19th April, 2005. Petitioner filed an appeal before the Commissioner of Income Tax (Appeals) on 31st August, 2005, which was partly allowed by the Commissioner of Income Tax vide order dated 17th January, 2006. On 18th January, 2007, an intimation was given by the assessing officer about the seized money. Petitioner also made an application before the Commissioner of Income Tax, Meerut for release of the seized assets, with a further prayer that the assessee be compensated for pecuniary loss due to non renewal of the deposits and interest under Section 132B (4) of Act, 1961. Since the said application was not considered, petitioner filed Writ Petition No. 1306 of 2010. The High Court disposed of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 5,81,133/- treating them as undisclosed income and ₹ 67,038/- against existing liability. This order of retention was a summary order subject to regular assessment under Section 143 (3) of Act, 1961, which was made on 29th March, 1996. The retention of seized assets beyond the date of regular assessment is without authority of law. It is stated that in the regular assessment, for the year 1992-1993, no addition was made with reference to the seized assets, therefore, the liability as mentioned in the summary order dated 13th March, 1995 with reference to the seized assets ceased. Such assets were liable to be released under Section 132B (3) of Act, 1961. The Revenue has retained the assets for more than 19 years without authority of law, therefore, the assessee must be compensated for loss of interest. In the alternative, it is submitted that the Revenue could have appropriated the seized amount in April, 1996 against the demand notice dated 29th March, 1996, no interest under Section 220 (2) of Act, 1961 could have been levied. The Revenue is liable to pay statutory interest under Sections 132B (4) and 244A of the Act, 1961. He explained that the Revenue cannot indir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Account. It is further stated that interest has been charged strictly as per the order of the Commissioner of Income Tax, therefore, the relief for refund of the same, as prayed, appears to be misconceived. We have considered the submissions made by the learned counsel for the parties and have gone through the records of the present writ petition. From the records of the present writ petition it is apparent that seizure was affected in the year 1994. The assessment was completed in the year 1996, the cash seized was adjusted against tax demands. Fixed Deposit Receipts, Kishan Vikash Patras and Indira Viaksh Patras, which were seized, were not encashed nor were renewed. It is for this reason only that the Assistant Commissioner of Income Tax, Meerut vide order dated 8th February, 2011 while disposing of the application of the petitioner dated 28th September, 2010 has refused payment of interest on the aforesaid assets. It has been recorded that no interest is payable in relation to assets other than the money, which are not sold by the income-tax officer. According to the Assistant Commissioner of Income Tax, interest is payable only in respect of seized assets, which are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Interest Act of 1839 or 1978. It is not in dispute that because of non return of Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc., and because of non-extension of the period of their validity by the Revenue for all the said period these investments lay in the controll of the Revenue, although illegally, in our opinion, after assessment proceedings had been finalized. The same should have been returned to the assessee after assessment. This act of the department has resulted in uncalled for loss of interest on the aforesaid investment, in the shape of Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. The loss has been caused to the assessee for no fault of his. The Kishan Vikash Patras, Indira Vikash Patras, Fixed Deposit Receipts etc. would have earned interest in normal course of things, if they had been revalidated/encashed as per the option available to the Revenue. If the Revenue has failed to do so and the money all along continued to remain deposited with the Union of India and the available for utilization by the Revenue itself, we see absolutely no reason in the facts of the case as to why the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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