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TMI Blog2015 (6) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... s respectively. Thus the case of the assessee falls within the category of cases where there has been inordinate delay on the part of the department to pay the statutory interest, therefore, the assessee is entitled to be compensated for such wrongful retention of the money by the department. The assessee is entitled to be compensated at the same rates i.e. 9% as was provided for by the Apex Court in the case of Sandvik Asia Ltd (2006 (1) TMI 55 - SUPREME Court). - Decided in favour of assesse. - Writ Tax No. - 1202 of 2007 - - - Dated:- 6-5-2015 - Hon'ble Arun Tandon And Hon'ble Surya Prakash Kesarwani,JJ. For the Petitioner : Rakesh Ranjan Agrawal,Suyash Agarwal For the Respondent : S.C.,B.J. Agarwal,G. Krishna ORDER Heard Sri R.R. Agarwal, learned advocate assisted by Sri Suyash Agarwal, learned counsel for the petitioner and Sri Govind Krishna, learned counsel for the respondent. The facts giving rise to the present writ petition lie in a very narrow canvass. The same are stated as under. Search warrant dated 2.9.2002 was executed, at the residence and at the bank of the assessee on 4.9.2002. A total sum of ₹ 77 lacs were seized after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. ₹ 8,36, 500/- due to the petitioner has been paid vide cheque no. 295251 dated 1.5.2015. It has been then stated that no further interest is payable to the assessee petitioner. Counsel for the assessee challenging the stand of the department submitted before the Court that the Apex Court in the Case of Chironji Lal Sharma HUF Vs. Union of India and others (2014) volume 360 ITR 237 (SC) has explained that Section 132B (4) (b) deals with pre-assessment period in the matter of search and seizure and Section 244A deals with post assessment period. In the facts of the case it is submitted that on the sum of ₹ 37 lacs at least (out of the total seized amount of ₹ 77 lacs,) which being the aggregate exceeding the liability under Section 132 (b) (1) (i) of the Act the department is liable to pay interest at the rate prescribed on the said amount till the date of block assessment. He then submits that so far as the period subsequent to the assessment order as the merged in the order of the appellate authority where under the liability had been reduced to three lacs and adds in all, the assessee is entitled to interest at the rates which were applicable from time t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total amount of cash seized by the department under authorisation dated 2.9.2002, on 4.9.2002 was to the tune of ₹ 77 lacs. It is also not in dispute that after the assessment of the liabilities as were existing or were liable to be created under the block assessment, resulted in a surplus of 37 lacs in favour of the assessee subsequent to the passing of the judgment by the CIT (Appeals) Allahabad dated 18.8.2006. On this a sum of ₹ 37 lacs, the assessee would be entitled to interest under Section 132B (4) in view of the law laid down by the Apex Court in the case of Chironji Lal Sharma (supra). The relevant portion whereof reads as follows: But, in our view, section 132B(4)(b) deals with pre-assessment period and there is no conflict between this provision and section 240 or for that matter section 244 (A). The former deals with pre-assessment period in the matters of search and seizure and the latter deals with post-assessment period as per the order in appeal. We are of the considered opinion that these 37 lacs of rupees retained under Section 132 of the Act exceed the amount required to meet the liability under Section 132B (1) (i) of the Act and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court had held the assessee as entitle for interest on the failure of the department to pay the interest under the Income Tax Act within time permitted. But the Apex Court in the case of Commissioner of Income Tax Vs. Gujarat Flouro Chemicals (2012) 348 ITR 319 (SC) in paragraph Nos. 5,6, 7 and 8 has held as follows: 5. Since there was an inordinate delay on the part of the Revenue in refunding the amount due to the assessee this court had thought it fit that the assessee should be properly and adequately compensated and, therefore, in paragraph 51 of the judgment, the court while compensating the assessee had directed the Revenue to pay a compensation by way of interest for two periods, namely; for the assessment years 1977-78, 1978-79, 1981-82, 1982-83 in a sum of ₹ 40,84,906 and interest at 9 per cent. from March 31, 1986 to March 27, 1998, and in default, to pay the penal interest at 15 per cent. per annum for the aforesaid period. 6. In our considered view, the aforesaid judgment has been misquoted and misinterpreted by the assessees and also by the Revenue. They are of the view that in Sandvik case ((supra)) this court had directed the Revenue to pay interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for long duration, namely, 9 and 8 years. Such payment of compensation has been recognized and accepted in the case of Sandvik Asia Ltd (supra), as also in the subsequent judgment of the Apex Court in the case of Gujarat Flouro Chemicals (II) (supra). The relevant paragraphs of the said judgment have already been quoted above. We are of the opinion that the department was legally not justified in retention of the amount of interest which was payable to the assessee both under Section 134B (4) as well as under Section 243A for the period of nearly 9 and 8 years respectively. In our opinion the case of the assessee falls within the category of cases where there has been inordinate delay on the part of the department to pay the statutory interest, therefore, the assessee is entitled to be compensated for such wrongful retention of the money by the department. In the facts of the case we hold that the assessee is entitled to be compensated at the same rates i.e. 9% as was provided for by the Apex Court in the case of Sandvik Asia Ltd (supra). We provide that compensation shall also be determined as directed hereinabove and payment thereof shall be made within the same perio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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